Money On Ice: Hockey Teams Bring Big City Benefits

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Vaasa Sport's Captain Markus Kankaanperä / Credit: @vaasansport Instagram

Finland is a hockey mad nation, with clubs in cities up and down the country.

But did you ever wonder how much money your local team brings to the community?

A new study from Jyväskylä University of Applied Sciences JAMK shows that even the smaller clubs at the top level of Finnish ice hockey’s Liiga can be a cash cow for the city where they’re based.

In 2015 researchers found that Jyväskylä’s Liiga club JYP brought in €6m. While in  Hämeenlinna, HPK brought in some €5m during the same year.

The studies are unusual because they treat the sports teams as businesses to measure their wider economic impact; whereas traditionally, similar studies would look at a specific event in a city, like a World Championship, to measure its impact for legacy planning, explains Risto Rasku, Senior Researcher at JAMK’s Sport Business School Finland.

Vaasa Sport players on the ice / Credit: @vaasansport Instagram

Vaasa Sport

The newest study, published this week, shows that Vaasa Sport brings in around €4m to the city of Vaasa each year.

“This is the 3rd ice hockey team in Finland we studied, so we are well aware of expectations in terms of cash flow” says Rasku.

Vaasa is the 15th largest city in Finland, with a population of 67,000 people.

So what generates the money? It’s everything from salaries to taxes; hot dog sales and hotel nights.

“It’s based on cash flow and spending” says Tomas Kurtén, Vaasa Sport’s Managing Director.

“One source of cash flow is obviously the salaries. We pay around 50 persons including players and their net salary is one portion of the impact, because when you get a salary, you spend at least some part of the money locally. And that is roughly €1.6m” he says.

With the salaries come taxes that are paid to Vaasa city, and the club pays around €700,000 to the city when it uses the arena for Liiga games, or other sports venues in the area for training.

Vaasa Sport also buys roughly €1.7m worth of services and products from local partners – this could be bus hire to travel to games, or the cost of cleaning the kit or buying equipment in local shops for example.

Then there’s value added tax and insurance payments, plus the club’s normal business tax bill which goes to the state – approximately €2m per year – and while that doesn’t impact the Vaasa region directly, it highlights the sort of money stream associated with a club of this size.

How Is It Calculated?

The new JAMK study looked first at the official financial records of Vaasa Sport to get the black and white details of income and expenditure.

But researchers also talked to 400 fans at Vaasa games to understand more about their spending patterns. If fans travel from other parts of Finland they might stay a night in a hotel, eat at a local restaurant or buy a beer.

“Based on those interviews and our spectator average last year, they counted how much extra cash flow does this hockey event bring to the region, and it’s €400,000” says Tomas Kurtén.

Sam Povorozniouk at work / Credit; @vaasansport Instagram

Club & The Community

Of course without an active fan base, there wouldn’t be much cash flow.

True fans stick by the club – and spend money – through thick and thin.

“I think people really love hockey in Finland in general, and in Vaasa people definitely support it” says Vaasa Sport forward Sam Povorozniouk, who joined the team at the start of the season from the now-defunct Elmira Jackals in New York.

“The fans, that was something different for me. The fan base here are very loud and very spirited. Even when you’re in town, a lot of people recognize you, they tell you good luck, looking forward to the game, small talk. And that’s always nice. They’re very proud of their hockey team here, and they support us a lot” says the Illinois native, one of two Americans on the team, along with Michael Parks.

The team attracts an average crowd of 3200 people to their home games.

Success = More Economic Impact?

Vaasa Sport are currently sitting 11th out of 15 teams in Liiga after 15 games played. Last year, they ended the regular season second last. But since Liiga is a ‘closed’ system, there’s no relegation, which would be a disaster for the club’s finances, estimates Managing Director Tomas Kurtén.

“I would say we would probably generate max 20% of the amount” if we were relegated, says Kurtén.

“The second level league in Finland it used to be semi-pro, but since a few years back, the kind of concept and profile of the second league has changed. It’s more an amateur league” he explains.

JAMK researcher Risto Rasku hedges his bets when it comes to predictions, but reckons on balance, if a team became more successful, it would generate more money for the local economy.

That cash could come from increased spectator numbers buying more hot dogs and beer at the games; higher salaries for players who then spend it; more tax money; or the club buying more services from local businesses if they reach the playoffs, and play more revenue-generating games.

“Basically it is possible, or very likely, when the turnover increases then the economic impact increases” for Vaasa, says Rasku.

Vaasan Sportäs other American player Michael Parks celebrating a goal / Credit: @vaasansport Instagram