The NHL’s Growth Problem (How I Learned to Stop Worrying and Love the Non-Traditional Market Pt 3)

It’s time for my last segment on marketing & the NHL, and much like part 2, this article is about a particularly poorly served demographic – the US’s growing Latinx population. A quick note on terminology here: I have chosen to use Latinx here instead of Latin@ for readability reasons (and because it is gender neutral). I’ve chosen this term over ‘hispanic’ in most cases, as hispanic also includes Spaniards, who are very much not the population I’m speaking of here. Also, there are arguments that the use of Hispanic was begun as an effort to differentiate Spanish speakers from white people (ie a racist history), not as a term of self-identification.

Off the bat, I want to make one thing very clear; I’m white. In the census boxes, I tick “white, non-hispanic.” I’m pretty much the whitest person you can meet, other than one of those like, creepy Children of the Corn kids.

That said, the point of this article is to focus on why this population is so important for the NHL to court, versus how they should be courted, as there is a lot of cultural nuance that I am not privy to. Most suggestions I will make come from data or learnings from other people or companies, most of which are Latinx owned.

While this article does stand alone, it is probably helpful to read through Part 1: Player Marketing and Part 2: Marketing to Women first.

Part 3: Speaking French is Romantic, but Speaking Spanish is Lucrative

(Speaking Spanish is also sexy, as Antonio Banderas and Salma Hayek would like to remind us).

It should be no secret to anyone with eyes that the Latinx population in the United States is growing. Immigration has been a key topic in the last few elections, and is likely to be one again in 2016. There are now more Spanish speakers in the US than there are in Spain. While this growth has been explosive in America, in Canada, Latin Americans remain one of the lowest percent of population demographics, at just 1.2% compared to the US’s 16.4%. Perhaps this is why this market has been largely ignored by the NHL.

However, with three teams in California (38.2% self-identified Latinx population), a team in Texas (also 38.2% Latinx), a team in Arizona (30.2%), two teams in Florida (23.2% and growing by 57% over the last ten years), a team in Colorado (21%, 41% growth) and now possible expansion into Nevada (27.3%, with 82% growth) to ignore this market means these teams will likely be financially insolvent – if not now, well within the next ten years. And it’s important to point out that’s potentially nine total teams to Canada’s current seven.

And this market IS ignored. In 2013, Sports Media Watch did a study of the demographics of sports viewership for the respective finals of the “Big 4” sports. While the NBA Finals was the only event to crack 15%+ for Latinx viewership, the Stanley Cup Final was by far the lowest, with only 2-6% of viewers identifying as Latinx. Going with the more generous 6% figure, we can use our data from the “fan cost index” to estimate how much money is made off this population per NHL Game.

Average Attendance in 14/15: 17,373
6% Latinx Population:  1042
Avg Fan Cost per person: $343/4 = $85.75
Revenue from Latinx Population: 1042 x $85.75 = $89,383.23

Comparatively, that’s a really small number. Why should the NHL care, when this population is barely clearing $89k per game?

Because courting the Latinx market is not about shifting their share of the revenue pie, though that may happen naturally, the end goal is to create a bigger pie.

Think of it this way – as the population in the United States grows, the rate of Latino population growth is eclipsing all other racial identities. This means that even though your total population of the NHL target market, white people, is still growing, the incremental revenues from that market will stagnate.

Again, some math. For ease of illustration, we’re going to simplify the numbers and start with a base population of 1000 people, 50% of which are NHL fans, while keeping the percentages true to life* for Latinx demographics.

Year 1: 1000 people
Latinx Population Yr1 at 16%: 160 people
Total Hockey Fans: 500 people
Latinx Hockey Fans (at 6%): 30 people
Percent of Latinx Population as Fans:  18.75%

Now, let’s apply a 10% overall growth factor to the population, again, keeping demographic rates the same. The Latinx growth over the last ten years has averaged to 42%.

Year 10: 1000 x 10% = 1100 people
Latinx Population: 160 x 142% = 227 people

This means that of the 100 people our population added, 67 were Latinx. Now, this is where the math gets funky because you can’t assume a straight 50% of people are NHL fans anymore, not when you only added 33 people in the target demographic and have not invested time or money in changing that target.

Year 1 NHL Fans: 500
New Target Fans: 33 x 50% = 17
New Latinx Fans: 67 x 18.75% = 13
Total Hockey Fans: 500 + 17 + 13 = 530
Expected Growth of Hockey Fans: 500 x 110% = 550
Total Revenue: 530 x $85.75 = $46,507.50
Expected Revenue: 550 x $85.75 = $48,262.5
Revenue Lost: 4%

This shows the rate of growth of hockey fans to be slower specifically because they’re not capitalizing on the growth rate of the Latinx population. But obviously, there are more than 1000 people in the USA, so what does this mean in revenue terms? Well, let’s use the current 17,000 figure of total NHL attendance along with the simple Fan Cost Index we’ve been using.

Current Revenues: 17,000 x $85.75 = $1,457,750
Revenue Lost: $1,457,750 x 4% = $58,310
Revenue Lost Over 41 Home Games: $2,390,710

And because Fan Cost Index is a very simplified measure, this number is artificially deflated. The 17,000 attendance figure also doesn’t take into account the teams who have the largest population of potential Latinx fans. Going by the teams in states with high percentages of Latinx populations I listed earlier, their average attendance last year was only 16,190, with only the LA Kings reaching 100% of stadium capacity (though Tampa Bay and Anaheim were both at 98%).

So, what can be done about it? Many teams, like the Rockford Icehogs, have made ham-handed attempts at having “heritage” nights which often come off as, well, just plain racist. While the idea behind the event, much like Hockey & Heels nights, attempts to bring inclusivity to a predominantly white sport, the execution usually is fueled by lazy stereotypes.

But what can they do? Well, despite the marketing of the event, there were a couple major things the Icehogs did right. First, they invited a local Latino band to play during warm ups, and then had all announcements read in both Spanish and English during the game. They also auctioned the horrible jerseys to benefit a local charity working within Rockford’s Hispanic community.

Much like with women, any attempts to market to a demographic that is not represented by players have to come from a place of sincerity, not lip-service. And with only five players of Latinx descent currently playing in the NHL**, it’s easy to see why diversity in the NHL fanbase is treated as an afterthought. As Mario Flores of the sports marketing agency Sportivo is quick to point out, Latinxs can’t be treated as one homogenous group.

One of the biggest misconceptions is that the Latino sports fan is one autonomous group. There are many factors that need to be considered including levels of acculturation, language preference, place of birth and current residence. All of these will impact their sports preferences.

But he does note that speaking Spanish, though there are several dialects in play, is extremely important in creating a connection with the Latinx audience. The Florida Panthers have toyed with a Spanish broadcast off and on throughout the years, eventually committing to broadcasting 7 home games in the 14/15 season en español. These broadcasts were so successful that there are reports the Panthers will be doing all 41 home games in Spanish in addition to their regular radio broadcasts, though I have not yet found an official press release stating this.

Spanish language broadcasts are probably one of the most valuable tools the NHL could use to build a Latinx fanbase. As of 2010, 63.8% of the population of Miami-Dade County spoke only Spanish at home. Imagine trying to build a youth hockey program with parents who aren’t able to follow the games. Do you see it being successful? How are you going to advertise the speed and thrill of a game over the radio or on TV if 64% of the population isn’t even listening?

Latinx consumers also tend to spend more time on their mobile devices than other populations, so having an engaging and bilingual online presence on twitter, snapchat, facebook, and mobile web versions (or apps) for these sites is also important. While the Panthers get full marks for having Spanish broadcasts, their website urges users to download chrome to use its translation properties rather than offering up news or press releases in Spanish. Also the little bilingual content they do have is shamefully showcased, letting Spanish-first fans just how much of an afterthought they are.

Last, one of the fastest growing populations in the US economy is Latinx business owners. Latinx-owned businesses are popping up at twice the national rate. Especially for teams fighting for their financial survival like the Panthers and Coyotes, catering to these new business owners will pay off in the long run, as often these business owners hold positions of thought influence within their local Latinx communities.

Other sports have already sat up and started taking notice of this important trend. Sean Flynn, Senior VP of the Miami Marlins Marketing department says that 50% of his creative budget is spent on Latinx specific marketing. Is the NHL seeing something unsustainable that the MLB is not? Possible, but the more likely scenario is that the NHL has not yet decided to make the investment in the Latinx market because it has simply never occurred to the overwhelmingly white front offices that there is untapped potential in looking outside of their own experiences. If they don’t course correct, and soon, it will cost them millions of dollars in revenue and thousands of new fans along the way.

*All percents and growth rates for Latinx populations come directly from wikipedia. Note the ten year rate for the US overall is actually closer to 7.1%, which makes this revenue loss effect even more pronounced.

** From this list, which is a little out dated, and adding Matt Nieto, who is Mexican-American. There are more and more Latinx players these days, such as Blackhawks prospect Vincent Hinostroza, so hopefully this number will grow significantly in the coming years.

Super big thank you to @Sara_LNR for taking a look over this for me to make sure I treated this with respect. You’re the best!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s