Can the Blue Jackets survive in Columbus?

November 9, 10:33 AMSports Business ExaminerJosh Lobdell

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The Columbus Blue Jackets are losing money, lots of money and the reason why, is unfavorable lease terms with the Nationwide insurance Company owner of their home, Nationwide Arena.

The Blue Jackets are paying 5 million dollars a year to play there, and they are responsible for the operation of the stadium which loses them about 4 million dollars a year. Meanwhile Nationwide Insurance keeps all the revenue from the parking, concession, and other revenue streams the stadium generates.

Over the last few years it seems that the Blue Jackets have lost at least 30.4 million dollars, and at most 43 million dollars. Either way a team cannot survive losing that kind of money.

The obvious solution is to sell more tickets, but the Blue Jackets may have a very hard time doing that. First and foremost Columbus is not a traditional hockey market, and they must compete all Fall with the Ohio State University Buckeyes and the appeal of College Football.

While the Columbus is the largest city in the State of Ohio, it only has 754,885 residents. Last year 637,284 fans came to Blue Jackets home games, so the market for increasing ticket sales in this city seems rather limited. The Blue Jackets averaged 15,543 fans per home game and sold 85% of their ticket inventory on their way to a first round playoff loss to the Detroit Red Wings.

Simply selling more tickets is not the answer for the Blue Jackets. Even though they rank 25th in the NHL in attendance, there doesn't seem to be much room for improvement there.

The city of Columbus has used the Blue Jackets, and Nationwide Arena as a catalyst to redevelop the stadium district, and Franklin County as well as the city of Columbus could ill afford to lose the tax revenue should the Blue Jackets be forced to relocate.

Using pretty conservative numbers the arena district of Columbus is home to 170 businesses, the area employs 5,500 people, and generates around 30 million dollars in state and local taxes.

All of that is well and good, but the Blue Jackets are losing money from 12.9 to 16.6 million in 2006, between 5.5 and 9.9 million in 2007, and between 12 to 16.5 million in 2008.

The best way for the Blue Jackets to make more money would be to promote non hockey events at their stadium, but here they face the competition of the facilities of OSU, and a county owned facility in the immediate area.