The Business of HockeyDiscuss the financial and business aspects of the NHL. Franchise sales, valuations, TV contracts, ratings, expansion, relocation, the CBA and work stoppage discussion goes here.
Are Fans of Big Market Teams Annoyed At the Money-Losing Teams?
Perhaps you should explain how Ottawa (2.8M profit in 2012) and Calgary (1.1M profit) are putting up such meager profits despite being Canadian and selling out every game? Those numbers are quite negligible when talking about +100M revenues. In fact, they're smaller than some non-Original 6 American franchises like Colorado and Philadelphia.
Only four of the seven Canadian franchises were top-10 in total revenue last season (Calgary barely making 10th place). Winnipeg was 3rd last in the NHL in total revenue last season, only Phoenix and the Islanders had less. Even New Jersey, a team gushing in +150M of debt, is breaking even or maybe even making a slight profit from hockey operations.
Speaking of debt, in terms of debt/value ratio....three of the bottom 10 teams are Canadian. For reference, Phoenix is 10th best, Calgary and Toronto are the only Canadian teams in better standing when it comes to debt vs. worth.
The Jets were in the Top 10 in league revenue last year...
Last edited by roccerfeller: 10-09-2012 at 01:59 PM.
It's a decent site for comparing this and that but the numbers have be taken with a big grain of salt. NHL teams do not open their books. Forbes does not have access to what teams are earning or losing or anything else for that matter. They make educated guesses and as with most US-based sites, they do it rather poorly.
To answer the question posed by the OP, I don't see why fans of big market teams should have much angst towards money-losing teams. The reality is that the majority of teams that are making money now, were losing money sometime in the past. Its kind of a hollow argument.
I also think the amount of teams that are really struggling are a lot less than what the average fan may believe. I count 3-4, total: Florida, Columbus, New York (Islanders), and Phoenix. Out of these, all but Phoenix are probably salvageable markets (some argue Phoenix is as well but I just don't see it. It was one of the weakest markets in the league before bankruptcy, let alone after three years of ownership troubles and a lockout).
Ah just as I thought. He took numbers that were "accurate" for the Jets up to November 2011.
You know, since they had the full 2010-2011 seasons as the Atlanta Thrashers to go by
**Jets were in Top 10 league revenue, in their first year. For the record, for any debates that come up, in case any posters are unaware. There is a thread about it in the BoH boards.**
Do we have a valid link to the 2011-2012 season with ACCURATE league revenue numbers?
At this point I don't believe the 2011-2012 numbers have been released.
The Forbes article (that everyone seems to enjoy referencing) show the Jets at 71M in revenue with a posted 5.2M loss. Those were the last numbers earned by the Thrashers.
Gate revenue alone hovers at 1.2M per game. While the final numbers have yet to be reported it's been widely acknowledged that total revenue for the Jets exceeded 100M. The team did not qualify to receive and won't contribute into revenue sharing.
I think it's time the NHL embraced the fact that it's niche and stopped trying to be the NBA.
Yeah, but you can't go backwards. You can't make it a SMALLER Niche than before. The only thing worse than the fact that people do not care about hockey in the American South, would be the mainstream non-hockey press TELLING EVERYONE that people do not care about hockey in the American South.
Quote:
Originally Posted by Soundwave
Focus on the markets where you know there is a sizable audience for ice hockey and stop trying to experiment with markets where there might be a market.
Every single hockey customer in Florida, California, Nashville, Columbus, etc. is one we didn't have before. I don't see how that's a bad thing.
Just like there was no way the NHL could let Edmonton leave for the United States, the NHL would be stupid to have an exodus out of the south.
Not when they could easily remedy the situation for all but one team via adopting what the NFL, NBA and MLB do.
Quote:
Originally Posted by Soundwave
Really I think where hockey's popularity has grown the most is actually (gasp) Canada, simply because of the natural population growth here, even if it's not huge, there's 3+ million more people in Canada now than 10 years ago.
I agree. Add Quebec, Add Seattle. Move PHX to Houston (where you can get out of the PHX market, but avoid having ATL and PHX teams leaving for the North) and start working on a plan for a second team in Southern Ontario with Bell and Rogers.
Quote:
Originally Posted by Soundwave
Especially with a lot of that population migrating to Alberta because of the oil industry, that's likely a lot of new Oiler/Flames fans for example. Of that 3 million increase, I'd say there's a fair chance for instance there's 500,000-800,000 more hockey fans in Canada over the last 10 years, perhaps more. Hockey is so ingrained in the culture here, and especially with Ottawa, Vancouver, Edmonton, and Calgary all making runs to the Cup and Winnipeg returning, there's likely been a ton of new fans added up north.
While those cities are growing, that doesn't really create a new market. It's just the existing ones growing. If Quebec comes back, there's no city outside someone else's territory to place another team in.
After Quebec, it's a fight with MLSE or no one.
Quote:
Originally Posted by roccerfeller
The Jets were in the Top 10 in league revenue last year...
Really? Cause the Jets owner said they had just under $100 million in revenues. That would put them in 14th place in revenue FOR 2011. So unless four teams had lower revenue than the year before...
Do we have a valid link to the 2011-2012 season with ACCURATE league revenue numbers?
No, not yet I don't think
Quote:
Originally Posted by KevFu
Really? Cause the Jets owner said they had just under $100 million in revenues. That would put them in 14th place in revenue in 2011. So unless four teams had lower revenue than the year before...
Puck found this...hear for yourself, judge for yourself. I believe they cracked the top 10...and it doesn't surprise me after all the fanfare, merch sales, and nationwide support they received this past year. More Jets merchandise was sold in Calgary, than Flames merchandise last year (at least at a few sports stores - from the respective owners' mouths)
To be fair, others claim they are in top 15... It may be in one case it is entirely hockey related revenue and in another it is TNSE's revenue (additional sources) packed in...they own the building, have the second or third (depending on which numbers one goes by) highest ticket prices in the league...is it really far fetched to believe?
I wouldn't go by the 2011 numbers that you seem keen to point out, since those reflect the Thrashers franchise + random Forbes factor...that is unless you have league revenues for last season. I have yet to see those anywhere. Its likely Forbes will do their annual refresh in November (and would be the first time they would factor the entire season for the Jets)
Last edited by roccerfeller: 10-09-2012 at 02:52 PM.
Puck found this...hear for yourself, judge for yourself. I believe they cracked the top 10...and it doesn't surprise me after all the fanfare, merch sales, and nationwide support they received this past year. More Jets merchandise was sold in Calgary, than Flames merchandise last year (at least at a few sports stores - from the respective owners' mouths)
To be fair, others claim they are in top 15... It may be in one case it is entirely hockey related revenue and in another it is TNSE's revenue (additional sources) packed in...they own the building, have the second or third (depending on which numbers one goes by) highest ticket prices in the league...is it really far fetched to believe?
I wouldn't go by the 2011 numbers that you seem keen to point out, since those reflect the Thrashers franchise + random Forbes factor...that is unless you have league revenues for last season. I have yet to see those anywhere. Its likely Forbes will do their annual refresh in November (and would be the first time they would factor the entire season for the Jets)
It's not "far fetched," but I also think that teams tend to claim different things in the last year of a CBA.
It could also mean the growth rate for each individual team is getting WORSE. That's extremely bad for the NHL if the cap/floor league average are rising that much when teams 10-14 are LOSING revenue compared to the previous year. That means ALL the growth is coming from the Top 9 teams and the relocation of the Jets; and we're got 20 franchises even worse off than we thought.
I expected teams 10-18 (and 19-30 for that matter) to GROW revenues, just not as much as 1-9.
I only "seem keen" to point out 2011 Forbes numbers for the other 29 teams when discussing midpoint, league average revenues, etc, etc, because you need the data to craft formulas for percentages of HRR, cap, floor, revenue sharing etc, and it's the most "complete" data we have. I NEVER assign the Thrashers value to Winnipeg, because I know damned well that's an Atlanta number and not a Winnipeg number.
Moving Tampa? Seriously? They just got a new owner who is willing to spend, renovated their arena, and live in one of the most sports crazy cities in Florida. Not to mention they're at most a 3 hour drive for anyone in central florida. Oh and they're a really good hockey team. The issues with Tampa games isn't the fanbase (though lets be honest, there isnt a lot of hockey love in Central Florida because of COllege Football, that doesn't stop the Rays or Bucs from succeeding though) but its also their location on TV. They're on a much lesser known network (SunSports) ever since the local big cable provider and Fox bickered over broadcasting games for Central Florida sports.
Seriously.
Look at the tv numbers.
If that's how many people are tuning into watch the league's best goal scorer, your market sucks for hockey.
You've got bonafide superstars in Tampa. You've already won a cup. And these are your numbers?
Well, if there's one thing I'm supposed to have learned, it's that numbers are meaningless without revenue context. How can you call for relocations without knowing how much these teams are making on local TV deals?
We're talking about fan interest. Even if they're getting good revenue, the fans don't care
Ticket Prices? What about what they give for free? 'Cause you can say people go to the games, but for how much? and they get from it?
Compare that to the low Canadian dollar 15 years ago (in case you've been dreaming, it was below 60 cents, compare to a dollar and two fifth of a cent, which is above the USD, the prices have changed since then, what about Phoenix and Florida?). You gotta assess the capacity of the market as well, I bet there are more people earning 100K in these markets than Winnipeg, yet Jets fans spend their entire savings to buy, not just one, but a bunch of merch, you would see kids wearing jersey to school, even now that there is a lockout. So it all comes down to how PASSIONATE the fans are, these are just numbers, you can tamper with it all you want, but you can't manipulate the culture of true hockey fans.
As for "growing the game", like I said a million times, its EXCLUSIVELY in the US, and its to compete with the top 3 sports leagues, its not for Mexico, or Puerto Rico, or Africa, its for the US and the US alone. It's not for changing people's culture as well, seriously, you're gonna blame people for not choosing hockey? 'Cause at this age, were people can access anything they get interested in, its not a matter of what's out there, but what they WANT to choose, so hockey is already an option, in terms of school programs, thats your government's problem. Hockey is expensive, especially when you need refrigerated arenas to play in, that would require a lot of money, not just throwing a team out there. Its not up to the NHL to "grow the game", whatever that means.
Forgetting just the whole lease agreements thing and the huge lawsuits that would come. This explains why Florida will not be moving any time soon for instance. I will save you the time on Milwaukee. It is not a viable option and the Bradley center is really not a great option. They did extensive studies on Milwaukee when the Nashville Predators got into the league, many believed Milwaukee was the top option. The ownership groups that could have been in place, vetted the market and came back with a no thanks. How you listed that before Seattle, Las Vegas or Kansas City is beyond me. All three have better chances. Would also probably throw out Houston, heck even a return to Hartford pending a building. They would need a new one at least being built to make Milwaukee a reality, with the Bradley Center being a temporary home.
WIsconsin has hockey built in.
The dustbowl states do not.
I'd prefer to locate in areas with a bit of hockey built into the culture
Yeah, but you can't go backwards. You can't make it a SMALLER Niche than before. The only thing worse than the fact that people do not care about hockey in the American South, would be the mainstream non-hockey press TELLING EVERYONE that people do not care about hockey in the American South.
Every single hockey customer in Florida, California, Nashville, Columbus, etc. is one we didn't have before. I don't see how that's a bad thing.
It's not about making the niche smaller, a niche is small by definition.
It's about making it stronger. Focus on the markets where you know you have dedicated fanbases.
Any business when its bloated and not making money downsizes to become leaner and more profitable. The NHL doesn't operate on magical economics, there isn't enough demand for the supply of teams they're putting out there. That's no one's fault, it's just the fact that after 15+ years of southern expansion, hockey is still a very tough sell. You can't say the NHL hasn't tried.
Who's talking about deserving to win? The comments were made that the Canadian franchises are the only thing that seems to providing the league with any degree of financial viability. And, looking at the numbers, how is that in any way untrue?
We don't yet have the numbers for this season just completed, so based off the previous season's numbers we know that a grand total of 12 NHL clubs made money. Of these 12, it's an even split 6 Canadian, and 6 American. However, 4 of the top 5 teams in terms of profit were the Canadian franchises.
A couple of HF posters have said this.
My comment was kind of tongue in cheek, but every spring there will be threads titled:
- which Canadian team will win the Cup first?
- rank the Canadian playoff teams
- which Canadian team do you root for after your team is out of playoffs?
there will be others - if there are playoffs in 2013.
Apparently you don't follow their stock... They were on top for a few years at most, now they are down in the toilet again. Down 500% in the last 2 years, most likely will continue following.
No, I have followed it. The nosedive of Netflix can be traced to two major decisions:
- The Qwikster fiasco
- Failure to recognize Redbox as a competitor
There have been a ton of businesses that have shot to the top of a marketplace, only to be wiped from existence before the industry as a whole reaches fruition. Docutel with ATMs, People Express with low-fare airlines, and so on. But the point is that they were expanding rapidly and, for a time, did quite well as they were the first in....but they lacked the dexterity or foresight to maintain their stranglehold. In sports, MLB is a great example of how short-sighted decisions and failure to recognize crisis points allowed a competitor (the NFL) to overtake them, which was previously unthinkable.
We're talking about fan interest. Even if they're getting good revenue, the fans don't care
Now wait a minute, I'm confused. I have one person telling me that attendance numbers mean nothing because the revenues might be too low, and I have another saying that the revenue means nothing because the attendance and viewership is too low.
Fans should just stick to rooting for their favorite team and not concern themselves with how much money the millionaire owners and players are losing.
WIsconsin has hockey built in.
The dustbowl states do not.
I'd prefer to locate in areas with a bit of hockey built into the culture
Milwaukee does not have this culture, I live here CB, trust me I know what I am talking about. I go to a lot of Admirals games and have talked to people that have worked for the organization. NHL in Milwaukee is still fantasy, in fact it has been turned down by Milwaukee ownership groups when approached in by the NHL. There are fans just not a sustainable market, the Madison area and upper part of the state are much more into the game. There you fight with the Badgers and Packers. Also curious if Chicago would be thrilled about them dropping in a team so close.
I am actually curious why Omaha is never thrown out, I guess because Columbus hasn't worked out, but I have always found that an interesting market with plenty of dollars to get a building and owner in place. Of course attracting players would be hard, but I think it is a market that would work. The upper plains are very into hockey on both the college and USHL level.
Milwaukee does not have this culture, I live here CB, trust me I know what I am talking about. I go to a lot of Admirals games and have talked to people that have worked for the organization. NHL in Milwaukee is still fantasy, in fact it has been turned down by Milwaukee ownership groups when approached in by the NHL. There are fans just not a sustainable market, the Madison area and upper part of the state are much more into the game. There you fight with the Badgers and Packers. Also curious if Chicago would be thrilled about them dropping in a team so close.
I am actually curious why Omaha is never thrown out, I guess because Columbus hasn't worked out, but I have always found that an interesting market with plenty of dollars to get a building and owner in place. Of course attracting players would be hard, but I think it is a market that would work. The upper plains are very into hockey on both the college and USHL level.
I completely agree about Omaha. Hockey is a popular sport there. There's an arena. They have winters. There are a few fortune 500 companies for corporate support (including Berkshire Hathaway). There's about a million people in the metropolitan area (I think something like ~900K in the metro, and ~1.2 million within a 50-mile radius). It would be the only professional sports team in town.
Sounds good to me.
Move the Coyotes to Omaha. Expand to Seattle and Quebec City.
Any markets having trouble? You've still got a beautiful spot awaiting in Southern Ontario, as well as US markets like Portland, Houston, Las Vegas, Norfolk, etc.
We're talking about fan interest. Even if they're getting good revenue, the fans don't care
Quote:
Originally Posted by Soundwave
It's not about making the niche smaller, a niche is small by definition.
It's about making it stronger. Focus on the markets where you know you have dedicated fanbases.
Any business when its bloated and not making money downsizes to become leaner and more profitable. The NHL doesn't operate on magical economics, there isn't enough demand for the supply of teams they're putting out there. That's no one's fault, it's just the fact that after 15+ years of southern expansion, hockey is still a very tough sell. You can't say the NHL hasn't tried.
Even if Tampa's only got 3,000 TV viewers, every market you yanke is fewer people watching hockey on TV, buying NHL tickets and going to the arena, and fewer people being a fan of the league.
The idea that the niche could be STRONGER by axing markets doesn't wash with me. I understand the financial aspect of it (But it would require a totally new CBA. As I've illustrated dozens of times, the current setup tethering HRR to payroll always creates poor teams out of those who can't keep pace with the revenue growth at the top), but look at it this way:
Winnipeg is full of die hard fans who will support their team in good times and bad, and pay larger prices to do so.
Wouldn't Florida, Columbus, Phoenix, or Long Island fans all qualify as die-hards by default? Their franchises have been in disarray for a long time and they still have the fans they do have. Those markets also have a ton of people to gain as bandwagoners when those teams succeed. (Winnipeg doesn't have bandwagon fans to gain, because they're all die-hards).
So, a "Stronger" niche means what exactly? People who put hockey ahead of everything else? Those markets in the south have those. Just not enough of them. But they have an excess of potential people who can become those fans if they win.
I don't see how there's an increase in strength by axing markets. I think publically any market "failed" is a stain on your league. For a league to tout "Hockey Is For Everyone" and then go back and say "Yeah, we were wrong, hockey's for the North" would be an epic disaster. It would kill any potential growth of the sport for generations.
We're this far down the path of "growing the game" and it HAS grown. To say it hasn't grown enough to be worth it is fair, but to rip out those roots would be a horrendous business move on a wide scale.
I see two markets that worry me as "I really don't think hockey could flourish there" and that's Phoenix and Miami. Miami because I don't think enough of their population is going to give it a chance, and Phoenix because the last three years have pissed off so many people.
However, given Florida's lease and the fact that vacating Miami, Phoenix and Atlanta in a 2-4 year stretch would lead to "The experiment failed" stories, it would be very bad.
I think you stay the course in the South and you move Phoenix when Houston's ready, so they move ACROSS the South, not out of it.
I think you stay the course in the South and you move Phoenix when Houston's ready, so they move ACROSS the South, not out of it.
What's there to do in Houston other than "find" an owner? (easier said than done)
Don't they already have an arena? I would assume the new owner could work something out there, or maybe the Rocket's owner become partial Houston owner...?
Whatever happens, Phx needs to move - pretty much anywhere. The sooner the better.
There are a lot of brainless and misinformed comments in this thread, but this one takes the prize. Congratulations.
Really? Other than mis-using the term "Traditional market" everything else is spot on.
The wealthy teams don't want their arenas empty. They make money when teh NHL plays hockey.
The teams that save money with empty arenas are why we are here.
It's a friggin joke that I have to pay $95 to sit halfway to the nosebleeds in Toronto while I can get Family packs in several Markets for half that.
So these teams give away tickets for nothing then cry they are poor. Is that not a joke? Teams altering attendance figures so they qualify for revenue sharing, is just sad.
What's there to do in Houston other than "find" an owner? (easier said than done)
Don't they already have an arena? I would assume the new owner could work something out there, or maybe the Rocket's owner become partial Houston owner...?
Whatever happens, Phx needs to move - pretty much anywhere. The sooner the better.
The terms of the city of Houston's lease for the Toyota Center with the Houston Rockets basically gives their owner, Les Alexander, exclusive rights to NHL hockey in Houston.
So it wouldn't just be finding an owner, it would be finding an owner to buy that exclusivity from Alexander, or just getting Alexander to buy PHX.
This is a hilarious question when it's a fact that the idiots running the big market teams such as Jeremy Jacobs and Ed snider are the ones steering the owners ship and prolonging this lockout. The question should be, are smal market team fans annoyed that the big market teams are creating this lockout.
Those are only 2 of 8 on the negotiating committee.
Now I guarantee you they said NO CHANCE to increased revenue sharing but to think this lockout is for the benifit of anyone but the poor money losing franchises is just wrong.
Jacobs and Snider(and the other rich teams) got their golden goose when they got a salary cap. Now instead of spending 80 million they can only spend 60. Thats 20 million into ownerships pockets.
We're talking about fan interest. Even if they're getting good revenue, the fans don't care
Quote:
Originally Posted by Mayor Bee
Now wait a minute, I'm confused. I have one person telling me that attendance numbers mean nothing because the revenues might be too low, and I have another saying that the revenue means nothing because the attendance and viewership is too low.
Which is it?
To be fair Bea, what I said was that the posting of random attendance numbers sans the underlying revenue context is meaningless. As Captain Bob stated, the fans may indeed not care, but given that this happens to be the business forum, posts here should probably offer some sort of a financial/business context to be topical. Your own mileage may vary, apparently.
