Saskatchewan taxpayers subsidize junior hockey league, thanks to profit guarantee

Followers of the Memorial Cup may have been surprised to learn — what’s that? You know, the Memorial Cup. The championship of the Canadian Hockey League. What do you mean, you’ve never heard of … okay, I’ll start again.

So in Canada, there’s a separate set of hockey leagues for players 16 to 20 years old, and the champion is decided by something called the Memorial Cup. Like the Super Bowl and the NCAA tournament, it rotates among various venues each year, and like those other events, the league places demands on cities in order to be considered as host. Including, apparently, guaranteed profits:

Taxpayers in Saskatchewan are paying nearly $700,000 to cover a profit guarantee, promised to support the Memorial Cup in Saskatoon in 2013.

The guarantee was needed to secure the tournament from the Canadian Hockey League which was assured the event would net the organization $3.5 million.

In the grand scheme of things, this isn’t too horrible: $700,000 is a pittance compared to what some locales spend on sporting events, and when Saskatchewan hosted the world junior championships in 2010, it made its profit target, so amortized over all the guarantees the province hands out, it’s not a ton of money. Still, it’s sobering to realize that even in relatively subsidy-averse Canada, even for freakin’ junior hockey, leagues are able to extract guarantees that the public will subsidize their profit if it falls short of what they were expecting. Monopoly power is a bitch.

3 comments on “Saskatchewan taxpayers subsidize junior hockey league, thanks to profit guarantee

  1. TV money will cover most of this, but this should be a CHL expense (or an expense to the club hosting – they automatically get a spot in the tourney against the WHL, OHL, and QMJHL champs).

  2. The really shocking thing here is that the Memorial cup didn’t make “enough” money in Saskatoon. The CUC looked full for most of the games… (though less full than during the World Juniors), so really, if you have to cough up $700k despite selling out for much of the tournament, haven’t you misread the market (and by “you” I mean both the CHL and organizers) significantly?

    I sense a certain amount of “cliff edge dwelling” in Jr hockey in Canada too. Already the WJHC organizers have told the smaller Canadian cities that they are unlikely to be considered in future because the event – so long kept alive by smaller Canadian and near-border US cities – can not now generate enough revenue from Prairie cities and needs to be held in more major centres.

    Talk about abandoning your base…

  3. Transport would probably be the big issue with Saskatoon…getting a flight there last minute after discovering your team (Halifax, Portland, or London) is going would be expensive from either of those cities. Ticats fans looking at going to Regina for the Grey Cup had the same problem (though it went fine with the Riders in it, of course).

    The WJHC bubble is bursting pretty quickly. You can still get tickets for Toronto and Montreal, which would have been sold out within an hour 5 years ago. I’d say it’s on the level of all those bowl games ESPN shows to take up holiday viewing time.