Keller: Sorry, Canada – the NHL Just Got Stable
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12-01-2013, 11:01 PM
Join Date: Nov 2009
Originally Posted by
Buck Aki Berg
As a hockey fan, I have the same emotional response - I want hockey to be where it's watched, enjoyed, and appreciated, not where it's propped up by subsidies and complimentary products on off nights.
From an economic standpoint, it's certainly not a bad business plan.
It's no different than how a grocery store sells staple products below cost to bring people in, knowing they'll come out ahead because these people will buy a dozen other things at a markup. If the operation comes out ahead, it's not bad business.
For the teams or the league?
We know that in places like Florida, ownership uses the NHL franchise as a lost leader. The team is tied to the lease, so while it losses money, ownership is happy because the events and concerts held at the arena generate a profit.
However, to my knowledge, that profit isn't counted in HRR. So, by the NHL's financials, the Panthers lose money. Whether the ownership group is making money is not important. It helps stabilize the franchise, it (combined with the lease) makes it unlikely the team will move, but it doesn't make the Panthers franchise any less of a drag on league revenues.
If the NHL had the option of moving the Panthers today, the lease pushed aside with no legal ramifications and emotions of the "we stand by our fans" stance dropped, I think they do. There's no economic benefit at this point to having a team in South Florida, but the status quo ensures that there will be.
This deal won't change those facts. The Panthers and Coyotes will continue to be an anchor around the NHL's neck. Their revenues haven't changed, their underlying economics haven't changed, only league revenues have. Since every team gets that benefit equally, I don't see how this will fix the problems plaguing them. Whatever benefit the extra money brings in, much of that will be eroded by a rising cap floor.
Originally Posted by
Can't disagree at all, though I'll point out a few devils advocate opinions on the bolded.
Had the Atlanta owners not been actively trying to ditch the team from the moment they bought the three entities (Thrashers, Hawks, Phillips) from Turner aren't the odds significantly in favor of the Jets still being the Thrashers? Same can be said with the Coyotes and Moyes, though the NHL at least had the ability to prevent that one from happening.
The CBA (especially the cap) also went a long way in allowing teams like Nashville and Carolina to become competitive and turn from teams that were hemorrhaging money and in turn become teams that are break-even or better as much as they are not of late?
But that said, the increase in the Canadian TV deal still means the mid and lower revenue teams need to keep up lest they financially not be able to play on a level playing field with 10+ million differential in payrolls. The money from expansions (Seattle and whichever of QC/Toronto2/Hamilton) in the next few years are only going to exacerbate that.
ASG and Moyes' lack of desire to own a franchise doesn't change the fact that each franchise was losing in excess of $10 million a year.
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