Sometimes smaller is better.
For decades, major sports leagues have tried to place teams in the country’s largest markets to sell more tickets and sponsorships and satisfy broadcasters who want to reach as many viewers as possible.
But in recent years, the league has embraced the appeal of smaller markets. Teams relocated to cities such as Oklahoma City, Las Vegas, and Winnipeg, Manitoba, in search of financial incentives, new arenas and stadiums, and more devoted fans.
In early April, the National Hockey League approved the $1.2 billion sale of the Arizona Coyotes to tech billionaire Ryan Smith and his wife Ashley. The team, which will be renamed, is scheduled to begin play next season at Salt Lake City’s Delta Center, home of one of Smith’s other teams, the Utah Jazz of the National Basketball Association (NBA).
On the surface, this move may seem like a step down. Salt Lake City’s metropolitan area is less than half the size of Phoenix. Salt Lake City is the 29th largest media market and Phoenix is the 11th largest media market. Utah has never been home to an NHL team. But the league’s decision focused more on Salt Lake City’s demographics than its size. Like Phoenix, Salt Lake City is one of the fastest-growing cities in the United States. But in Utah, a thriving tech industry has brought an influx of younger workers with disposable income.
“People don’t just come to Utah to retire,” Ryan Smith said in an interview. “If you have two fast-growing states, you will always choose the younger state for a prosperous future.”
The league has been “right-sizing” its operations for years to make money from fewer fans. The Mets were one of many baseball teams to build smaller stadiums with more luxurious clubs and suites. Citi Field, which opened in 2009, seats just 42,000, while the team’s previous home, Shea Stadium, seats 55,000. Small stadiums and stadiums are easier to fill. It’s not nice to see empty seats on television. And the team can focus on more upscale concessions, club seating and exclusive “experiences.”
It typically takes several years for a team to prepare for a move. But Commissioner Gary Bettman said the NHL needs to act quickly because the Coyotes need a stable owner and a big league stadium. The team had trouble attracting fans and its finances were so messed up that the league temporarily took over the club a decade ago. Since arriving from Winnipeg in 1996, the Coyotes have played in a variety of venues. Their home last season was a college stadium that seats just 5,000.
But in Salt Lake City, enthusiasm for the new team was strong. Fans paid deposits for more than 30,000 tickets in a stadium that could accommodate about half that number. Of those who registered, 64% had not attended a Utah Jazz game in the past three years, Smith said. While the Coyotes were overshadowed by Phoenix’s NFL, NBA and Major League Baseball teams, a new hockey team was already making a mark in Salt Lake City, where it would compete for attention with the Jazz and two football teams.
“Even if the market is smaller, there can be more innovation, especially when the team is new and there’s a lot of noise around it,” said Frank Hawkins, a longtime NFL lawyer who now works as a media consultant. He said. “The other thing is we’re moving from a four-team market targeting snowbirds who aren’t from hockey countries.”
In contrast, Salt Lake City and the surrounding area are already destinations for winter sports. The region boasts some of the best ski slopes in the country. The city hosted the Winter Olympics in 2002 and is trying to host them again in 2034. Many of the U.S. Olympic teams train in the area.
The broadcast media environment is also changing. At a time when the NHL relied on broadcasters to broadcast its games nationally, networks wanted to reach the country’s largest markets so they could charge more for advertising. Likewise, cable networks like ESPN look for markets with the most cable subscribers.
But millions of households lost their cable connections, undermining sports cable networks. In response, Smith signed a new deal with an over-the-air broadcaster that would allow Jazz to launch a direct-to-consumer streaming service and reach farther than traditional cable territories.
“With so many people cutting the cord and not buying their typical cable bundle, the question now is who will pay the extra money for a streaming product compared to the sheer market size if everyone paid, regardless of whether they watched it or not. Number of fans. said Marc Ganis, a media affairs consultant for numerous sports teams.
The NHL has not ruled out a return to Phoenix. Bettman has spent decades trying to keep the team afloat, and the league believes the Phoenix franchise can still be successful with the right owner and stadium.
Coyotes owner Alex Meruelo will retain the team’s intellectual property, including the logo and records. Meruelo could revitalize the Coyotes if he finds a suitable home and pays the $1 billion extension fee he received in exchange for leaving the team for Utah to return to the league.
The league is also said to be considering other markets, including Atlanta, which was home to an NHL team, and Houston, which had a team in the defunct World Hockey Association.
For now, the league’s focus is on Utah. From there, the Smiths had only a few months to sell tickets and prepare for the franchise’s first season in a new city.
Perhaps fans will “see this as an opportunity to start from scratch with their families and say, ‘This is one of the things we’re going to do,'” Smith said.
