The Toronto Maple Leafs are in position to capture more new fans than any other Canadian NHL team.
This also means the owner, Maple Leaf Sports and Entertainment Ltd., is in position to reap a mountain of cash from various streams of revenue connected to the club.
That sounds strange considering the Air Canada Centre has been oversold for almost every game the Leafs have played there since it opened in February, 1999. And, the Leafs get a million-plus television viewers for every game.
But surveys by Toronto consumer-research company Charlton Insights over the 2016-17 NHL season found the Leafs are the favourite team of just 60 per cent of people who consider themselves sports fans in the Greater Toronto Area.
Charlton surveyed 3,500 people across Canada between the ages of 12 and 70 and screened them for an interest in sports. Only those who had watched sports or had read about sports online or in print in the previous 30 days were surveyed. According to Gord Hendren, the founder and president of Charlton, this group makes up 72 per cent of the population.
The group was tracked monthly and by April, 2017, the Leafs finished fifth among the seven Canadian NHL teams in what Hendren calls a share of heart, as in the hearts and minds of the fans. First among the NHL teams were the Montreal Canadiens, who had 75 per cent of the fans in their market pick them as their favourite team. The Edmonton Oilers were second at 73 per cent, followed by the Winnipeg Jets and Vancouver Canucks (64 per cent each). After the Leafs at 60 per cent, the Calgary Flames and Ottawa Senators brought up the rear with 59 per cent each.
"They have not been successful over time," Hendren said in explaining why 40 per cent of the GTA's sports fans do not consider the Leafs their favourite team. "They have not made young fans and have not created a compelling reason for young fans to be Leaf fans.
"So they are underdeveloped. That's really the bottom line."
Aside from the Leafs' long-running mediocrity, which appears to be over, they also face a lot of competition in the GTA for the hearts and dollars of the fans.
"The landscape is different," said Brian Cooper, president and chief executive of MKTG Canada, a marketing company that handles corporate sponsorships among other initiatives. "We've had the Blue Jays since the late eighties, early nineties [as playoff contenders] but now we have the Raptors, the Jays again, we have TFC. The Argos have always been there but they get relegated as time goes on, and now there's a rugby team.
"There's also Broadway shows, so we have a lot of choices to become passionate about."
In the past 12 years, the Leafs made the playoffs twice and lost in the first round both times. However, both Hendren and Cooper say the new, young and exciting version of the Maple Leafs, which made the playoffs last spring and gave the first-place Washington Capitals all they could handle, are in position to drive a great deal of revenue for MLSE and companies associated with it.
The Leafs built on last season's success by exploding out of the gate this season, led by budding superstar Auston Matthews.
Another interesting note about the Leafs' upside is that they can do it on a national level as well. Toronto may be the city Canadians in other parts of the country love to hate, but not so much when it comes to the Leafs. Charlton's survey found the Leafs were tied with the Canadiens as the favourite team of people across the country at 42 per cent each, almost double the third-place Canucks at 23 per cent.
Given the slow start by the Canadiens this season, the Leafs have a chance to build on their national popularity if they can sustain their success, their recent three losses in a row not withstanding.
The reason the Leafs are in position to attract more new fans than any other Canadian NHL team is simply because they are in the largest market in Canada. There are 5.9 million people in the GTA and Hendren says if the Leafs can raise their favourite-team standing by 15 per cent to 75, that represents 889,000 new fans.
Those new fans will mean more money from merchandise sales, corporate sponsorships and television and digital ratings.
"People say, 'Gee, they sell out the building,'" Hendren said. "Well, the building is only one part. There's the media rights and the sponsorship rights that are all on the table."
The media rights mostly concern the Leafs' regional broadcast rights but they are shared by Sportsnet and TSN, which are owned by Rogers Communications Inc., and BCE Inc., respectively. However, Rogers and BCE are also the majority owners of MLSE and any increase in television and digital ratings means more advertising revenue for both of them.
Cooper said the price of the advertising spots "will go up as a result of more viewers in that marketplace. Ontario's got 35 per cent of the total population. It's the biggest market, so it will make a significant difference in anything they do."
The power of the Leaf brand was shown in August when Scotiabank agreed to pay $800-million over 20 years beginning in July, 2018, for the naming rights to what is now called the Air Canada Centre. This is thought to be 10 times what Air Canada is paying in the current contract. Scotiabank is heavily involved in minor hockey and has its name on the Flames' arena so the deal with MLSE made sense. But Hendren, who worked with Scotiabank on the deal, said the fact the Leafs are on the rise was also a factor.
"There's no question the up-side potential of the Leafs had a lot to do with A, them being interested, and B, in what was ultimately paid," he said.
As the Leafs' success grows, they will attract more companies willing to pay big money to be associated with them.
"The merchandising can go across the country. Without a doubt they can sell across the country," said Cooper, who said he has seen surveys commissioned by the NHL that corroborate Charlton's findings. "The content will be that much more valuable that they will dish out to their corporate clients.
"There's a lift in sponsorship dollars, there's a lift in merchandising dollars, there's a lift in their digital value because people will be following them more online than before. All boats will rise with the tide."