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Stoppage of play due to coronavirus could cost Blues millions in revenue

Stoppage of play due to coronavirus could cost Blues millions in revenue

Blues take on Blackhawks at Enterprise Center

Blues players Alex Pietrangelo, Justin Faulk, Robert Thomas, Alexander Steen and Tyler Bozak — plus a sellout crowd of 18,096 — celebrate Faulk's goal against the Chicago Blackhawks on Dec. 14 at Enterprise Center. (Post-Dispatch photo by Troy Stolt)

The Blues could lose millions in revenue from the six regular-season home games that remained on their schedule when the NHL announced it was suspending play indefinitely due to the coronavirus pandemic.

How much depends on how you do the math. And of course whether any or all of the six games eventually are replayed, not to mention the playoffs.

Jesse Lawrence, founder of Ticket IQ, a New York-based ticket market search engine, estimates the Blues’ lost revenue for those six games would be $15.85 million dollars based on an average secondary market ticket price of $146, and assuming that every ticket is sold at Enterprise Center (capacity 18,096).

“There’s all sorts of impacts,” Lawrence said. “Ticket sales is one of them. I don’t know what happens with media rights in a situation where games aren’t getting played, sponsorships, all that.”

And of course, there are food, beverage and souvenir sales. Parking revenue.

Crunching data from the Team Marketing Report, Washington University’s Patrick Rishe came up with another set of numbers.

Team Marketing Report’s Fan Cost Index for the Blues was $374.57 per game. The Fan Cost Index is the average cost of attending a game by a family of four. The figure includes the cost of four tickets, parking for one car, plus the least expensive price for two draft beers, four soft drinks, four hot dogs and two adult-sized team caps.

Using the Fan Cost Index for a capacity crowd at Enterprise, Rishe calculated that the Blues were losing $1.7 million in revenue per game and $10.2 million for the six remaining home games.

“I think that’s a fair estimate of the lost revenue, both ticket and venue-related revenue from those six games,” said Rishe, director of the Sports Business Program at Washington University. “I think that puts a decent estimate on what the Blues are looking at, and probably very similar — plus or minus $2 million or $3 million — for every team in the NHL.”

The actual number is probably closer to Rishe’s than Lawrence’s because ticket prices on the secondary market — which Lawrence used for his calculations — can be much higher for a successful team that fills the building, than face-value ticket prices.

But the actual number is probably higher than Rishe’s estimate because the Fan Cost Index uses the average price of nonpremium seats only for its ticket calculations. (For the Blues that average price was $62.38.) And doesn’t factor in suite or club seat prices, which are much higher.

And, of course, it’s a bit of an apples to oranges comparison because Lawrence’s numbers do not include concessions and parking. But the basic point remains the same. The postponed games represent the potential for millions in lost revenue for the Blues in a sport much more dependent on ticket sales and in-game revenue than other major North American sports.

“There’s no question,” Rishe said. “That’s right on the head. Comparatively, ticket revenue is a larger share of hockey’s total revenue than is true for the other sports. So for them to lose gate is obviously difficult.”

That’s because the NHL gets significantly less television revenue than the NFL, Major League Baseball or the NBA.

For the Blues, like other NHL teams, a long playoff run in games that have higher ticket prices than the regular season can be very beneficial to the bottom line.

“At Madison Square Garden here in New York, I know that a playoff game is worth a million bucks of profit for them,” Lawrence said.

(That’s “profit,” not “revenue.”)

“That figure may be different in St. Louis,” Lawrence continued. “But if you get into the postseason, especially with a long run like the hockey playoffs, that does add to it.

“So yeah, it’s a hit either way. Obviously, the league’s hoping that there is a season and there is a playoff but that’s still TBD.”

If that’s the case, and the games are merely postponed and not canceled, those losses will go away.

Since the NHL’s “pause,” or suspension of play, the Blues have lost two home games: last Friday against San Jose and Sunday against Ottawa.

What would have been their final four home games of the regular season were scheduled from March 27 (against the Los Angeles Kings) through April 2 (Boston Bruins).

Many teams have sent out information to their fans about adjusted ticket policies, offering the option for fans to ask for refunds on canceled games or have that money pushed forward to the 2020-21 season.

The Blues have yet to send out any such information to fans, perhaps waiting until when or if the postponed regular-season games officially become canceled games.

In an email to season-ticket holders sent out last week, the Blues said: “... we ask for your patience until we have further details to provide regarding the remainder of the season. As a full season account holder you will receive details as soon as the new schedule is determined.”

That is, if there is a new schedule. The NHL announced Monday that any resumption of play would not take place until mid-May at the earliest. Ongoing developments in the coronavirus pandemic could change that.

Even if the regular-season games (or playoffs) are canceled, it’s possible the Blues have insurance against lost revenue for business interruption.

“The language of the contract, the language of the insurance clause is meaningful,” Rishe said. “Many of the insurance clauses, they may address things like hurricanes, earthquakes, but they may not necessarily address things like global pandemic. So then the question becomes is there any kind of latitude?”

Even in the worst-case scenario — no games and no insurance — the Blues can ride this out.

“No one wants to see this happen,” Rishe said. “But do I anticipate they’re gonna be able to survive this, absolutely. Every team in the NHL is gonna survive this. It’s just obviously trying and uncertain times for everybody in the sports industry right now.”

Especially the part-time workers at arenas around the league. Or the parking lot attendants, or workers at restaurants and bars and to an extent hotels around the arena.

“I think the folks that are getting hit are the hourly workers, and the folks that aren’t the big superstars and the owners,” Lawrence said. “It’s the people that are relying on the team’s ecosystem to generate income for them, whether it’s ushers or bars around the stadium. I think that’s probably the biggest immediate impact.”

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