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Ontario Hockey League

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Read case Ontario Hockey League and doing the case situation analysis only foucs on Competition and Customer. Word document Situation Analysis Competition and Consumer is teach you how to write analysis.


Ian Meagher wrote this case under the supervision of Professor Ma tthew Thomson solely to provide material for class discussion.
The authors do not intend to illustrate either effective or i neffective handling of a managerial situation. The authors may have
disguised certain names and ot her identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under  authorization by any reproduction rights
organization. To order copies or request per mission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t)  519.661.3208; (e) [email protected]; www.iveycases.com.

Copyright © 2013, Richard Ivey  School of Business Foundation  Version: 2013-09-10

It was late May 2010 and another su ccessful season for the Ontario Ho ckey League (OHL) had come to a
close, with the Windsor Spitfires winning their second consecutive Memorial Cup.
Generally, the league
was performing well from both a business and hockey  standpoint. Although great strides had been made in
recent years to grow the OHL brand in  Ontario, there was a lot of work to be done this off-season. League-wide attendance figures had remained fairly consistent with last year’s numbers: year after year, there were
mostly consistent but a few inconsistent teams. Along with these trends came the struggle for certain OHL
franchises to remain profitable.

One of the organization’s interns, Mark Wallace, was asked to prepare a report and the preliminary
information it contained could prove  to be valuable if analyzed appropriately. How exactly could this
information be used to help some of the st ruggling teams with their attendance figures?

Wallace’s job was to develop a more comprehens ive report by the end of the week, along with
recommendations on how to improve attendance in struggling markets. Under no circumstance could any
recommendation try to help a struggling franchise at the expense of a more successful and stable team.


In 1893, junior hockey was first played in the provi nce of Ontario under the jurisdiction of the Ontario
Hockey Association (OHA).
In 1974, the OHL became independent from the OHA and emerged as the
highest level of junior hockey in the province. As  of 2009/10, the OHL fell under the umbrella of the
Canadian Hockey League (CHL),
which included 59 member teams located across Canada and parts of
the United States (Exhibit 1). Every year since 1919, the CHL crowned a Memorial Cup champion.

This case has been written on the basis of published sources only.  Consequently, the interpretation and perspectives
presented in this case are not necessarily those of the Ontario Hockey League or any of its employees or members.
The Memorial Cup is awarded to the C anadian national junior hockey champion. It is a tournament format with a host
team, and one team from the Ontario Hockey League, the Q uebec Major Junior Hockey League and the Western Hockey
http://ontariohockeyleague.com/ page/ohl-media-information-guide, accessed September 3, 2013.
www.chl.ca accessed September 3, 2013.
http://ontariohockeyleague.com/page/ohl-media-i nformation-guide accessed September 3, 2013.
For use only in the course Marketing Management (BCOMM) at Saint Mary’s University taught by Gordon Fullerton from September 03, 2014 to December 25, 2014.
Use outside these parameters is a copyright violation.
Page 2  9B13A028

Quebec Major Junior Hockey League (QMJHL)
and Western Hockey League (WHL)
were the other two
leagues under CHL jurisdiction that competed  with the OHL for the coveted trophy.

In 2009/10, the OHL had 20 member franchises, three  located in the eastern  United States (two in
Michigan, one in Pennsylvania),
and the other 17 scattered across th e province of Ontario. The business
operated as a franchise model in which each team was privately owned and independently operated.

David Branch became the fourth commissioner of the OHL on September 15, 1979.
He had an array of
experience within junior hockey since graduating from  the University of Amherst, Massachusetts; he had
been a member of his university’s hockey team and was passionate about hockey  in general. Along with
being the commissioner of the OHL, he had also served as president of the CHL since 1996.
He was
highly regarded within the Cana dian junior hockey community.


Since its inception, the OHL had been among the top leagues in the world for developing professional
hockey players. The league’s success had continued to  improve in recent years. Based on previous reports,
Branch knew that 30 per cent of the active players in the National Hockey League (NHL)
graduated from
the OHL.
Between 2006 and 2009, the OHL had a total of  29 players drafted in the first round of the
NHL draft. The highlight of those years was in 2008, when 11 OHL prospects were drafted in the first
round, including seven in the top 10.

A 2002 study conducted by long-time  minor and junior hockey employee Jim Parcels revealed the
difficulty of making a career as an NHL hockey player
. In short, it was tremendously difficult to become
a professional hockey player and even harder to earn a spot in the NHL. The study revealed that of the
22,000 active hockey players in Ontario born in 1975, 232  were drafted to the OHL (1.05 per cent) and 41
played NCAA Division I College Hockey
(0.018 per cent). Of these 273 players, 48 of them were drafted
to the NHL (0.02 per cent).
Even for the very skilled players who  played in the OHL, it was still rare and
difficult to jump to the NHL.


Ontario Minor Hockey Trends

Branch and his staff had always prided themselves on having a good understanding of the impact in terms
of both attendance and quality of players on the OHL of minor hockey trends. But, due in part to injury
concerns and increasing costs, participation rates in  minor hockey had been experiencing a consistent slide

The QMJHL has teams from Quebec, New Brunswi ck, Nova Scotia and Prince Edward Island.
The WHL has teams from British Columb ia, Saskatchewan, Alberta and Manitoba.
For the purposes of this case, t he three American teams are ignored.
http://ontariohockeyleague.co m/page/ohl-media-information-guide accessed September 3, 2013.
http://thepipelineshow.blogspot.ca/2011/08/does-david-branch-wear-too-many-hats.html ,accessed September 3, 2013
The National Hockey League is the highest leve l of professional hockey in the world.
http://ontariohockeyleague.com/ page/ohl-media-information-guide, p.  178, accessed September 3, 2013.
Jim Parcels, “Chances of Making It in Pro Hockey”,  www.omha.net, April 2002, accessed September 3, 2013
Division I NCAA Hockey was another common route for minor hockey players trying to carve a path to the NHL
Jim Parcels, “Chances of Making It in Pro Hockey”,  www.omha.net, April 2002, accessed September. 3, 2013
For use only in the course Marketing Management (BCOMM) at Saint Mary’s University taught by Gordon Fullerton from September 03, 2014 to December 25, 2014.
Use outside these parameters is a copyright violation.
Page 3  9B13A028

for years.
Given the drop in general interest in hockey among Ontario’s youth,  this trend was destined to
negatively impact the OHL in the future. If it continued, the OHL would need to plan for drops in both
attendance and quality of play.

Competition Analysis

The economic recession of 2008/09 hindered discretionary spending  nationwide. Competition for
consumers’ entertainment dollars was fierce in 2009/10, more so than in pre-recessionary years. OHL
teams not only competed against other sports franchises, they also competed against other entertainment
options such as theatres and restaurants.

From the OHL’s perspective, direct competition could be separated into two categories: other hockey
leagues and other sporting leagues. Two other hockey leagues posed potential threats to OHL attendance:
the NHL and the American Hockey League (AHL).
The OHL’s major advantage over most NHL teams
was the fact that their ticket prices were at least 50 per cent cheaper. However, it was much harder for the
OHL to differentiate from the AHL on price. The only major difference between the two was that the AHL
was a professional league, whereas the OHL was considered amateur hockey. While one might assume
fans would prefer to watch a prof essional hockey team over an amateur  team, many OHL fans enjoyed the
spectacle of watching the development of future stars.

There were four non-hockey professional leagues that competed with the OHL, NHL and AHL for fans:
the National Basketball Association (NBA), the Nati onal Lacrosse League (NLL),  the Canadian Football
League (CFL) and Major League Baseball (MLB). For the most part, tickets in these leagues were more
expensive than OHL tickets, though low-end prices in each league were somewhat comparable (Exhibit 2).
This made it difficult for the OHL to compete on price, even if the average ticket price for these other
leagues was much higher.

For the most part, OHL franchises were located in smaller towns across Ontario with a few teams located
in larger metropolitan areas such as Mississauga , Brampton and Ottawa. Indeed, it was likely that
individual franchises were impact ed by nearby sports options. Given the increase in demand for
discretionary spending dollars, relative  location might be a key advantage.


A significant strong point for the entire CHL was its  exclusive partnership, established in 1998, with
Rogers, a national media company that included sports broadcasting.
The network held the exclusive
rights to the annual Memorial Cup tournament. There we re rumours that Rogers  was planning to broadcast
a junior hockey game every Friday night over the c ourse of a season. The deal was not finalized, but
Branch anticipated it would be within two years.

In terms of a long-term plan for the league, Branch  knew there were a number  of factors that could
potentially contribute to the attendance problems in certain markets. Perhaps there were simply too many

Emile Therien, “The Future Looks Bleak for Canadian Minor Hockey”, Jan. 4, 2012, www.thestar.com, accessed
September 3, 2013.  This decline was being experienced both within Ontario and across Canada.
The AHL acts as a feeder system for the NHL; the natural progr ession would be to go from the OHL to the AHL, then on to
the NHL. To play in the AHL, a player must be 20 years old or older.
http://www.chl.ca/article/watch-friday-night-hockey-on-sportsnet-sarnia-at-london, accessed September 3, 2013.
For use only in the course Marketing Management (BCOMM) at Saint Mary’s University taught by Gordon Fullerton from September 03, 2014 to December 25, 2014.
Use outside these parameters is a copyright violation.
Page 4  9B13A028

teams and not enough fans to  support all 20 OHL franchises. Cutting te ams, though, was not a viable short-term solution to fixing the league’s attendance woes.  Perhaps the OHL needed to relocate some of the
struggling franchises to more remote parts of the province where there would be less competition. This
might provide these franchises with a more loyal and consistent fan base. Howe ver, most franchises had
long-term building leases in their cu rrent locations that they would not be able to break, and many owners
would be unwilling to move, meaning new owners would have to be found.


When Wallace created the data set in the initial report, he had explained some of the possible relationships
within the data. In other words, he had some working theories about how the data might predict or explain
the league’s attendance figures (see data file, Ivey product #7B13A028). Some of his thoughts appear

Hockey Related Variables

Looking at the percentage of players drafted to the  NHL from each franchise, Wallace was fairly certain
that this variable would have a pos itive relationship with attendance figur es in a given market. He assumed
that the more players a particular team had drafted to  the NHL, the higher the quality of play on that OHL
team. Wallace felt strongly that the same would hold true about the number of points a team collected over
the course of a season; more points meant more wins, thus higher quality play in that market.

Given his understanding of the competitive landscape, Wallace recognized that the average ticket price
variable was likely negatively correlated to attendance:  the higher the ticket price, the lower the attendance
in a given market. He was unsure of the impact that price had in market s that were consistently sold out
(e.g., Kitchener, Niagara, London). Was it possible that  raising the ticket price  could result in decreased
demand for tickets? What was an appropriate price th reshold in markets that sold out on a regular basis?
On the other hand, were higher ticket prices merely a reflection of a higher qualit y hockey product? It was
something he’d have to look at.

He also thought that average ticket price was probably related to how long a team  had been in a particular
city. His rationale was that if a team had been in a market long enough, they would likely have a strong fan
base willing to pay for hockey. If this was true, it could mean it would be easier to raise prices in certain
markets. However, he was not fully convinced that this was the case since  certain markets such as
Kingston had been in place since 1974/75 yet were operating below 60 per cent of arena capacity. Raising
prices risked the additional proposition that OHL fans  would switch to watching another sport, going to an
NHL game if close enough, or worse ye t, just staying home. Raising prices  might help revenue in one way,
but it might also mean fewer people in seats watching games, which was exactly what he was trying to

Wallace was unsure what to make of the building capacity variable. It could be that larger capacity
buildings would be more profitable given that they  could hold more fans. But he knew this was not
necessarily the case based on the data in markets  such as Mississauga and  Brampton. Were certain
buildings simply too large? Could too many empty seats in an arena have a negative impact on the fan

For use only in the course Marketing Management (BCOMM) at Saint Mary’s University taught by Gordon Fullerton from September 03, 2014 to December 25, 2014.
Use outside these parameters is a copyright violation.
Page 5  9B13A028

Finally, Wallace suspected that proximity to NHL fran chises would have a negative correlation with OHL
attendance. Thus, the closer an OHL team was to an  NHL franchise, the lower its attendance figures would
be. This was a competitive argument, though he had hear d it suggested that OHL and NHL fans were quite
different segments. He wasn’t sure; he’d recently h eard one team manager argue that ardent hockey fans
were just looking for a good game to watch, that more was better and that they didn’t care if the players
were associated with the OHL or the NHL. There was a lot to consider.

Market Specific Variables

Wallace was also intrigued by the impact of market  variables, such as local median household income. He
was fairly confident that with higher income came more discretionary buying po wer, making attendance at
OHL games more likely. On the other hand, it could be that with higher incomes, fans might switch from
the OHL “value” product to more expensive options  such as the NHL or other sports products.

Wallace also knew that he could not look at median household income without relating it to the local
market average house price, which was really a measure of cost of living. If household income was high
but housing prices were proportionately higher, for example, then fans  might not have gr eater discretionary
spending after all. Wallace thought th at these two variables might also  be correlated to the local market
growth rate figure. His rationale was that if a city  were thriving, people would be more inclined to
immigrate there, driving up population growth. He cont emplated again whether this increase in population
would drive OHL attendance in a particular market, or was it more likely that people would look to other
forms of entertainment?

Wallace did not have much of an understanding of the impact of  immigration and other demographic
variables on attendance, but he thought they were worth  considering. He had three variables that reflected
the percentage of the local market that had immigrated  to Canada at any time, that had immigrated more
recently (2001-2006) and that was a visible minority. He thought that the percentage of the local market
who had immigrated to Canada at some point would  be negatively correlated to  attendance since it was
unlikely that recent immigrants to Canada would  have the same exposure to  and love of hockey as
Canadian-born fans.

He was less certain of what to make of the visible minority data, since it include d people born in and out of
Canada. In other words, there were plenty of visible minorities born in Canada who were hockey fans, and
many immigrants were hockey fans and also visible minorities. His initial instinct was that the percentage
of visible minorities would be  negatively related to attendance, but he had to think about how to handle this
variable more carefully.

Wallace had to complete his analysis by Friday. He was trying to make a lasting impression before his
contract expired in September. Th is was a tremendous opportunity for hi m to make a name for himself in
the industry at an early age.
For use only in the course Marketing Management (BCOMM) at Saint Mary’s University taught by Gordon Fullerton from September 03, 2014 to December 25, 2014.
Use outside these parameters is a copyright violation.
Page 6  9B13A028


Western Hockey League (WHL)
Brandon Wheat Kings      Calgary Hitmen
Edmonton Oil Kings      Everett Silvertips
Kamloops Blazers   Kelowna Rockets
Kootenay Ice    Lethbridge Hurricanes
Medicine Hat Tigers      Moose Jaw Warriors
Portland Winter Hawks   Prince Albert Raiders
Prince George Cougars     Red Deer Rebels
Regina Pats    Saskatoon Blades
Seattle Thunderbirds   Spokane Chiefs
Swift Current Broncos   Tri-City Americans
Vancouver Giants   Victoria Royals

Quebec Major Junior Hockey League (QMJHL)
Acadie-Bathurst Titans   Baie-Comeau Drakkar
Drummondville Voltigeurs     Cape Breton Screaming Eagles
Chicoutimi Sagueneens     Gatineau Olympiques
Halifax Mooseheads   Quebec Ramparts
Blainville-Boisbriand    Moncton Wildcats
Rimouski Oceanic       Rouyn-Noranda Huskies
P.E.I. Rocket    Victoriaville Tigres
Val-d’Or Foreurs      Saint John Sea Dogs
Shawinigan Cataractes

Ontario Hockey League (OHL)
Barrie Colts    Belleville Bulls
Brampton Battalion       Erie Otters
Guelph Storm    Kingston Frontenacs
Kitchener Rangers       London Knights
Mississauga St. Michael’s Majors  Niagara Ice Dogs
Oshawa Generals   Ottawa 67’s
Owen Sound Attack   Peterborough Petes
Plymouth Whalers   Saginaw Spirit
Sarnia Sting         Sault Ste. Marie Greyhounds
Sudbury Wolves   Windsor Spitfires

Source: www.chl.ca; www.whl.ca; www.theqmjhl.ca; www.ontariohockeyleague.com, accessed September 3, 2013.

For use only in the course Marketing Management (BCOMM) at Saint Mary’s University taught by Gordon Fullerton from September 03, 2014 to December 25, 2014.
Use outside these parameters is a copyright violation.
Page 7  9B13A028


Hockey Competitor Prices

** Sample includes NHL: Buffalo, Detroi t, Ottawa, Toronto; AHL: Grand Rapids, Hamilton, Lake Erie, Rochester, Toronto.

Source:  www.nhl.com; www.theahl.com.

Non-Hockey Competitor Prices

League  Low End Price  High End Price
NBA $12.50 $200
NLL $15  $70
CFL $20  $75
MLB $15  $200

** Sample includes NBA: Toronto; NLL: Buffalo, Rochester,  Toronto; CFL: Hamilton, Toronto; MLB: Detroit, Toronto.

Source: www.nba.com; www.nll.com; www.cfl.c a; www.mlb.com accessed September 3, 2013.

League  Low End Price  High End Price
NHL $25  $450
AHL $10  $45
For use only in the course Marketing Management (BCOMM) at Saint Mary’s University taught by Gordon Fullerton from September 03, 2014 to December 25, 2014.
Use outside these parameters is a copyright violation.


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