Will the NHL work in Las Vegas? We asked an expert

Vegas

The NHL’s expansion to Las Vegas is seeming more inevitable by the day, what with deputy commissioner Bill Daly touring the $350 million arena MGM Resorts is building and speaking candidly about the potential for it; and multiple reports claiming that the league has actually selected an ownership group to work with in attempting to make it happen. 

The questions start to move from “will it happen?” to “can it work?”

Well, we decided to ask someone who’s tried to make pro hockey work in Las Vegas for about a decade.

Billy Johnson has been the president and COO of the Las Vegas Wranglers for the last seven years, having previously worked as a vice president with the team for a total of 11 years of service. The ECHL team took this season off after a dispute with its arena operator, but is scheduled to return to the league next season.

He knows the market – especially the showmanship side, lest we forget the Indoor Winter Classic and “Over 18 Night,” which featured exotic dancers in the arena, as well as midnight games.

So we asked Johnson a few questions about the NHL’s potential success in Vegas, based on concerns we heard from locals during a recent trip to Sin City.

Q. Is there a season ticket base in the Las Vegas valley that will support this team beyond the snow birds and tourists, or is the NHL in LV destined to become a team like the Coyotes or Panthers that rely too heavily on visiting fans to fill the building? Or is the entire concern overrated?

JOHNSON: That concern is not at all overrated. Bottom line: Any professional team that is relying on the strength of the visiting team schedule and/or tourists to make up for any lack of critical mass of hockey-oriented locals is probably leaving a lot to fall outside their control. It’s naïve and a rationalization. And it will be doomed.

With that said, no one I know has seen a business plan, so I don’t know how they are planning to attack revenues.

As far is a season ticket base, who knows? But I can point to the challenges we had to overcome that lead to midnight games and the like.

Just one example: This is largely a single-industry town, and that industry is hospitality/entertainment. Which means if there are 2.5 million people who live here, one subtracts the demographics that would not be likely customer (not an efficient use of resources), then you look at the nature of their jobs (pay scale) and the shifts they work (Vegas is three-shift city), that population number nets down pretty low for who is available with enough disposable income to see the Las Vegas Whatevers take on the Ottawa Senators on Wednesday. And in any market, the “time commitment” that goes with a ticket plan is becoming the hardest sell. 

Yes, it’s the NHL and it’s a big deal. But it’s a bigger deal for those in the NHL than those who are not. So, is it a big enough deal to shoulder its way into enough Las Vegas lives to cause them to change their habits?

Time will tell.

I’m not saying it’s not here. I’m only saying that the challenges here are unique, and it will not at all be, “We brought you the NHL,” and they’ll just have to man the phones and take orders.

It’s going to take a lot of very smart work, no shortcuts, some humility, and the very first step is knowing the very unique things they will have to overcome to pull even with the other markets in the league, then launch from there.

Q. Do you think an NHL team needs significant support from the casinos to excel, i.e. having boxes and tickets gobbled up each game for comps?

JOHNSON: They are going to have to get it… it’s the primary industry where all the money is and most of the workforce lives.

I think they will get some of that. The team will have to make compelling arguments to these prospects that taking their prime customers off their properties and away from injecting revenue into their veins is a calculation that works for them. And will they be able to sustain that value for the long term? Ten years? Twenty? Honeymoons don’t last that long. So they’ll have to get ahead of that.

The Wranglers found its way around that type of thing, and the question is, can the NHL do the same at those price points to these potential customers? Again, it’s going to require vision, with a lot of respect to the history of the market.

Q. The expansion vs. relocation debate is an interesting one. Some people seemed convinced that putting an established team in LV would exponentially increase the chances for success rather than having an expansion team gestating for 3-5 years into a contender. Thoughts?

Construction of the Vegas arena
Construction of the Vegas arena

JOHNSON: Why? Is the team with last season’s best record looking to relocate? Not likely.

Las Vegas loves a winner and tends to ignore everything else (unless you can brand the team as more than just wins and losses like the Wranglers have done).

One thing is pretty certain: a team will 1/3 of its games, and lose 1/3. It’s the other 1/3 no one knows about. So marketing this team is going to have account for more than winning, or even being competitive. This team will not be the Yankees with a fan base that took generations to build loyalty and they suffer the losses with the Team. This is going to be something far less than that. Overcome that, and it’s got a chance.

The eventuality is that the ability to be competitive relies on the ability for customers to pay the ticket prices to fund the effort (assuming an ownership group’s tolerance for loss is reasonable). Either way, expansion and relocation will require revenues to sustain, and a lot of people lose common-man fortunes trying to win.

But the big picture is that there are other transactions around a potential project like this that quietly matter more to the off-the-ice players. If anyone thinks this deal is just about hockey, they are noble and true to the game, but they are wrong. 

Q. Do you think this team would benefit from a different start time for games? I know the Wranglers used to play in the afternoon all the time on Sundays; do you think an earlier start time during the week would lessen competition with other Vegas events? Or does that matter for gate?

JOHNSON: In Las Vegas there is competition every day and at every hour. An NHL game at any time on any day will never be the only thing going on. But in my mind, the biggest competition the team will have will be itself.

They are going to have to overcome that less than 7 percent of Las Vegas residents have ANY interest in professional hockey (Scarborough Research) or 91,000 people (FiveThirtyEight.com). Those two numbers from those two sources come pretty close to tying out.

The questions are: What do you do with that? Can you grow those numbers? Can you create pricing that let’s them participate? I think you can. But it’s going to take some very unconventional thinking, some real vision, and a lot of hard working people imbedded and committed to the community in a genuine and meaningful way that matters to the people who live beyond the Strip.

For us, the Midnight games served our market well, because it invited people who worked whenever we played, and took a terrible drawing Tuesday night and turned into a premium date.

Participating in the NHL serves an entirely different set of masters (television, road travel, player unions, and so on). The beauty of the minor leagues is that we have far more room to play with game times, make fun of Harold Camping or bring Tony Clifton back to a spotlight.

Finally, if you had a say ... what would you name the team?

JOHNSON: The Las Vegas Billy Johnsons. I’d buy lots of merchandise. I mean, lots.

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