Is Salt Lake City a hockey town?

Arizona Coyotes center Liam O'Brien celebrates with right wing Christian Fischer (36) after scoring a goal against the Vancouver Canucks during the first period of an NHL hockey game Thursday, April 13, 2023, in Tempe, Ariz. (AP Photo/Rick Scuteri)
Arizona Coyotes center Liam O'Brien celebrates with right wing Christian Fischer (36) after scoring a goal against the Vancouver Canucks during the first period of an NHL hockey game Thursday, April 13, 2023, in Tempe, Ariz. (AP Photo/Rick Scuteri) | Rick Scuteri, Associated Press

With the Arizona Coyotes reportedly headed north next season, Salt Lake City appears to have an opportunity to prove it’s a big-league hockey town. The Beehive State has a long tradition of professional hockey at the minor league level. But an NHL team would be a whole new sheet of ice.

Reports Friday, including one from ESPN, said that Coyotes general manager Bill Armstrong met with players before their game against the Edmonton Oilers to confirm “that the NHL is working to facilitate a sale to Ryan and Ashley Smith,” owners of Smith Entertainment Group, which already owns the Utah Jazz, Real Salt Lake and Utah Royals FC. Should the sale go through, the Smiths would inherit a team that has faced a fair amount of upheaval off the ice in the past few years. On the ice, the team will miss the playoffs this year for the fifth time in the past six years.

The team was unstable under earlier ownership. The NHL took over the Coyotes franchise in 2009, when then-owner Jerry Moyes gave up the team after he filed for bankruptcy. The NHL maintained control of the franchise until 2013 when it found new ownership willing to keep it in Arizona. Alex Meruelo, who acquired majority ownership in 2019, has tried unsuccessfully to build a new arena since the city of Glendale did not renew the Coyotes’ lease at the Gila River Arena in 2021. The team plays its home games at Arizona State University’s 4,600-seat Mullett Arena.

As of last December, according to Forbes, the Coyotes were valued at $500 million, lowest in the 32-team league. Sportico puts the valuation at $675 million. Reports suggest the Smith would pay at least $1 billion for the club.

Cost to Utah taxpayers

In Salt Lake City, the Coyotes — or whatever the team would be called — would play in the Delta Center, which Smith owns. But as ESPN reported the NHL has made clear to the Smiths that a hockey-specific upgrade is needed for the venue to become the team’s permanent home. (Ryan Smith asked people on X to weigh in on a team name earlier this week.)

That’s where a bill the Utah Legislature approved last month comes into play.

SB272 would allow Salt Lake City to raise sales tax to create a downtown revitalization zone, including a potential NHL hockey arena. Under the legislation, the city could raise its current 7.75% sales tax rate one-half of a percent — pushing it to 8.25% to help fund a hockey-specific arena or renovate the Delta Center to better accommodate hockey. The measure ensures the Jazz and a possible NHL team stay in the capital city.

“The idea of professional sports in a city, in a downtown is the greatest anchor tenant that a city could have, hands down,” Smith told a legislative committee in February. “The opportunity to have multiple sports downtown can transform and revitalize and invest and grow a city in a way that is almost irreplaceable any other way.”

Utah led the nation in growth during the 2010s. The combined statistical area of Salt Lake City, Provo and Ogden has an estimated population of nearly 2.8 million people, according to the Census Bureau. The Kem C. Gardner Policy Institute at the University of Utah estimates that the state’s population will grow to 5.5 million by 2060. By some measures, Utah has the best economy and fiscal stability in the country.

According to SEG, the growth of the NHL’s business combined with the quality of the on-ice product have provided the league with great momentum. By virtually every metric, interest in the NHL has never been higher, reflected in national broadcast ratings on ESPN and TNT that are up by almost 30% over last season.

Is Salt Lake City a hockey town?

Whether Salt Lake City would support an NHL team remains to be seen.

Eric Schulz, who worked with NBC and World Wrestling Entertainment in 2002 to launch the XFL football league and headed the Larry Miller Sports & Entertainment Group, said Salt Lake City could be a viable hockey market.

“But it would be tough sledding for a few years after their inaugural season and the newness wears off,” he told the Deseret News earlier this year.

“Years two to five might be a bit of a struggle, especially if MLB comes to town and sucks up a lot of sponsorship dollars and ticket sales. NHL TV ratings have traditionally been low in Salt Lake City, so there isn’t as much awareness and interest as is the case with MLB.”

As Smith makes inroads with the NHL, the Larry H. Miller Company is doing the same with Major League Baseball as it pursues an expansion team for Salt Lake City.

Schulz, now a senior lecturer in marketing in Utah State University’s Jon M. Huntsman School of Business, noted Utah has had minor league hockey for a long time at the Maverik Center, and attendance there is fairly limited to the same core group of fans.

“NHL prices would be more akin to Jazz pricing, and that would be a tough upsell for those fans and that demographic,” he said.

Andrew Zimbalist, an economist at Smith College in Massachusetts who has consulted in the sports industry for players’ associations, cities, companies, teams and leagues, told the Deseret News last year that NHL hockey would be more “thinkable” in Salt Lake City than Major League Baseball because a season has fewer games and an arena doesn’t have as many seats to fill.

“But the problem with hockey is that, both in Canada and the United States, the national television contracts aren’t very large so teams depend even more on local revenue,” he said. “It has more promise than a baseball team but I think it would still be a heavy lift.”

Market watch

SEG’s sports broadcasting and direct-to-consumer streaming experience with its newly launched Jazz+ platform would likely be a valuable asset should the group add an NHL team to its portfolio.

Schulz said there is a finite group of companies sponsoring sports in Utah, and “I’m not sure they will pour more money into hockey. They may carve some dollars out of current sponsorships to move over, but probably won’t throw in more money. Most will take a wait-and-see approach, I think.”

The one advantage Smith’s group has is that it can bundle Jazz and NHL sponsorships to leverage the Jazz to get some NHL sponsor dollars, he said.

David Berri, a Southern Utah University economics professor who specializes in sports-related issues, noted of the 25 NHL teams located in the United States, six of them have smaller populations than the Salt Lake City-Provo-Orem area.

“That suggests that an NHL team in Salt Lake City would have every bit a chance to survive as a team in Buffalo, Nashville, Raleigh, Las Vegas, Columbus and Pittsburgh,” he told the Deseret News in February. “And given that we get more snow than three of those places, perhaps an NHL team would make even more sense in Salt Lake City.”

Beyond city size, Berri said he suspects “we will not truly know how much this population will support an NHL team until you put one here,” adding different cities have affinity for different sports. “I don’t think you can truly tell what will happen until you try.”

Berri said it’s worth noting that sports venues are not going to create economic growth.

“Research in this field makes that very clear. Sports teams can make us happier. Perhaps the best analogy is to think of building a park. Building a park in a neighborhood can make the neighborhood a nicer place to live. But it doesn’t create economic growth for the neighborhood. Adding a sports arena is very much like that,” he said.

Will fans show up?

Teams in the Beehive State, including the Salt Lake Golden Eagles and Utah Grizzlies, have at times excelled at the gate and in the rink over the years, even winning league championships along the way.

The Grizzlies, who play at the Maverik Center in West Valley City, are in the top third of the 28-team ECHL in attendance, averaging 5,334 fans per game last season, its highest in four years.

A successful NHL team would have to average at least three times that.

The Montreal Canadiens lead the league in attendance at 21,105, while the San Jose Sharks are at the bottom with 13,226 (Arizona Coyotes’ attendance is capped at 4,600 at their temporary home). The league average is more than 17,000 per game.

Fifteen of the NHL’s 32 teams were at 99% capacity or better for home games in the first two months of the current regular season, according to The Athletic, citing figures from Hockey Reference and HockeyDB. Ten more were at 91% or better.

Deseret News/Hinckley Institute of Politics polls last year showed fan interest in hockey appears to be substantially less than in baseball.

According to a May 2023 survey, 43% of Utahns say they would never go to an NHL hockey game, while 41% would attend less than five games a season. Another 10% say they would see five to 10 games.

Interestingly, 3% say they would go to more than 10 hockey games a year or buy season tickets — same as baseball, according to the poll.

Asked in a poll last September which sports franchise they would most support coming to Utah, residents ranked the NHL fourth behind the NFL, MLB and National Women’s Soccer League at 10%, a percentage point higher than the WNBA.