NHL to Expand 2 teams in Canada - THN
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11-14-2012, 05:51 PM
Join Date: May 2009
Location: New Orleans
Originally Posted by
Apparently, which is shocking to me, on Hockey Central one day in Canada they were mentioning that word got out that SJ lost money in each of the last six years. Is it real money, creative accounting? I don't know but the balance sheet was made to not look that good.
"Losing money" is borderline worthless as an indicator.
San Jose has lost money because they spend it on players:
2008: $44 payroll, +$2.4
2009: $54 payroll, -$5.0
2010: $57 payroll, -$6.2
2011: $65 payroll, -$7.8
Isn't this what everyone is clamoring for in the revenue sharing threads? "There's no incentive to improve your team!"
San Jose is what you'd WANT: They spend money to increase revenues. They lose money because they CHOOSE to lose money.
The Sharks are most like a loss-leader for the arena, which the team operates.
Even without the sweet lease that gives them all the arena revenues, their $27.5 in operating losses since buying the team in 2002 will be offset by the franchise rising $64 million in value over the purchase price since then. They'll make back all their losses on the team via the sale of the team when they decide to do so; and the team's success brings in more arena revenue.
If a team didn't invest in payroll and spent only what they can afford (which the league no longer allows), their revenue streams would be stagnant, their team value would be stagnant, and their franchise value doesn't go up.
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