Why the Toronto Maple Leafs are justified in raising their ticket prices

Photo Credit: Tom Szczerbowski/USA TODAY SPORTS

In yet another case of “things that are only a story in Toronto”, a report from the Star today revealed that the Toronto Maple Leafs are going to increase their season ticket prices this year. The number is insignificant by percentage, but with the team sitting near the bottom of the standings, seeing any sort of increase to what is known to be the league’s most expensive ticket is a bit jarring.

With that said, here are a few reasons why it’s not something to worry about.

The Star report mentions that ticket prices are up, on average, by 2% per ticket. Now, that’s not overly massive to begin with; we’re talking $0.50 for nosebleeds or $8 for platinums. Surely that’s worse than zero, but nothing overly crazy. But there’s another thing that people forget.

The National Hockey League is a league that deals largely in American Dollars, and while ticket prices may have gone up by 2%, those tickets could very still amount to less US income than they did last year. The dollar has dropped by over 5 cents, or a 7% value tumble. Even with the rebound of the past few weeks, the Canadian dollar is still down more significantly than these tickets are up. That’s without adjusting to inflation, as well; last year’s Canadian rate was 1.13%.

By comparison, 2.0% is the same increase that the Ontario government set for home rental this year.

The NHL’s salary cap is sputtering. Coincidentally, a lot of that has to do with the aforementioned dollar dip; a lot of the NHL’s money comes from the financial strength of most of Canada’s seven teams and the behemoth that is their $5.4 billion TV contract with Rogers. If you want a higher salary cap, you have to increase hockey related revenue.

How do you do that? Tickets, merchandise,  watching those annoying 30-second ads before 12-second goal clips on NHL.com… it all adds up. This 2% increase should add about $2.5 million to HRR, which isn’t a ton, but every bit helps.

Part of the reason that the ticket prices saw a price freeze last year was the fact that this team was known, for a fact, to be a bad one. They didn’t need to freeze prices to ensure people would keep buying tickets, but if you expect your paid customers to keep buying into your plan, showing them that you plan to earn their respect back is a good decision from a PR perspective; especially when it costs you less than half a Nathan Horton.

But if we’re being real about things, the Leafs will absolutely not be this bad next year. We’re talking about a team of quickly-developing young players who are expected to be better next year. A team that had many of it’s best players miss significant time with injury. A team that is 11th (and rising) in Corsi-For percentage, but second last in even strength shooting percentage. A team that should have upwards of $20 million left to spend on upgrades after re-upping Nazem Kadri and Morgan Rielly. A team that’s going to probably pick no worse than 4th in this year’s draft.

They might not win the Stanley Cup next year. Heck, they could still miss the playoffs. But they’re going to win many more games with what should be the league’s youngest team. How is that not a more valuable experience?

If Leafs tickets cost too much, attendance would fall. Here’s the thing, though; that definitely isn’t the case. In every year that the Leafs have been in the Air Canada Centre, their average attendance has been over 100% capacity (standing room and luxury suites tipping them over the total). You often hear that tickets are too expensive for “the real fan”, but if the prices were to drop, the same balance of long-time holders, corporate interests, and scalpers looking to flip would just save money that they’re already spending. It wouldn’t add to the fan market – it would literally make the rich get richer.

Fans will often point to the “end of the sell-out streak” as proof that there’s a declining interest, but Toronto’s occasional no sell-out comes from the fact that they tend to release tickets that were promised to players families and sponsors and unclaimed by game day. It’s actually easier in Toronto to pick up a ticket two hours before the game than it is two months before. That’s not because the interest is dying, it’s because the Leafs found a way to make an extra few thousand dollars a night at the sacrifice of not having a “We’ve sold out this many games in a row” footnote on Page 116, Paragraph 4, Appendix E of your Media Guide.

It’s incredibly unlikely that a season ticket holder will decide to not renew their season tickets. Holders budget for increases, and more importantly, Personal Seat Licences are transferable and worth five to six figures. Owning these tickets is a business as much as it is a passion and as such, these people could care less about what amounts to an annual rounding error.

Because of that, renewal rates are consistently over 99%. That means fewer than 180 tickets are left un-renewed every year. Just to put that into perspective.

We don’t know where the first decimal lands on “greater than 99%”, but it’s likely that a higher percentage of Canadians die every year than the percentage of Leafs season ticket holders that walk away. Given the fact that the average holder is probably mid-to-late aged (there’s a minimum 20-year) waiting list, the odds of a season ticket holder dying are probably a fair chunk higher than them walking away due to a 2% increase.

Oh, and if you’re waiting to take the spots of those dead people, don’t; personal seat licences can and often do get passed on in wills and estates.