The Problems Facing Tier 3 – Part One Of Four – Over Saturation And Depletion

While Tier 3 over saturation may be an obvious problem, breaking down why the market is over saturated is not as obvious as many think.

Sure, there is expansion every year. Un-needed and unwanted by the consumer. Looking at the most basic problem all Tier 3 teams face is important to understand the rest of the issues.

No player ever sets out to play Tier 3. That very basic tenant of consumerism in this business says that when no one is looking to “buy” your product from the outset, then you must “sell” your product.

In order to sell your product, any product, you not only need to have a good product, but you better have a great sales person.

In an over saturated Tier 3 market, price and quality drive consumer purchasing decisions.

When inferior products are found in the marketplace, they simply don’t last. This is when teams fold. Rarely are good operators ever effected by increased numbers of competitors. They simply outpace the market because of quality and reputation.

The market becomes over saturated not simply because of uncontrolled league expansion. But it becomes over saturated because of new products introduced into the market that take consumers away from Tier 3 potential purchases.

New products such as Tier II expansion, and new Hockey Academy programs.

When taking players out of potential Tier 3 purchasing opportunities, because of new product options, and the addition of yet more Tier 3 teams via expansion, you have a real vacuum.

With every new Tier II program, 25 players are taken out of the Tier 3 market. With every new Hockey Academy program, a minimum of 25 players and upward of 50 players are taken out of the Tier 3 market.

Look for more expansion in Tier II and Academy programs in 2020, putting more pressure on the pay to play player market.

While some will point to USA Hockey’s growth numbers as a reason for optimism and why theoretically Tier 3 should be fine, they don’t really drill down into those numbers.

While hockey numbers may grow slightly every year, they are not growing exponentially in the most critical recruiting pools for junior hockey in general. Even when there is growth in those areas it is not enough to offset the number of new players needed for expansion.

Leagues are in the business of expansion. Selling franchises and capturing territory to increase values of their existing franchises. Strong brands can survive when franchises fold and that’s why they don’t really care if they lose a few each year. They still get the franchise fee, and all franchises are risky, no matter what business sector they are in.

Tier 3 over saturation is like a rubber band being pulled in multiple directions. You have expansion pulling one way, and new consumer options pulling another way. All the while, players and parents don’t want to pay to play from the very start.

This rubber band being pulled in multiple directions always breaks.

Now, because of this, players stuck with Tier 3 as their only option are in the drivers seat. They can name their price and hold out for the best deal. So once again, those with the best product and best deal get the consumer, now its usually at a discount.

Tier 3 operators complain about this whole situation, yet they help create the problem themselves every year.

Now everyone should understand that the over saturation issue isn’t simply a matter of over expansion. It is several things creating a vacuum in the player pool.

There are solutions to this problem though that will be addressed in the final part of this series. Next week we will address another segment of the problems facing Tier 3.