Initial Thoughts on the University of Ottawa's Senators Sports & Entertainment 2012-13 Impact Study

There are at least 3 tourists in this picture. - USA Today Sports

Earlier today, the University of Ottawa released a study led by Norm O'Reilly, MBA, PhD, CGA examining the economic impact of Senators Sports & Entertainment from August, 2012 to August, 2013 on the Ottawa-Gatineau region. Here are my initial thoughts on the first half of the 41-page document:

  • The abstract indicates that the study's aim is to "take an academic and conservative approach to estimating the economic, sport, community and social benefits of SSE". The research team includes three professors specializing in sport finance and marketing as well as over 100 students including class members of a graduate-level course on sport finance. Obviously an impact study designed to assess the economic impact of a business like SSE would include finance and marketing experts but the "community" aspect of the stated aims makes me wish the study had included more diverse scholarship, such as experts with a cultural studies background or professionals with experience in the tourism industry. I don't think this is an oversight, however, as "intangible impacts" are not considered (4). If the economic importance of a professional sports team is hard to quantify, its cultural importance is even harder to quantify.
  • Sometimes Senators Sports and Entertainment is a synecdoche for the Ottawa Senators and sometimes it refers to the entire network of related businesses and operations managed under the umbrella of SSE. I think one of the positives of this study is that the researchers considered the impact of the Sens as well as concerts, special events, the multiple venues of SSE, and charitable work.
  • The timing of the report might seem convenient for the organization, but other factors (the general economic climate of the previous few years and the changing sports landscape in Ottawa) obviously played into it. The sports landscape in the capital has been the same for the better part of a decade since the Renegades finished in 2006. But as the report mentions on page six, pro or semi-pro football, soccer, and basketball teams began operations in 2013 or will begin operations later this year. Additional teams mean additional ways of spending discretionary income for fans. But it's important to remember the Sens would still be tops in the new landscape as both the most established franchise as well as being a member of the most prestigious league.
  • The report stresses and examines the intangible benefits of the organization on community organizations such as the United Way (13-14). Ottawa's privileged status as national capital leads to an influx of federal spending in the city. While federal money is spent in specific ways in this city, corporate spending in the community can sometimes get lost in the shuffle.
  • I didn't realize the Bell Sensplex was so active. In addition to the Bell Capital Cup, the Sensplex hosted 36 tournaments in 2012 (15). The report considers only out-of-town participants/visitors in terms of impact. Annually, the 36 tournaments draw 630 teams from outside the capital region, and these teams and associated parents, children, spouses etc. spend 2.92 days in the region on average. They bring in an estimated $6,938,754.42 to the Ottawa/Gatineau CMA (Census Metropolitan Area). The Bell Capital Cup attracted 268 out-of-town teams in 2012 and brought in $2,962,896.30 to the CMA. Both of these direct impact totals are on the conservative side (as per the stated methodology of the study). The researchers then used a multiplier of 1.2 to estimate indirect income from these events and came up with a figure of $11.5 million combined during the year studied. The report does not specify if ice and field rentals are included in those numbers, nor does it provide a breakdown for the allocation of those fees.
  • Understandably, the results of the study are impacted by the fact that the owners locked out the players for a significant portion of the 2012-13 season (the study covers August 2012 to August 2013, so the 2012-13 season is the season studied. The authors of this study refer to the 2012-13 lockout, sanctioned by the NHL owners as the "NHL work stoppage" (17). This is just my personal opinion, but in both recent examples (2004-05, 2012-13) I feel that how you describe what took place between the owners and players reveals something of which side of the argument you fall on and "work stoppage" is a euphemism which favours the owners' outlook.
  • In chapter 2.3 "Studies Undertaken and Results" the results for a study on "Season and Single Game Ticket Holders for the Ottawa Senators (direct, indirect, and intangible impacts)" are...interesting (16-17). The study analyzed SSE and survey data to estimate true non-displaced spending. However, the lockout (not "work stoppage"') forced an alternative method of estimation because the research team couldn't complete surveys at Sens games. Fair enough. So concerts and "Ottawa 67s games held at (the then) Canadian Tire Centre" were substituted as a replacement. When play resumed in 2013, a survey of tourists at a home game was completed. The opponent during that game? The Toronto Maple Leafs. These three events were used to determine 25% of visitors to CTC live outside the Ottawa Gatineau CMA. I'm willing to concede that people come from outside the CMA for concerts and Leafs and Canadiens games. However, Leafs/Habs games only account for about a quarter of home games and are not representative of the other 30 or so games played each season at CTC. Admittedly, I don't know much about the 67's, but I suspect fans aren't driving from Toronto and Montreal to see them play. Why? Because they aren't driving from downtown to see them play. Additionally, the relationship between the 67's and SSE ends when the junior team moves back into the Civic Centre next season and I don't know if the 67's lukewarm ticket sales while playing in Kanata is an indication of anything other than fans don't want to drive to Kanata for junior hockey. I get that the lockout significantly impacted this particular study on Sens single game and season ticket holders, but concerts, 67's games, and one Sens game against the Leafs probably aren't a sufficient substitute.
  • The authors of the study indicate that a key finding is that the average tourist (25% of people attending Sens games) spends an average of $535.26 locally (not including tickets) during a 1.7 day visit to the CMA. During a normal, 82-game schedule those numbers translate to over 100,000 visits to Ottawa (103,797; including 17,000 from the US and 6,000 Canadians from outside Ontario and Quebec). I think the influence of concert surveys (many big name tours have a few, select Canadian stops and often avoid Quebec and Atlantic Canada) as well as that single Leafs game are potentially skewing data. Furthermore, the study doesn't seem to consider the possibility that tourists decide to visit Ottawa and then take in a Sens game for something to do at night instead of decided to see a Sens game, requiring the visitor to stay in the city for approximately 1.7 days. I think it's great that the study tries to determine the impact of industries outside the domain of the federal government on Ottawa's bottom line but to ignore the draw of Ottawa's status as capital on tourist revenue seems flawed. While many of Ottawa's capital draws take place during the traditional summer tourist season, a compare and contrast with month-long events like Winterlude might paint a clearer picture. Because Ottawa has the federal government, people also visit the capital for conferences and meetings. These business travelers don't come for Sens games, but might make the trip out to see the Sens. In this case it's not so much the Senators generating income for the city of Ottawa, as much as it's the federal government generating income for the Senators.
  • Regardless, the report concludes that these tourists bring with them a direct economic impact of $55,558,382 to the CMA plus the indirect economic impact to the CMA calculated with the report standard 1.2 multiplier. The authors also suggest that tourists spend an additional $5.7 million on tickets during the regular season, but don't explain why.

These are just some thoughts from the first 20 pages of the report, if I have anything to add after reading the rest, I'll write another post.

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