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04-22-2010, 01:51 PM
Join Date: Aug 2006
Since my post has now been linked from another thread, I should update my analysis with more current numbers:
Average League Attendance: 5781 round it up to 6000 (from boris4c's post).
Number of games - 28 home games.
Salary Cap - $17.4M (down from $24M in 2009-10)
Average Team Budget: From (1.) below, the 2009 average budget was $25M - of very close to the Salary Cap number. The median budget was about $20M. With the Salary Cap dropping to $17.4M, it is reasonable to assume that the average and median team budgets will drop proportionally (actually, since fixed expenses don't drop with salaries, budgets will probably not drop as much as the salary cap, but this is a conservative estimate). So let's use an average team budget of about $18M and a median of $15M.
Budget includes all fixed and variable costs.
Revenues sources: I don't have any better estimates - so let's stick with 60% from gates and 40% from TV, advertising, parking, concessions and other sources.
Average ticket price: See (2. and 3. below). Premium tickets seem to go for about $35US while the cheap seats are as low as $5US. Considering good team and bad teams, good seats and bad seats, I'll use an average ticket price of $15US.
Assume all seats are sold for the average price.
With an annual budget of $18M, and 28 home games per year, break even net revenues per game are: $642,000. Using the 60/40 gates to other revenues break down that means each game has to generate $386,000 in gates revenues and another $257,000 in television, advertising, parking, concessions, merchandise, etc.
With 6000 in average attendance, then on average each paid seat has to generate $64.30. So is $65.00 per average ticket affordable to the average Russian hockey fan? Using the updated monthly income of 19,000 Rubles per month or about $650US, I doubt the average fan is going to spend 10% of their monthly income for a single hockey ticket.
However with actual average ticket prices closer to $15/seat, actual gates revenues are only $90,000 per game or $2,520,000 per season out of a budget of $15M (median) to $18M (average).
So, even with the lower salary cap for 2010-11, to break even, the average KHL team either has to charge close to $65.00 per ticket or raise an additional $13M to $16M annually from TV, advertising, concession, parking and merchandise:
TV revenues - let's be wildly optimistic and say on average a KHL team gets $2M per year in TV revenues (that is roughly equivalent to the NHL per team national TV revenues).
Parking - 1000 cars x $5.00 each is not going to significantly alter the financial picture. That's only $140,000 per year.
Concessions - lets assume every fan spends $10.00 at the concession. That's another $1.7M.
So to make up the short fall of over $10M per year, they are going to have to sell an awful lot of Sergei Mozyakin jerseys.
Simply put, even with a lowered, $17.4M salary cap, the conditions to sustain the cost structure of the KHL as a business do not exist in the current Russian economy.
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