As a consulting group that specializes in advising sport organizations on strategic and financial matters, your services have been in high demand. Most recently, you have been tasked with adding a new NHL franchise to one of the following four potential markets: San Diego, Portland, Salt Lake City, and Houston.
1. Conduct a market demand analysis for each of the four cities above. You will need to tell what comparable cities and multiplier you used and why. Show your calculations. Pick your favorite
city and explain why it’s a superior choice.
2. Assume you will build a new arena in your chosen location. For the sake of the argument, you won’t be able to share an existing arena. The owners want a dedicate hockey facility:
a. Where exactly in your city will the facility be located? Provide a real location using screenshots of Google Maps or similar.
b. How much will it cost?
c. How will you pay for it? Assume you will need at least 40% paid for by the public and that no individual public funding source can account for more than 10% of the overall cost of the project. Discuss advantages and disadvantages of each funding source of
your choice.
3. Provide three budgets for the first season:
a. Best-case scenario, average-case scenario, worst-case scenario. Remember that budgets list both revenues and expenses.
b. Walk me through your thought process in coming up with the numbers for each scenario. Explain choices like attendance numbers, ticket and concession prices, naming rights deals, merchandise sales, or sponsorship revenue, to name but a few of the things
you’ll need to list.
c. How do you project revenues and expenses to evolve over the next ten years?
4. How will you market and promote the team during the first season? Outline some basic ideas.
