NHL

In the NBA and NHL, there are only eight playoff spots respectively for each conference and as the two seasons are coming to a close, fans, owners and mere citizens alike in Dallas and Phoenix are more nervous than ever. In the NBA, the Phoenix Suns (44-30) and Dallas Mavericks (44-30) post the exact same overall, conference, division, home and road records, but as it stands right now, the Mavericks are in the postseason and the Suns are left out. In the NHL, the Phoenix Coyotes (36-27-13) and Dallas Stars (37-27-11) post nearly an identical record and with the Stars owning the tie-breaker, as it stands right now, the Stars are in the playoffs and the Coyotes are left on the outside looking in. As the Dallas Mavericks/Phoenix Suns and Dallas Stars/Phoenix Coyotes vie for a final playoff spot against each other, the ramification of making the postseason in each sport is more than what can be measured in pride, a renewed rivalry or a chance to win a championship alone; they are felt in the team’s future draft standings, the pockets of their team’s owners, the businesses that surround (or do not surround) the team and the amount of focus/attention it may bring their respective city and their local economies.

As mentioned in a Forbes article by Kurt Badenhausen, if NHL and NBA teams make a long run in the playoffs, the implications are steeply felt in the pocketbooks of each franchise. A deep playoff run by the Stars/Coyotes or the Mavericks/Suns can generate profit margins that are up to 50 percent, in addition to $20 million-plus in revenue. In the NHL specifically, many of the teams’ owners talk about how they will need to make the playoffs (or even the second round) in order to make a profit on the year. For example, when the New Jersey Devils made the playoffs and Stanley Cup Finals in the 2011-12 season, they were set to lose a ton of money before their deep playoff run. During the playoff run, the Devils were able to turn a slight profit by the end of everything due to sky-rocketed ticket pricing.

Aside from ticket price revenue, the playoff runs by the Phoenix Suns and Dallas Mavericks dictate their draft pick status for next year. In a year that is set to be one of the biggest talent pools in the history of the NBA Draft, making the playoffs can have huge draft pick ramifications. Due to the lack of depth in the Eastern Conference of the NBA, if the Mavericks end up with a pick in next year’s draft that is 21^st or later, their first round pick will automatically go to the Oklahoma City Thunder (due to the Lamar Odom trade and funneled through the Rockets). If the Suns make the playoffs, they will most likely get the 20^th or so pick in next year’s draft and if they fail to make the playoffs, the team would have the 14^th pick in next year’s draft. Regardless of their possible draft positions and ticket revenues, the respective cities that these teams play in will also have a chance to benefit in a long playoff run.

Economists are often skeptical when it comes to the ‘true’ profits to the cities hosting the ‘big games’ stating that people are “redirecting” the expendable money that they would have already spent during this time; however, that same theory cannot be applied to a city that has two teams playing in the playoffs at the same time, as the economic impacts are doubled in this case along with the extended exposure to their respective cities. In Dallas and Phoenix, as their two teams vie for a final playoff spot, the money that is being thrown around may not be new money, but the local governments will still end up turning a profit thanks to these teams. In the 2012 NFL season, Maryland saw two teams- the Redskins and Ravens- make the playoffs and due to the local taxes attached to ticket sales, saw a combined economic impact of roughly $20-$40 million in revenue. The playoff atmosphere brings another new economic boost that some economists do not take into account. Fans of these teams will end up spending more than what economists anticipate during the regular season in order to commemorate their experiences. Along with that added boost in spending and tax revenue brought in through ticket pricing, tourism and exposure to the city will also boost their local economies… even if it is not by much.

When it comes to local businesses, the “redirecting” of this money previously mentioned can often help or hurt businesses. If there is a local business that is near the main arena, the playoff games along with the atmosphere may have a tremendous impact on profits. In a recent interview with Bethany Walters, the Marketing/Promotions Manager for Copper Blues located in downtown Phoenix (around the corner from the US Airways Center where the Phoenix Suns play their home games), she stated that when teams like the Phoenix Suns make the playoffs that it excites people, resulting in a “party”-type atmosphere. “People tend to bring bigger groups of people and more of their friends. They tend to drink more before (and after) the games and have higher tabs and are spending more money than they normally would,” said Ms. Walters who also conveyed that when teams are playing in the playoffs, it makes every night they play at Copper Blues a “Friday night.” When answering the question on what the biggest difference Copper Blues see’s when a team like the Suns make the playoffs, Ms. Walters stated that, “(We) don’t tend to see the same amount of bodies.” She mentions that it “drives people from the surrounding areas” citing that “(we) see people from Mesa, Tempe, Chandler, and from Gilbert that wouldn’t normally hang out (in downtown Phoenix) otherwise.”

However, in other spots of the town, having two teams in the playoffs at the same time can also be hurtful. In 2009-2010, Phoenix saw the Suns and the Coyotes both make the playoffs- the Suns made it all the way to the Conference Finals and the Coyotes lost in the Quarterfinals. When speaking to Daniel Daines, General Manager of Ajo Al’s Mexican Café (a family-owned restaurant located in central Phoenix, just outside of the downtown area), he stated that the last time the Suns and Coyotes made the playoffs at the same time in April-May of 2010, the restaurant “took a big hit financially.” Mr. Daines also detailed that the normal traffic they would have seen at that time would be “going to the games, or watching the games at a sports bar, or just simply ordering more take-out.”

Whether the economic impacts are negative or positive on a city that has two teams in a playoff run, the pride it brings to a community can still be overwhelming. As the Dallas Mavericks and Phoenix Suns fight for the final playoff spot in the NBA and the Dallas Stars and Phoenix Coyotes fight for the same spot in the NHL playoffs, the possibility of having one city make the playoffs in both leagues as they force another city to sit and watch from the sidelines is something of a phenomenon and a sight to behold. So keep looking up at the scoreboard Dallas and Phoenix fans, because if one of these cities prevails over the other, look for a possible heated rivalry to ensue for the players, fans and even citizens of these teams and cities alike for years to come.

Commentary by Ryne Vyles

Sources:
Forbes
USA Today
Dallas News
Baltimore Sun
Interviews