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.
Big picture: League-wide finances improved considerably since 2011. Teams operating at a loss dropped from 18 to 13, league-wide net profit jumped from $120M to $250M. Profit of the top teams didn't raise much, which means that the bottom 27 teams started to close the gap (which I think was always going to happen at some point, it couldn't have kept widening at that rate forever).
But then they won't get that billion dollar US TV deal owners were promised 10 years ago...Oh yeah and US based teams ticket sales will take a hit because they will have more teams from Canada coming to town. Ask any US owner and they will tell you they sell less tickets when a Canadian team comes to town.
Last season the hockey faithful filled arenas to 95.6% of capacity while delivering television rating increases to both national and local partners. They spent 25% more on jerseys and 41% more on hats, contributing to a 15% increase in overall merchandise sales. Over 4 million more fans followed their teams on Facebook in the last year for a total of over 14 million fans currently engaged on the social network. On Twitter, 3 million more fans followed their teams in the past year to bring the NHL fan universe there above 4.1 million.
Think it will be different this time though? Think again, again. Two-thirds of NHL teams reported zero season ticket holder cancellations. Granted, many teams never put that option on the table. But even among the few that did give fans an out, they only reported a handful walked away. To boot, the teams replaced them with fans on their waiting list. The Columbus Blue Jackets even reported that season ticket holders have gone up slightly since the start of the lockout.
So Forbes thinks fans will (continue) to flock back, even if there's a lost season.
Also interesting that the top six teams by value are the "Original Six".
That is funny. I don't think we'd see Detroit in that position if it weren't for their overwhelming success over the last 20 years. I also wonder what Chicago was ranked at a few years back as well.
I didn't know about the provision that teams in markets with more than 2.5 million households can't receive revenue sharing.
There's talk of removing market size limit for revenue sharing recipients (as the Islanders for one get none due to their market) in the CBA being negotiated.
The figures i guess include ALL REVENUES not just HRR..
If so, the Chicago case for example states:
REVENUES: $125 million
OPERATING INCOME : $20.9 million
ASSUMING approx. 70 million on salaries last year (they still had to pay Huet) to players --this leaves approx $55 million-the remaining operating income of $20.9 million --ie. it leaves approx $34.1 million to run all other expenses except interest,depreciation,amortization and taxes...
Now travel,insurance,minor leagues, coaching staff,all office staff and depts.including upto McD,hockey ambassadors,and any other hockey related expenses eat up this 34.1 million which one might think should be nearly about the same expense cost for everyteam (though it is possible some teams save on staff ,spend less on marketing, but otherwise a lot of the costs for the other expenses are nearly the same unless you share an ahl affiliate with another nhl team to halve that cost-- travel costs could be less for Eastern time zone teams that play mostly in closer proximity games to their most frewuent competitors in a dIvision of coNference...But allowing for some divergence in this category we PROBABLY get approx $25-$34 million reqiured to fund such expenses ...clubs spending at the max probably spend to the high end of this range...
so this means that a CAP team needs approx $105 million to just cover salaries and these other hockey expenses before any leftover for taxes,interest,amortization
and depreciation expense allocations...
At the bottom end though,you get NYI with just $66million in REVENUES
--even at the floor level of cap approxmationg payroll they still managed a remainder of $16million operating income --must have been some very cheap office overhead and maybe travel cost savings are mmuch much greater than i had assimed for certain teams in their Division in the Eastern Conference.. $66m-$48.3m = $17.7m remaining -$16 million in operating income--leaves only $1.7 million for minor leagues,coaches,travel,insur. and office staff and depts. expenses..
SO how did WANG get away so cheaply when Rocky Wirts had to spend approx $34.1 million for all that?
Can someone make sense of this wide apparent disparity...Maybe $10 million off I could fathom --but $32.4 million off on such apparent ''necessary" costs to run an NHL team? Accountants please explain!
I don't think there's any evidence the Leafs are an overly big draw in the States, maybe more than say Edmonton or Winnipeg because of their name and history but likely not more than Montreal. Those 2 have some name cache but other than their fan base making the trip to another arena, I doubt either is driving a lot of neutral fans to the arena.
The figures i guess include ALL REVENUES not just HRR..
If so, the Chicago case for example states:
REVENUES: $125 million
OPERATING INCOME : $20.9 million
ASSUMING approx. 70 million on salaries last year (they still had to pay Huet) to players --this leaves approx $55 million-the remaining operating income of $20.9 million --ie. it leaves approx $34.1 million to run all other expenses except interest,depreciation,amortization and taxes...
Now travel,insurance,minor leagues, coaching staff,all office staff and depts.including upto McD,hockey ambassadors,and any other hockey related expenses eat up this 34.1 million which one might think should be nearly about the same expense cost for everyteam (though it is possible some teams save on staff ,spend less on marketing, but otherwise a lot of the costs for the other expenses are nearly the same unless you share an ahl affiliate with another nhl team to halve that cost-- travel costs could be less for Eastern time zone teams that play mostly in closer proximity games to their most frewuent competitors in a dIvision of coNference...But allowing for some divergence in this category we PROBABLY get approx $25-$34 million reqiured to fund such expenses ...clubs spending at the max probably spend to the high end of this range...
so this means that a CAP team needs approx $105 million to just cover salaries and these other hockey expenses before any leftover for taxes,interest,amortization
and depreciation expense allocations...
At the bottom end though,you get NYI with just $66million in REVENUES
--even at the floor level of cap approxmationg payroll they still managed a remainder of $16million operating income --must have been some very cheap office overhead and maybe travel cost savings are mmuch much greater than i had assimed for certain teams in their Division in the Eastern Conference.. $66m-$48.3m = $17.7m remaining -$16 million in operating income--leaves only $1.7 million for minor leagues,coaches,travel,insur. and office staff and depts. expenses..
SO how did WANG get away so cheaply when Rocky Wirts had to spend approx $34.1 million for all that?
Can someone make sense of this wide apparent disparity...Maybe $10 million off I could fathom --but $32.4 million off on such apparent ''necessary" costs to run an NHL team? Accountants please explain!
I am guessing that the Hawks are repaying the loans they took from Wirtz Co during the 2000s. $40 mil alone for the 06 season.
As per the article, operating income is earnings before interest, taxes, depreciation and amortization.
So if a team has $10 million in operating income but has to pay $2 million in taxes, the actual profit is $8 million. If the team is paying off a loan and/or has substantial assets to depreciate, the profit is even lower. So you can't add up the operating income of all the teams to come out with the net profit for the league.
As per the article, operating income is earnings before interest, taxes, depreciation and amortization.
So if a team has $10 million in operating income but has to pay $2 million in taxes, the actual profit is $8 million. If the team is paying off a loan and/or has substantial assets to depreciate, the profit is even lower. So you can't add up the operating income of all the teams to come out with the net profit for the league.
Moreover you cannot get a net profit for the league at all, seeing these are 30 separate taxable entities. They will be taxed at a rate dependent on how the owner has the deductions and portfolio set up in general (which usually is the one that is most favorable to his overall holdings).
As per the article, operating income is earnings before interest, taxes, depreciation and amortization.
So if a team has $10 million in operating income but has to pay $2 million in taxes, the actual profit is $8 million. If the team is paying off a loan and/or has substantial assets to depreciate, the profit is even lower. So you can't add up the operating income of all the teams to come out with the net profit for the league.
So if a team has -$16 million in operating income, they lost more than $16 mil when you factor in interest, taxes, depreciation and amortization per Forbes?
“The Sun Belt has had plenty of time to prove that the viability doesn’t work.” Dorweiler thinks Quebec, where ground has already been broken for a new arena, will eventually get an NHL team, and he also thinks Portland, where minor league hockey is popular, and Seattle, where the city has approved a new arena, would be better cities to house teams than Arizona, North Carolina and Florida, where NHL teams are losing money.
Cool another article singling out my team because they are in the south even though they have an extremely healthy ownership situation and there are 8 teams with a worse operating income (including in New York, Buffalo, St. Louis and Columbus).
The Coyotes numbers seem rather odd though. According to Forbes, their revenue numbers are within $10m of 8 other teams. If this is right, the market is not as hopeless as we've been lead to believe.
Pierre LeBrun @Real_ESPNLeBrun
Quote from MLSE COO and prez Tom Anselmi on Forbes story listing Leafs as first billion-dollar hockey team: ``I'm intrigued by the
Pierre LeBrun @Real_ESPNLeBrun
evaluation and the recent MLSE acquisition clearly demonstrates the growing importance of all of our franchises to our fans...'' con't
Pierre LeBrun @Real_ESPNLeBrun
but I have no idea of how they came up with that number. '' end quote
Cool another article singling out my team because they are in the south even though they have an extremely healthy ownership situation and there are 8 teams with a worse operating income (including in New York, Buffalo, St. Louis and Columbus).
I think the revenue numbers are probably more significant here, as they are a judge of the relative strength of the market.
Escapes me how Keith ($8 mil) and Hossa ($7.9 mil) are not on that list.
It's a little bizarre. They acknowledge Crosby's getting paid $12M in actual dollars in each of the first three seasons of his newly signed deal, but then say he's the highest paid player at $12.7M, because his cap hit is $8.7M and his endorsements are $4M a year. His actual income per year is $16M including everything based on their figures.
It makes you think just how in-depth do the folks at Forbes really go.
Pierre LeBrun @Real_ESPNLeBrun
Quote from MLSE COO and prez Tom Anselmi on Forbes story listing Leafs as first billion-dollar hockey team: ``I'm intrigued by the
Pierre LeBrun @Real_ESPNLeBrun
evaluation and the recent MLSE acquisition clearly demonstrates the growing importance of all of our franchises to our fans...'' con't
Pierre LeBrun @Real_ESPNLeBrun
but I have no idea of how they came up with that number. '' end quote
This can't be too good for Forbes reliability, eh?
And yeah, if Coyotes only lost around 20 mi (before taxes etc, though) they are not doing THAT bad, when they get stability, their income will rise.
But on the other hand they won't always make the conference finals.
Another thing; Dallas Stars. They didn't make the playoffs, suffered in attendance and still turned profit and made more revenue than Minnesota, Buffalo.
