Coronavirus – Financial Impact To Come On All Levels Of Junior Hockey

The Coronavirus is what many are calling “the ultimate black swan event”. A black swan event meaning a catastrophic event that no one was, or could have been prepared for its happening.

Hockey seasons across the board have been cancelled. More important though is how the closure of business, and lack of employment will effect all levels of junior hockey.

I have been in a isolated or social distanced state for the last two weeks in Poland. I have spend that time speaking to Owners, Coaches and Scouts ate every level of junior and professional hockey around the world.

While we all understand now just how serious Coronavirus is to the health and welfare of the world, few are talking about how this virus impacts the future of hockey.

Already, some Owners at all levels are talking about shutting down or selling. Owning a junior hockey team takes money. Money from business outside of junior hockey. If those business operations are shut down or losing money, the hockey team becomes the last priority.

At the Tier I, Tier II and Major Junior levels Owners are already talking about lost advertising and sponsor revenue. Because those advertisers and sponsors having less disposable income to put toward sports. Those lost revenues further impact the ability to afford to put a team on the ice.

The lost ticket, concessions, and merchandise sales revenue from the premature end of the season certainly doesn’t help either. This makes it more difficult to prepare for next season as well because business projections for attendance simply cant be done normally during this type of event.

While Tier III and Pay to Play programs are talking about lost tuition from summer teams, summer tournaments, and camps crippling their programs ability to operate next year.

Ice arena owners who are shut down, are also fearing that teams folding will impact their income. Those losses result in higher priced ice times, putting a bigger squeeze on everyone’s finances.

Rising tuition costs to make up for the loss of summer revenues, put the squeeze on the parents who have also not been able to work in many cases. Pricing some people out of playing hockey.

Money makes the hockey world go round. The longer teams and arenas go without income, the more likely they are to not be around next season.

Now more than ever it is critical to be prepared for what is to come.

More team and league camps will be cancelled in the coming weeks. With each cancellation, money is lost that those teams and leagues rely on to move into the next season.

What do you as a player do then? Do you continue to believe that every team camp invite you get is legitimate opportunity, or is it simply a way to keep money coming into the bank?

Major Junior, Tiier I and II Main camp numbers this late summer will be huge. Teams will have no choice but to have 200 to 300 players at main camp. They will need the revenue.

Some teams are talking about a “Rookie Main Camp” followed by “Main Camp” as a way of recapturing lost revenues from “pre draft” and “open camp” cancellations.

The Tier III teams that are left standing will have their pick of who they want to sign not only based on who can afford to pay, but who is actually ready for junior hockey.

The Coronavirus will likely be the great adjustment to Tier III that is long overdue. But are you prepared for it if Tier III is your best option?

It’s time to start thinking about what is to come. This pandemic wont last forever, but it will last long enough to damage some organizations to a point where they can not move forward.

Now more than ever, it will be critical to have a financial plan for the off season once people are allowed back on the ice. Being efficient in how you go about that planning, will be the difference between getting through this event in good condition, or being left on the outside looking in come September.

Yes. Maybe this sounds a bit “doomsday” esque. Maybe the Coronavirus is just another flu like some people would like to believe. Maybe its just a hoax like some nut jobs would like to say.

But in Europe, some countries have already put in place “no transfer” rules. Meaning that they will not be purchasing players from North America or other European countries as a way to save money for next season. Effectively cutting off some countries for players from North America who thought they could get to certain countries in Europe.

Why is this important to note? Because European leagues were the first to shut down. Europe was the first to publicly recognize the threat of Coronavirus outside of China. They are now, in all sports, preparing for the financial end of the virus to come.

Automakers and other manufacturers have shut down. Other large companies that support sports around the world are closed. Those larger operations largely receive supplies and parts from smaller companies who are also shut down.

The financial chain reaction around the world to come will be much greater than the one already experienced in the shut down. When teams don’t have money, they simply disappear.

North America should now prepare. Players, and Parents should now prepare. Anyone thinking everything will go back to normal is delusional.

Tomorrow I will go into more details on what is to come.

Joseph Kolodziej – Adviser