Despite declining ticket sales, the Winnipeg Jets have never lost money, True North says

The company that owns the Winnipeg Jets says it has never lost money since the NHL returned to Winnipeg in 2011, even during the recent slump in ticket sales at the Canada Life Centre.

True North Sports & Entertainment has had the NHL in Winnipeg every year through its combined hockey, arena and merchandising operations, executive chairman Mark Chipman said during a wide-ranging interview about the economics of running a professional sports franchise in the smallest venue. Market in the National Hockey League.

As a private company, True North does not publish its financial statements, leaving business publications such as Forbes magazine to do so. predicting team profits and losses.

True North has only lost money from hockey operations, but hasn't been in the red since the former Atlanta Thrashers moved to Winnipeg in 2011 to become the Winnipeg Jets, Chipman said in an interview.

“Overall, no, we've never lost money in our NHL years. In previous years, we've lost,” Chipman said earlier this month in a boardroom speech at the True North offices in downtown Winnipeg.

While Jets, Manitoba Moose ticket sales, concerts at the Canada Life Center and other events are True North's most important sources of revenue, merchandising, broadcast rights and other revenue streams keep the company in the black, he said.

Revenue sharing within the NHL, as well as league-mandated salary caps, limit rostered team spending to $83.5 million this year.

Chipman said the NHL would never have returned to Winnipeg without revenue sharing and a salary cap.

“This market couldn't survive without it, that's a fact,” he said, noting the initial decision to return to the NHL because of revenue projections.

Economic impacts and government subsidies

The company's various arms have invested $1.6 billion in downtown Winnipeg real estate since 2004, according to figures released by True North last week. True North contributes $616 million annually to the municipal and provincial economy, as well as $133 million to tax coffers. every year at all three levels of government, the company says.

True North also receives municipal and provincial tax subsidies, including a $576,000 property tax abatement at the Canada Life Centre, a $246,000 business tax rebate and the potential to collect about $6.5 million in entertainment tax on arena events.

True North is also eligible for revenue from the 140 slot machines at the Shark Club at Cityplace shopping center under a provincial funding deal created by the former Greg Selinger NDP government to help True North weather future economic challenges.

While the province expects gaming revenue to average $5.5 million a year, Chipman said the Shark Club's actual revenue averaged closer to $2.5 million a year.

“It's never been a guaranteed source of income,” Chipman said. “It never made it into the Jets P&L (profit and loss statement). It was always inside the building and it was focused on paying off the debt.

“We thought it was important to pay off the debt as much as we could.”

According to Chipman, True North has not received a share of any profits since the return of the NHL. Instead, he said, all of the team's profits have been reinvested in the Canada Life Centre: $83 million since 2011, according to figures released last week by True North.

“We spent as much as we spent on renovations,” he said, referring to the $133.5 million construction project that took place in 2003 and 2004.

“We don't look at it as a garden business. You may have heard us use the word stewards or custodians. It's true. We own it because someone has to own it, but it doesn't really belong to us.”

Franchise cost growth

Long-term, the Winnipeg Jets don't need to produce financial dividends in a league where franchise values ​​are rising.

True North paid $170 million to acquire the Atlanta Thrashers in 2011. Forbes valued the Winnipeg Jets franchise at $780 million before it was reported last week that Salt Lake City's NHL owner was willing to pay $1.2 billion for the Arizona Coyotes. franchise.

“Many of these owners are involved with their teams because they want to resell the value of the club one day,” said Glenn Hodgson, an Ottawa economist who specializes in professional sports.

However, Chipman's comments about reinvesting revenue are important because there is skepticism about True North among elements of the Winnipeg Jets fanbase.

In recent years, some vocal fans have claimed that Chipman and True North are only interested in profiting from ticket-buying fans. Some were outraged when Chipman said in February Athletic If the season ticket base does not return to 13,000 seats from the current level of around 9,500, there will be consequences.

“We find this place right now, it won't work for a long time. It's not easy,” Chipman told The Athletic, sparking speculation that the team owner threatened to move the Jets.

Chipman says his explanation was misinterpreted and that he meant the True North couldn't afford to spend close to the salary cap every year without selling more tickets to Jets games.

“To win, to get the fans involved, you have to do everything you can to win,” he said.

Not a fan of demolition and reconstruction

Chipman said that's why he wasn't a fan of dismantling the team's core last summer, as some hockey observers expected former forward Pierre-Luc Dubois to leave Winnipeg and general manager Kevin Cheveldeiffe to do given the expiring contracts. for center Mark Scheifele and goaltender Connor Hellebuyck.

Instead of trading all three All-Stars for draft picks, Cheveldeiff traded Dubois to Los Angeles for Gabriel Vilardi, Alex Iafallo and Rasmus Kapuri, adding more depth to the Jets' lineup as a result. Scheifele and Hellebuyck signed long-term contracts.

Expected by many hockey experts to miss the playoffs, the 2023-24 Jets are now set for a first-round playoff showdown against the Colorado Avalanche.

Chipman made it very clear to him that he's not a fan of tearing up and rebuilding an NHL roster.

“I've learned from people in this business, and their advice has been invaluable in terms of the pitfalls of breaking a team,” he said. “I would challenge people to show what rebuilding is all about. How do you do that?”

He said the Boston Bruins have not been crushed since winning the Stanley Cup in 2011 and have returned to the Cup Finals twice since then.

“For the longest time, they had (Patrice) Bergeron and (Brad) Marchand and so on. They kept their base,” he said.

Chipman insists that the true North will do whatever it takes to win the Stanley Cup.

“Our only goal is to try and win. “If I didn't think it was available, I wouldn't be in this business,” he said.

“Believe me, I'm not trying to empathize with anyone who has to do this for a living, but it's a tough business and it's tough to beat.

“But I like it. I love that we're the smallest market, and then we get up every morning and try to compete with bigger businesses that have more resources, so we try to win. “

The extreme mentality is legitimate

According to Hodgson, the slack mentality is legitimate.

“Winnipeg was already challenged. It's the smallest market in the NHL. It's a long way from anywhere else. It has the smallest building,” he said.

But Chipman said he's confident Winnipeg is a big enough city and has enough wealth to support an NHL franchise and succeed on the ice.

As evidence, he pointed to the fact that the Winnipeg Jets have won more regular-season games than any other Canadian NHL team — 517 as of April 13 against Colorado — since the league returned to Winnipeg in 2011.

Chipman also makes quite the impact in the NHL. He now sits on the executive committee of the league's board of governors, which sets policy direction for a broad group of NHL owners.

He connects his participation in this committee with the issue of representation.

“I think it was the idea that it made sense to have one of the smallest markets and nod to the way we operate,” he said.

“I have to believe that has something to do with it — they're trying to spread their influence throughout the league.”