Why Sponsors Should Roll the Dice on Hockey in Vegas
5 Minute Read
- Las Vegas was recently awarded an NHL expansion franchise, the first Big 4 (NHL. NBA, MLB, NFL) sports team in the city
- Brands who become founding partners of expansion teams have the ability to position their organizations as builders and can earn credibility as an early-stage sponsor
- Despite it being an unproven market, there is strong evidence supporting Las Vegas as an NHL market
The NHL Board of Governors have accepted the expansion bid from Las Vegas and have granted the city a NHL team that will begin play in the 2017-2018 season. The decision came after a long process that came down to two front runners: Quebec City and Las Vegas. Quebec City was seen as a mature hockey market in comparison to the lesser known commodity of Las Vegas. Las Vegas has never hosted a Big 4 (NHL, NBA, MLB, NFL) sports team and with no history to draw on, people questioned their ability to support a team.
One of the first actions taken by a newly established franchise is the development of a corporate partnerships team that will begin engaging national and local brands. While there are risks associated with the unknown, expansion team sponsorship could also prove to be a valuable opportunity for sponsors. When there is a new sports franchise in a city, corporate sponsors that are present from the beginning can be viewed as founders or builders of the franchise.
Many in the media including USA Today, FiveThirtyEight, and the Las Vegas Sun have cited reasons as to why Vegas could not work as a hockey market. MKTG examines and refutes many of these claims to explore why Las Vegas could succeed as an NHL team and as a sponsorship property for investing brands:
Las Vegas is a city of tourists; there isn’t enough support from the local community
Counterpoint- While it is true that Las Vegas has a very high tourist population, (in 2015 42 million people visited Las Vegas versus 40 million who visited Toronto) they still have a very large and growing population base. The metro population of Las Vegas is 2.1 million, which is higher than other NHL cities such as San Jose, Nashville, and Buffalo. Las Vegas as a metro area is also growing at a faster rate than other American cities such as Tampa Bay. The city is home to a number of families; the 2010 census stated that 65.5% of the population live in family households compared to other major American cities like Boston (46%). With such a large population that has gone without a pro sports option for many years, brands can capitalize off the city’s appetite by being one of the early sponsors of the new team.
Las Vegas has plenty of entertainment options; a hockey team will get lost in the clutter
Counterpoint- Las Vegas is a city with a number of entertainment options. There are daily musical acts, magicians, casinos, nightclubs and more. These options all compete for people’s time and entertainment dollars. However, a hockey game can be positioned as an entertainment option that is a complement and not a replacement to these activities. NHL games generally start at 7pm local time and last an average of two and a half hours. Entertainment in Las Vegas goes late into the night and a hockey game would not be the sole activity for people for tourists. A hockey game can also appeal to the large local population. Tourists visiting the city could find a novelty in the allure of the Las Vegas Strip, however locals who have experienced the strip may look for a differentiated option.
Las Vegas’ party image presents risks for corporate sponsors
Counterpoint- In part due to tourism campaigns such as “What Happens here, stays here” and the prevalence of nightlife and casinos, Las Vegas has an adult-friendly brand. Corporate sponsors will want to ensure that the arena experience and overall team culture is not a reflection of these brand attributes. For example, Vegas’ standing as a gambling hotbed has become a common reason for leagues not putting a team in the city. While in-arena programming is likely to have more flare in order to take on the identity of city, Las Vegas will be eager to ensure the focus is on the ice. The economic impact that comes with a new franchise means that Las Vegas will be incentivized to maintain a professional atmosphere and avoid scandal for both home and visiting players.
The NHL does not succeed in “non-traditional” hockey markets
Counterpoint- The Arizona Coyotes are generally mentioned as an example of a franchise that have experienced issues in a “non-traditional” hockey market. The team has had ownership troubles, they play to a sparse crowd, and have been the subject of relocation talks. While Arizona provides an example of where an NHL franchise can have issues, there are other examples of hockey succeeding in cities that were once thought to be untraditional. During the 2015-2016 NHL season, the Dallas Stars and Nashville Predators both experienced 99.2% capacity for the season, out-ranking markets like out-ranking traditional markets in both Canada and the northern United States. Even after these teams demonstrate their value by having a high attendance, these are two teams that are thought to be “non-traditional” hockey markets. After successful years of building the franchise and engaging with the community both Nashville and Dallas have both become valuable properties for corporate sponsors. Las Vegas can look to these markets as examples of how to become successful in a community where there were also doubts on how they would succeed. Additionally, Las Vegas has played host to a significant NHL crown jewel event in the NHL Awards for seven years. This has helped the league introduce itself to the city and create an appetite for the game.
Ultimately, the best way for the Las Vegas franchise to demonstrate its value as a property is to be a competitive team on the ice. If the Las Vegas management is able to produce a winning team then that can be the greatest predictor of success and culture regardless of the geography of the team. It will take time for Las Vegas to build a winning team, but if they do, sponsors will win as well.