The NCDC – A Tier II Business Model Of Sustainability

When the NCDC was a concept, just a thought beginning to take shape on the East Coast, I came out in support of it.

I supported the addition of more free to play hockey, and I strongly supported the business model on which it was based. Of course people from other leagues didn’t like my vocal support or the fact that I challenged the status quo thoughts on how “free to play” hockey should fund operations.

Today, when other free to play leagues are looking for financial assistance from governments, when other leagues are being informed sponsors will not be supporting them financially, and other leagues are being informed that they may not be able to sell tickets, the NCDC business model makes even more sense than before.

Of the four remaining free to play leagues in North America, the NCDC is now clearly leading the way in business preparedness for financial crisis.

The BCHL is seeking a bailout from the government. The USHL and NAHL have not even commented on its cancelled events, or the fact that minimal to no advertising and ticket revenues are being generated for next season.

One league would go so far to supplement its income with a new scheme to get money from players during this pandemic. More on that next Monday.

The NCDC on the other hand has maintained all along that it does not need to sell any advertising or tickets to fund the teams and remain completely viable moving into the future.

While some complained that the players in the USPHL were paying more to fund the NCDC, some of those same complainers were quietly funding their own Tier II teams through other pay to play hockey operations.

Completely self contained, the NCDC season for 2020-2021 can move forward without selling a single ticket or sponsorship.

The business model of Tier II hockey has changed and will continue to change. Nearly every Tier II team in Canada now charges some type of fee to help fund the program. Look for those fee’s to go up, and new teams to start charging this year.

The business model of “free to play” hockey was originally designed when ice costs were less than fifty dollars and hour and gas was fifty cents a gallon. In todays world that business model is not sustainable for owners to put teams on the ice without losses upward of a half million dollars a year.

Imagine now when advertising revenue is cut dramatically or completely disappears because sponsors simply don’t have profits to spend on hockey sponsorships.

Imagine now a season where teams are not allowed to sell tickets, or can only sell socially distanced seating to the games. How do you survive that revenue loss?

How do you survive both of those combined losses of revenue?

That, is the new reality. That is exactly what we may see in the coming months. How many teams and leagues will survive that reality?

One thing is for certain, the NCDC is prepared for the new reality. A completely viable business model that does not rely on a single ticket being purchased, or a single sponsorship being collected.

While none of us could have predicted this new reality would be the result of the Coronavirus, In 2017 before a single game was played, I said that the NCDC model was the most sustainable business model in free to play hockey.

Some operators in other leagues have quietly implemented their own version of the NCDC model by owning Tier III, Midget teams, or creating showcases and tournaments to fund their Tier II programs. While publicly complaining that the NCDC is still around.

With each passing day, the viability of other free to play programs or revenue dependent programs is reduced. With every passing day, costs rise.

While I continue to support all free to play hockey as it benefits players, the time for a better mouse trap has come.

Hockey is a business. The NCDC is simply a new way of doing business. Other ticket revenue dependent leagues are selling entertainment, no different than a concert, the cinema or a play.

Imagine now that these revenue dependent leagues now have restrictions put in place on how many ticket holders can actually attend each game. If you need 1000 people per night to break even on your expenses and you can only have 500 in the building, what happens then?

Because those ticket revenues directly impact the value of sponsorships and advertising sold. Less attendance means lower sponsorship and advertising value. Which either brings lower cost advertising, and sponsorship prices, or less advertisers and sponsors. Reducing team income further.

Change is painful. Even when its change for the better, people always resist. The NCDC business model represented change. People have resisted changing. Now, when a true test, a pandemic and economic crisis is before us, other leagues will be forced to embrace change.

Those who refuse to change and adapt will find themselves left behind. Changes in free to play hockey are coming. Teams will fold. Some teams will begin charging fees that have not in the past. Some teams will further embrace the NCDC model in a more public way.

Thankfully, the NCDC doesn’t even need to think about changing their business model. They became the first self contained development model in the country simply by making a better plan. A smarter plan with less risk, the same thing every other smart business is operated.

Maybe now, some will take a new view on the NCDC. They will have a season, with or without fans in the stands or advertising. That is security for players, team employee’s and owners. An interesting concept in todays world.

Joseph Kolodziej – Adviser