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On going south: the economics of survival and relocation of small market NHL franchises in Canada


  • Angelo Cocco
  • J. C. H. Jones


This paper considers the issue of team viability and professional franchise relocation, a problem common to all major sports leagues in North America. Specifically, using the National Hockey League in the 1990s as the analytical vehicle, the proposition that the viability of Canadian Small Market Franchises (SMF) is in doubt because of a combination of inadequate revenue (due to the quality of their locations) and escalating salary cost, is examined. Using game by game data for the 1989/90 season, revenue, costs and profits by team were estimated and it was concluded that Canadian SMF are indeed an endangered species. Several alternatives which might rectify the problem are considered (revenue sharing, salary caps, public subsidy), but none are as attractive or as realistic as relocating south to US cities. The behaviour of SMF in the 1990s is consistent with this prognosis.

Suggested Citation

  • Angelo Cocco & J. C. H. Jones, 1997. "On going south: the economics of survival and relocation of small market NHL franchises in Canada," Applied Economics, Taylor & Francis Journals, vol. 29(11), pages 1537-1552.
  • Handle: RePEc:taf:applec:v:29:y:1997:i:11:p:1537-1552
    DOI: 10.1080/000368497326363

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    References listed on IDEAS

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    Cited by:

    1. Daniel, Rascher, 2008. "Franchise Relocations, Expansions, and Mergers in Professional Sports Leagues," MPRA Paper 25809, University Library of Munich, Germany.
    2. B Buraimo & R Simmons, 2006. "Market size and attendance in English Premier League football," Working Papers 574562, Lancaster University Management School, Economics Department.
    3. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    4. John C. Leadley & Zenon X. Zygmont, 2006. "When Is the Honeymoon Over? National Hockey League Attendance, 1970­2003," Canadian Public Policy, University of Toronto Press, vol. 32(2), pages 213-232, June.
    5. Humphreys, Brad R. & Zhou, Li, 2015. "Reference-dependent preferences, team relocations, and major league expansion," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 10-25.
    6. Narme, Thibaut, 2013. "On the dynamic of franchise (re)location in the North-American sport leagues," MPRA Paper 50873, University Library of Munich, Germany.
    7. Humphreys, Brad & Zhou, Li, 2014. "Loss Aversion, Team Relocations, and Major League Expansion," Working Papers 2014-3, University of Alberta, Department of Economics.
    8. J. C. H. Jones & J. A. Schofield & D. E. A. Giles, 2000. "Our fans in the north: the demand for British Rugby League," Applied Economics, Taylor & Francis Journals, vol. 32(14), pages 1877-1887.
    9. Barajas, Angel, 2004. "Modelo de valoración de clubes de fútbol basado en los factores clave de su negocio
      [Valuation model for football clubs based on the key factors of their business]
      ," MPRA Paper 13158, University Library of Munich, Germany.
    10. Barajas, Angel & Crolley, Liz, 2005. "A model to explain support in Spanish football," MPRA Paper 3235, University Library of Munich, Germany.

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