The
postseason is underway and five of the seven Canadian NHL teams are in the running for the Stanley Cup
—
the most to make the 16-team playoff since 2017. Will heightened patriotism born of the
encourage fans to come out and spend? Or will financial uncertainty keep them at home? Here, the Financial Post explores the potential economic impact of this year’s “
” playoffs.
How much are Canadian fans likely to spend during the playoffs?
Playoff success can be a financial win for Canadian cities, especially for local businesses situated near the hockey arena. The Edmonton Oilers’ playoff run last year generated $280 million for the city, according to Explore Edmonton, an event management and marketing company.
A Moneris analysis from last year found that when the Oilers made it to game seven of the Stanley Cup finals, businesses near Rogers Place saw spending increase 214 per cent on game night. Spending in the city overall increased 78 per cent, and it was up 33 per cent across the province. Moneris also noted a 16 per cent rise in spending nationally.
However, sport management professor Dan Mason said the net economic impact for the country is limited. “If we’re looking at Canada as a whole, I don’t think there is really that much of a significant economic impact because the money is just relocating and recirculating in a different way,” said Mason.
“There are just more apparel shops and sports bars selling jerseys and beers, but that money is not being spent at the Safeways and movie theatres,” he said.
Cities with playoff teams could see a net positive impact, but on the national or provincial level it is expected to be a wash, said Mason. “In Edmonton, you have people coming in from Lloydminster, Mundare and Edson, and that benefits the city, but then there’s a loss in those (other) cities. So the money is just moving around. It’s not new money,” he said.
Laurel Walzak, an associate professor of RTA Sport Media at Toronto Metropolitan University who specializes in sports fandom and audience behaviour markets, says economic hardship could cause a reduction in spending by some fans this postseason. “People’s wallets are hurting, people are losing their jobs, Canadians are really feeling it, and so they may not be spending as much on going out as they would have in the past,” said Walzak.
found that 49 per cent of Canadian respondents expected to cut back on spending at restaurants and bars and 43 per cent expected to reduce spending on entertainment, according to data and technology company Numerator.
How will the “buy Canadian” movement affect playoff spending?
Walzak expects the Buy Canadian movement will push hockey fans to direct their spending toward Canadians products and establishments.
“Perhaps you’re going to see more people buying, let’s say, Molson Canadian over Budweiser, (or) more people going to Canadian establishments than big American quick-serve restaurants, those sorts of things,” said Walzak.
A March
said that 70 per cent of Canadians had reduced their purchases of American products, while 74 per cent and upped their spending on those made in Canada.
“The amount of spending is going to change, and the type of spending, and where they’re putting their dollars,” said Walzak. “At the grocery store, when they go to the frozen section to buy chicken wings or chicken fingers, they (might buy), say, Pinty’s, a Canadian brand, versus an American brand,” said Walzak.
On an earnings call on April 16,
its in-store sales of Canadian products were now
total sales, and chief executive Eric La Flèche said the gap appeared to be accelerating.
Loblaws and other major retailers have also reported an increase in sales of Canadian products, while Empire, which owns Sobey’s, has reported a drop in sales of U.S-made goods.
How will the number of Canadian teams affect viewership and broadcast revenues?
With so many Canadian teams in the playoffs (at least for now), and some fans potentially opting to stay home out of economic concerns, viewership numbers are likely to rise, said Walzak.
“We’re going to see the viewership numbers go up for sure. Those numbers could be unprecedented with this many Canadian teams in the playoffs,” said Walzak.
Mason said increased viewership would mean more money for broadcasters.
“For example, if Montreal goes on a deep playoff run, they’re going to be able to sell television advertising for a higher rate in Quebec,” he said.
Last year, the first round of the playoffs averaged 2.260 million viewers, according to the NHL, which was a six per cent increase from the previous season. Game seven of the Toronto–Boston series garnered the most viewers, at 8.823 million, making it the most watched first-round game in North America on record.
However, when it comes to advertising, Walzak said American companies may reevaluate their spending if they see worse returns on investment as Canadians turn away from their brands.
“I’d be interested to see who’s spending on playoff broadcasts, if it is the American multinationals versus the Canadian companies. Are the Canadian companies coming out with strong advertising? It depends on how much they’re impacted.”
Earlier in the month, Corus Entertainment said it saw a potential
thanks to the “Buy Canadian” movement. Co-chief executive Troy Reeb said advertisers were looking to take advantage of its platforms to reach Canadian audiences. The buy Canada movement is helping mitigate advertising trends, according to Reeb.
Mason said he thinks this playoff run is important given the current political landscape.
“Given the changes that are going on with the global order, I think the fact that there are more Canadian teams in the playoffs is good timing for Canadians. It gives them something to think about and cheer for, and something to take their attention away from some of these other issues,” he said.
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