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.
PKP offer for Coyotes may be 230 million (mod: to QC w/relo $$)
Fair enough. But how is a franchise in QC worth $230 when a franchise in WPG was worth $170 one year ago?
value is simply what one party is willing to pay the other. The NHL isn't dealing with middlemen this time since they own the team. They pick the price they want to accept & go from there.
The problem with the Old Colisee is the lack of corporate suites which will considerably reduce the possible profit PKP can make there.
PKP will make back that cash with TVA Sports, because honestly people are tired of RDS and their spam of the Habs. He is also more than willing to accept a 3 year loss for a much bigger profit for the next 25 years.
Fair enough. But how is a franchise in QC worth $230 when a franchise in WPG was worth $170 one year ago?
I think the reason why PKP will pay more is because he wants content on his TVA sports channel. So he might just pay more and say hey can I get some games for my sports channel, the 82 Nords games are a given and 50 games(just a guess) Pittsburgh Penguins, Philadelphia Flyers, Toronto Maple Leafs, Ottawa Senators games and other Canadian teamsor which ever games they pick(like).
Why can'y PKP simply balk at such a higher price knwoing the NHL has no viable options for next year?
I think the reason why PKP will pay more is because he wants content on his TVA sports channel. So he might just pay more and say hey can I get some games for my sports channel, the 82 Nords games are a given and 50 games(just a guess) Pittsburgh Penguins, Philadelphia Flyers, Toronto Maple Leafs, Ottawa Senators games and other Canadian teamsor which ever games they pick(like).
Why can'y PKP simply balk at such a higher price knwoing the NHL has no viable options for next year?
They could but then they're taking a huge step back with regards to acquiring a team. The league's asking price is likely based on what they've put into the Coyotes. If everything is as they say it is with regards to Quebecor, then they have the tools to maintain and heavily profit in Quebec City. Thus, the value of the team and the value of the market, both of which the NHL holds, is whatever they want it to be if the interested purchaser wants to have an NHL franchise.
Why can'y PKP simply balk at such a higher price knwoing the NHL has no viable options for next year?
I've posted this before, but I am overtly rooting for a high-stakes staring contest between PKP and GB. PKP desperately wants a team and there are no other forseeable relo options before 2015. The league needs to have this resolved.
However, If the CoG has notified the league that they will not pony up another $25mm next year, the NHL is the more desperate party.
If this rumor is true, the question is whether PKP has the nerve to hold the line at the $170mm range and call the league's bluff.
I'd love to be a fly on the wall at that negotiating session.
I've posted this before, but I am overtly rooting for a high-stakes staring contest between PKP and GB. PKP desperately wants a team and there are no other forseeable relo options before 2015. The league needs to have this resolved.
However, If the CoG has notified the league that they will not pony up another $25mm next year, the NHL is the more desperate party.
If this rumor is true, the question is whether PKP has the nerve to hold the line at the $170mm range and call the league's bluff.
I'd love to be a fly on the wall at that negotiating session.
Like I have said in my above post(s), that GB can just say, look you got a brand new TVA sports channel if you give us the asking price, we give you
50 or more games(just a guess/82 Nord games would be a given) for your brand new sports channel. And you pick which ever you like.
One might argue as a division winner and having gone to the playoffs the last two seasons that Phoenix is (now) more valuable than Atlanta (was).
And one would be wrong to do so.
Sure, the Coyotes are a playoff team RIGHT NOW but would they be a playoff team without Doan, Whitney, Roszival and Pyatt? Because those guys are UFAs at the end of the season and outside of Pyatt, I don't see any of them back in Quebec City. Roszival is easily replaceable and the new Nords would have the prospects to do so, but guys like Whitney and Doan (no chance in hell Doan signs in Qc) would be very hard to replace.
PKP wouldn't buy a playoff team at all, he would build a team with a nice core, but with a LOT of holes upfront. I don't think the success they've enjoyed in the past few years would influence the price PKP could pay for the team. We're not talking about a Stanley Cup contender here, we're talking about a good playoff team that will lose several key pieces. A Coyote team without Doan and Whitney is worth less than a team with them on it, recent success nonwithstanding.
I think the reason why PKP will pay more is because he wants content on his TVA sports channel. So he might just pay more and say hey can I get some games for my sports channel, the 82 Nords games are a given and 50 games(just a guess) Pittsburgh Penguins, Philadelphia Flyers, Toronto Maple Leafs, Ottawa Senators games and other Canadian teamsor which ever games they pick(like).
They already broadcast 40+ Sens games and they have a contract for a few more years with them. They also are the official French broadcasters of the Montreal Impact (MLS) and the Toronto Blue Jays (MLB), they just had the Masters, they broadcast a few NBA games a week, etc.
They are not DESPERATE for content. Sure, the Nords would put the network over the top, but it doesn't need them to be viable. To take the next step? Sure, but not to be a profitable entity.
They already broadcast 40+ Sens games and they have a contract for a few more years with them. They also are the official French broadcasters of the Montreal Impact (MLS) and the Toronto Blue Jays (MLB), they just had the Masters, they broadcast a few NBA games a week, etc.
They are not DESPERATE for content. Sure, the Nords would put the network over the top, but it doesn't need them to be viable. To take the next step? Sure, but not to be a profitable entity.
I did not know that TVA sports had so much content. But Bettman is slick and he might just play this card and get what he wants.
I did not know that TVA sports had so much content. But Bettman is slick and he might just play this card and get what he wants. He might you can also have playoffs games and the Stanley Cup(maybe) as well.
He might you can also have playoffs games and the Stanley Cup(maybe) as well.
value is simply what one party is willing to pay the other. The NHL isn't dealing with middlemen this time since they own the team. They pick the price they want to accept & go from there.
The NHL dictated to ASG how much they could sell the team for (and how much the relo fee would be).
There is one possible justification for the higher price - that after the success of Winnipeg this past year, teams in smaller Canadian markets now appear to be worth much more.
Some suggested the Coyotes might be more valuable than the Thrashers because of better on-ice success recently. Maybe marginally, but I have trouble seeing it as being $60 million more valuable just because you have a couple of 1st round losses as opposed to not making the playoffs.
Fair enough. But how is a franchise in QC worth $230 when a franchise in WPG was worth $170 one year ago?
Outside of the value in the area it relocates (I assume the new QC arena has more seats than MTS? That would make it more valuable.), there's the value of the actual team. The Coyotes have been perennial playoff participants (just won the Pacific division) with a better player base than Atlanta/Winnipeg. Where Winnipeg would have been a sweetheart surprise to make the playoffs this season, a relocated Coyotes team would be expected to make them. Where the first move by TNSE was to replace the front office and coach with their team, the Coyotes have one of the best coaches in the league, and a GM who has done a masterful job.
I agree the franchise includes players under contracts for next season, but what about players who won't be back? Obviously, Doan and Withney are not back?
I am not sure the performance on the ice have an impact. I think we are more talking revenues, pubilcity etc...
I can be wrong on this, may be it can have a certain influence.
Outside of the value in the area it relocates (I assume the new QC arena has more seats than MTS? That would make it more valuable.), there's the value of the actual team. The Coyotes have been perennial playoff participants (just won the Pacific division) with a better player base than Atlanta/Winnipeg. Where Winnipeg would have been a sweetheart surprise to make the playoffs this season, a relocated Coyotes team would be expected to make them. Where the first move by TNSE was to replace the front office and coach with their team, the Coyotes have one of the best coaches in the league, and a GM who has done a masterful job.
Very clear points. However, the question here is the $$$ amount the team is worth. In other words, how much $$ can an owner invest, given that he wants to make a profit after he buys. I am not just sure how playoff participation translates to franchise value.
If the discussion were, "How much are the Coyotes worth if they stay in Glendale?" then I would say a playoff run makes a difference. It would bring local interest, ticket sales, ad revenue, etc.
But, if they move, wherever they go, it's a new team. Past success won't necessarily mean future success, so the connection between on-ice success and $$ coming in breaks up. Now, it is also true that if they are good this year, they may be good next year, and that would help (at least in most markets). However, there is often lots of turnover in a couple years' time in non-O6 markets of playoff participation, so again, just because they are a div champ in '12 doesn't mean they will be in '13, and therefore, any claim to value as a relocated team again breaks down.
The NHL dictated to ASG how much they could sell the team for (and how much the relo fee would be).
There is one possible justification for the higher price - that after the success of Winnipeg this past year, teams in smaller Canadian markets now appear to be worth much more.
Some suggested the Coyotes might be more valuable than the Thrashers because of better on-ice success recently. Maybe marginally, but I have trouble seeing it as being $60 million more valuable just because you have a couple of 1st round losses as opposed to not making the playoffs.
Some quick numbers:
A playoff appearance is guaranteed a minimum of 2 games.
Assume sellouts for all playoff games (let's say 18,000 tickets).
Average ticket price is probably around $100/ticket (okay, so I'm using that for easy math, sue me).
Ignore for the moment any extra revenue from regional TV deals, parking, concessions, merchandise sales, etc.
So being swept in the first round of the playoffs is equal to 2 * 18,000 * $100 = $3.6MM in ticket revenue. So there's a minimum increased value of $3.6MM before you factor in any other revenue stream (and in QC that might be a pretty low average playoff ticket cost, but as I said, easy math). That figure can balloon pretty quickly: win the first round in 6, and lose the second round in 6 for 6 games, increase ticket price to $150 - 6 * 18,000 * $150 = $16.2MM in ticket sales.
Anyone know how many seats the proposed arena will have? MTS only has about 15,000 seats, so an 18,000 seat arena, selling out for every home game of a season would sell (18,000 - 15,000) * 41 = 123,000 more tickets. At even an average of say $60/ticket that's a flat $7.4MM in increased ticket sales. A quick google search tells me the average Jets ticket was $82, which would make for $10.1MM in additional ticket sales per year. So (neglecting time value of money) after a mere 6 years, a QC franchise playing in an 18,000 seat arena would pay back the additional $60MM in ticket sales alone. An arena the size of Bell Centre (21,000 seats) would do it in 3 years.
In the agreement with the bankruptcy court any profits the NHL makes (beyond the $140 million they paid to buy the team + losses the last 3 years) has to go to the creditors. I wonder if the relo fee would be included. I would think the creditors could sue for that.
Does anyone remember how much the creditors were owed? I don't, but had the impression that $140MM pretty much covered the claims that were admitted.
If the NHL is paid more than the creditors are owed, the NHL would of course be entitled to keep the difference because the creditors' claims under any agreement would be exhausted.
If there are claims against the bankrupt estate that the NHL does not admit (such as those of Gretzky and Moyes), they can litigate over the validity of those claims if it makes any difference to the pot of money that the eventual purchaser would pay to the NHL.
I lost track of the bankruptcy proceedings a very, very long time ago, and don't particularly wish to absorb that again.
What really interests me is the suggestion that PKP would pay that much money for a franchise. If that's true, Jim Treliving would have to hand over a lot of pizzas to match that offer, or even come close, if he is actually an "interested" purchaser.
Maybe cuase Atlanta were a basement team while the coyotes are a division winning team
nothing to do with pricing.
Quote:
Originally Posted by squidz
Outside of the value in the area it relocates (I assume the new QC arena has more seats than MTS? That would make it more valuable.), there's the value of the actual team. The Coyotes have been perennial playoff participants (just won the Pacific division) with a better player base than Atlanta/Winnipeg. Where Winnipeg would have been a sweetheart surprise to make the playoffs this season, a relocated Coyotes team would be expected to make them. Where the first move by TNSE was to replace the front office and coach with their team, the Coyotes have one of the best coaches in the league, and a GM who has done a masterful job.
Yotes have not been perennial playoff participants. Also, who says new owners would keep them, regardless of where the team is located?
Quote:
Originally Posted by MNNumbers
Very clear points. However, the question here is the $$$ amount the team is worth. In other words, how much $$ can an owner invest, given that he wants to make a profit after he buys. I am not just sure how playoff participation translates to franchise value.
If the discussion were, "How much are the Coyotes worth if they stay in Glendale?" then I would say a playoff run makes a difference. It would bring local interest, ticket sales, ad revenue, etc.
But, if they move, wherever they go, it's a new team. Past success won't necessarily mean future success, so the connection between on-ice success and $$ coming in breaks up. Now, it is also true that if they are good this year, they may be good next year, and that would help (at least in most markets). However, there is often lots of turnover in a couple years' time in non-O6 markets of playoff participation, so again, just because they are a div champ in '12 doesn't mean they will be in '13, and therefore, any claim to value as a relocated team again breaks down.
The value of a team is based upon its assets, earning potential, same as a stock. Components of that are value appreciation (or decline), annual net income/losses (not revenues). Players and other personnel under contract would be assets but it also depends on the contract. If a GM is under contract to the team and the team is sold, his contract may not be one of the assets sold. Players would presumably be covered depending on the CBA wording.
If the earnings potential in Quebec City is greater than in Winnipeg then the value of a team is greater. Look at the Leafs compared to the Stars. The difference in value is the assets and that value is based upon where the assets are located. A beach front property house in Yellow Knife is not worth the same as that same house on the beach in Florida.
Quote:
Originally Posted by squidz
Some quick numbers:
A playoff appearance is guaranteed a minimum of 2 games.
Assume sellouts for all playoff games (let's say 18,000 tickets).
Average ticket price is probably around $100/ticket (okay, so I'm using that for easy math, sue me).
Ignore for the moment any extra revenue from regional TV deals, parking, concessions, merchandise sales, etc.
So being swept in the first round of the playoffs is equal to 2 * 18,000 * $100 = $3.6MM in ticket revenue. So there's a minimum increased value of $3.6MM before you factor in any other revenue stream (and in QC that might be a pretty low average playoff ticket cost, but as I said, easy math). That figure can balloon pretty quickly: win the first round in 6, and lose the second round in 6 for 6 games, increase ticket price to $150 - 6 * 18,000 * $150 = $16.2MM in ticket sales.
Anyone know how many seats the proposed arena will have? MTS only has about 15,000 seats, so an 18,000 seat arena, selling out for every home game of a season would sell (18,000 - 15,000) * 41 = 123,000 more tickets. At even an average of say $60/ticket that's a flat $7.4MM in increased ticket sales. A quick google search tells me the average Jets ticket was $82, which would make for $10.1MM in additional ticket sales per year. So (neglecting time value of money) after a mere 6 years, a QC franchise playing in an 18,000 seat arena would pay back the additional $60MM in ticket sales alone. An arena the size of Bell Centre (21,000 seats) would do it in 3 years.
First, you have to deduct the revenues that go to the league. Second, you have to deduct the costs. I do not know how the NHL works but in baseball, most of the revenue from playoff ticket sales goes to the league.
