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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

Panther's arena had net income of ~$90mm from 1998-2008

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Old
12-14-2012, 11:11 AM
  #76
Marchessault Good
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The arena doesn't pay player salaries..

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12-14-2012, 11:18 AM
  #77
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Quote:
Originally Posted by Gudbranson4Prez View Post
The arena doesn't pay player salaries..
I wasn't speaking to the arena but rather the poster's claim the team was "exaggerating the panthers losses (which) also benefits the organization thru NHL revenue sharing". If true that would mean they are essentially under-reporting HRR. The player's salaries are directly tied to a percentage of HRR. The arena is near moot at that point.

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12-14-2012, 11:19 AM
  #78
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Originally Posted by Gump Hasek View Post
This is a business board.

I repeat; you claimed earlier that "it's all creative accounting. making the panthers a loss leader. it hasn't even been mentioned here that exaggerating the panthers losses also benefits the organization thru NHL revenue sharing." That speaks directly to incredibly unethical behavior on their part if your claim is true. The net result of that behavior is that the players receive less money at the end of the day because their salaries are tied to a percentage of league HRR. Another result is that the franchise would be essentially stealing revenue sharing money from other league partners; of course you are aware of this because you claimed it to be a "benefit". That isn't a benefit, it is theft/fraud.

Apparently it would surprise you to know that many in the business world value ethical behavior quite highly, near above anything else in fact. So, yeah, I think it to be a rather compelling point actually, given that ethical behavior of counter-parties in business is pretty much vital. Then you said "do you really think the nhl and cliff viner are at all interested in how their business model affects the players?". I would hope they would be as theft is always the less preferable option, and especially when your claims speak to the additional stealing of money from other owners as well.

Leases are designed to be broken, FYI, there is always an out, so I'm not that impressed with your claim that the lease keeps them tied to that market. I won't even address the balance of your post as it amounts to little more than an emotional plea. Emotions hold no sway in business discussions. The bank doesn't care how many games the team won or lost.
Losses have nothing to do with it. It's total revenue. If it were whether the team makes or loses money everybody could hide profits. ie. I bought the team for a billion, I'll be paying that loan off for 20 years before I make a profit.

Mind you it may be just as easy for a team like the Leafs to say, we can't sell local broadcast anymore we have to give away the telecasts. Rogers and Bell broadcasting benefit. Rogers and bell team owners now generate the least amount of local broadcast revenue in all the NHL.

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12-14-2012, 11:23 AM
  #79
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Originally Posted by Krishna View Post
I don't understand the point of this.

They are seperate entities owned by the same people. The panthers lost money. The arena made money. The arena's money shouldn't matter if it's not part of the HRR.
The arena money is included in HRR if the building owners are also team owners.

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12-14-2012, 11:26 AM
  #80
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Originally Posted by Stix and Stones View Post
Losses have nothing to do with it. It's total revenue. If it were whether the team makes or loses money everybody could hide profits.
They would be essentially under-reporting HRR if true; the player salaries are tied to HRR, as is revenue sharing money.

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12-14-2012, 11:36 AM
  #81
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Originally Posted by Gump Hasek View Post
They would be essentially under-reporting HRR if true; the player salaries are tied to HRR, as is revenue sharing money.
They're not hiding anything they aren't making a profit until they payoff their loan.

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12-14-2012, 01:15 PM
  #82
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Originally Posted by Stix and Stones View Post
They're not hiding anything they aren't making a profit until they payoff their loan.
Try telling the taxman you can`t pay any taxes till you finish paying off your loans first.Doesn`t work that way.

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12-14-2012, 01:30 PM
  #83
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Originally Posted by pondnorth View Post
Try telling the taxman you can`t pay any taxes till you finish paying off your loans first.Doesn`t work that way.
I would think the interest paid on the loan to buy the business is tax deductable. The interest payments being paid back would cut the profits of the company.

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12-14-2012, 01:35 PM
  #84
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Originally Posted by CanadianHockey View Post
The arena money is included in HRR if the building owners are also team owners.
really? could you provide details?

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Old
12-14-2012, 11:11 PM
  #85
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Originally Posted by CanadianHockey View Post
The arena money is included in HRR if the building owners are also team owners.
Only partly true.

Revenues collected by a Club Affiliated Entity are included in HRR only if they are directly related to an NHL game - ie parking and concessions on game days. Arena generated revenues for other events are NOT included in HRR.

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Old
12-15-2012, 02:42 AM
  #86
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Quote:
Originally Posted by Gump Hasek View Post
This is a business board.

I repeat; you claimed earlier that "it's all creative accounting. making the panthers a loss leader. it hasn't even been mentioned here that exaggerating the panthers losses also benefits the organization thru NHL revenue sharing." That speaks directly to incredibly unethical behavior on their part if your claim is true. The net result of that behavior is that the players receive less money at the end of the day because their salaries are tied to a percentage of league HRR. Another result is that the franchise would be essentially stealing revenue sharing money from other league partners; of course you are aware of this because you claimed it to be a "benefit". That isn't a benefit, it is theft/fraud.

Apparently it would surprise you to know that many in the business world value ethical behavior quite highly, near above anything else in fact. So, yeah, I think it to be a rather compelling point actually, given that ethical behavior of counter-parties in business is pretty much vital.
This is like the difference between tax avoidance and tax evasion. It is expected that businesses will do their best to maximize their profits *WITHIN THE LIMITS OF THE LAW*, including contract law as well.

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Originally Posted by Gump Hasek View Post
Leases are designed to be broken,
Now, about your rant about ethics... pot... kettle... black.

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Old
12-15-2012, 06:32 AM
  #87
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Originally Posted by CanadianHockey View Post
The arena money is included in HRR if the building owners are also team owners.
There's no way in hell that things like concerts and shows at that arena count as *hockey* related revenue.

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Old
12-15-2012, 08:13 AM
  #88
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Originally Posted by CanadianHockey View Post
The arena money is included in HRR if the building owners are also team owners.
No it's not. Could people please stop repeating this myth?

Only the revenues directly linked to hockey operations is included in the HRR.

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Old
12-16-2012, 01:52 PM
  #89
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I think it was mentioned earlier that fiscal year for Arena Operating company (SSE, Sunrise) ends at 9/30. Has anybody seen what kind of profit they made, it was mentioned during playoffs that profit would be >$20 million, but i haven't seen anything yet. If profit would be so high, I think county would have mentioned something also, because they would be getting their cut also.
Maybe fiscal year ends at the end of calendat year?

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Old
12-16-2012, 02:46 PM
  #90
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Quote:
Originally Posted by CanadianHockey View Post
The arena money is included in HRR if the building owners are also team owners.
Only a portion of luxury box revs are added to HRR, but mostly no.

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Old
12-16-2012, 06:08 PM
  #91
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Originally Posted by jol View Post
I think it was mentioned earlier that fiscal year for Arena Operating company (SSE, Sunrise) ends at 9/30. Has anybody seen what kind of profit they made, it was mentioned during playoffs that profit would be >$20 million, but i haven't seen anything yet. If profit would be so high, I think county would have mentioned something also, because they would be getting their cut also.
Maybe fiscal year ends at the end of calendat year?

JOL
As far as I know, those numbers aren't actually made public directly. All we have is one report by the Broward County auditor for 1999-2008.

That said, unless the year-end date has changed (those things rarely ever do without good reason, and 9/30 is certainly a more reasonable date than 12/31), I doubt we would know about the actual numbers this early. AOC likely has 6 months to disclose its financial statements to Broward County i.e. they likely have until March 31, 2013 to disclose the FY 2012 numbers.

edit -- some of that "20 million profit" figure (not sure where that's from really) would accrue in AOC's books through food and merch sales, but the majority of that revenue was likely from individual tickets, which are in the Panthers' books not AOC's.

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Old
12-16-2012, 08:46 PM
  #92
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Originally Posted by Pepper View Post
No it's not. Could people please stop repeating this myth?

Only the revenues directly linked to hockey operations is included in the HRR.
Exactly. If Roger Waters or the Monster Truck Show or whichever Cirque du Soleil event is performing at arena X, the players derive no benefit from ticket revenues, concession revenues, parking or merchandise sales for that event. In other words, it is not included in HRR.

I believe during the early part of negotiations, the NHLPA wanted to expand the meaning of HRR to include revenues from such events like Monster Truck shows and concerts. Laughable.


Last edited by blueandgoldguy: 12-16-2012 at 08:47 PM. Reason: spelling
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Old
12-16-2012, 10:01 PM
  #93
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Originally Posted by Patofqc View Post
Hockey in Florida does not make sense, and its been a failure in my humble opinion.
Tampa Bay says "What the...?!?"


Last edited by leesmith: 12-16-2012 at 10:07 PM.
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Old
12-16-2012, 10:23 PM
  #94
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Originally Posted by Stix and Stones View Post
Interesting, since Rogers / Bell just paid 1.6 billion for MLSE and haven't played a game yet. The debt payments must be huge and with no income coming in. MLSE should probably collect rev sharing until they payoff their loan. They'll be in the red for quite sometime.
Both BCE and Rogers financed their investment in MLSE with cash on hand.

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Old
12-17-2012, 12:07 AM
  #95
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Originally Posted by leesmith View Post
Tampa Bay says "What the...?!?"
Florida says "what the...?!?"

You've seen the empty images of the BankAtlantic Center... but what about these?

http://www.rattrick.com/images/rattr...ice2_large.jpg
http://i.ytimg.com/vi/7OY4k5tMSik/0.jpg


What about these?

http://concede330.files.wordpress.co...pg?w=600&h=450
http://3.bp.blogspot.com/-82-Vq2BWFF...0/P1360519.jpg

And the same can be done for the Marlins.

It's not a matter of hockey not fitting in Florida. That's just not true. It's a matter of sports not fitting in Florida. Other than the Dolphins, none of the other three major NA teams have had an easy time filling seats for loser teams. Hell, just two years after the Heat won the NBA championship, still with Shaq and Wade on their team, the place was a ghost town for the last place Heat. Same goes to the Marlins, who in 1997 were 11th in attendance.

Winner teams, particularly playoff teams, produce results here. People show up for them. It's a bandwagon town, because it's a transplant location. The only thing people should be concerned about is fielding/icing a winning team, and that's how a business will succeed here. It's entirely possible, but it's definitely not the sport that is failing the town. It's the people (and the ownership for the Marlins/Panthers hasn't helped).

But failing isn't even the right word, because the Panthers really aren't in that alley anymore.

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Old
12-17-2012, 03:09 AM
  #96
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I would think the interest paid on the loan to buy the business is tax deductable. The interest payments being paid back would cut the profits of the company.
Interest costs are tax deductible, while the carrying charges absolutely impact profitability.

IMO debt plays a significant factor in the economic picture of the NHL.

Though I realize Forbes published financial info may not be 100% accurate, it does provide at least provide some indicators as to the financial health of the league.

According to the latest update, the 30 NHL franchises owe ~$2.7B, the cost of serving this debt prohibitive to achieving profitability for many franchises.

IMO this has occurred because many NHL owners are in the equity business, where increases in franchise values offers a greater financial return by leveraging the equity in their franchises for other investment.

Its really not hard to understand their thinking when a 30 team league generates net only $250M EBT, or an average of $8.3M EBT per team, while at the same time the have seen double digit growth in their equity.

Therefore simple strategy, drive player cost down with significant inhibitors to control salary growth. The end result, a small increase in profitability with an exponential increase in franchise value.

IMO only one thing will change this condition, a significant increase in central revenue, which translated means a very meaningful TV contract from a mainstream network.

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12-17-2012, 03:25 AM
  #97
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Originally Posted by Dr Beinfest View Post
Florida says "what the...?!?"

You've seen the empty images of the BankAtlantic Center... but what about these?

http://www.rattrick.com/images/rattr...ice2_large.jpg
http://i.ytimg.com/vi/7OY4k5tMSik/0.jpg


What about these?

http://concede330.files.wordpress.co...pg?w=600&h=450
http://3.bp.blogspot.com/-82-Vq2BWFF...0/P1360519.jpg

And the same can be done for the Marlins.

It's not a matter of hockey not fitting in Florida. That's just not true. It's a matter of sports not fitting in Florida. Other than the Dolphins, none of the other three major NA teams have had an easy time filling seats for loser teams. Hell, just two years after the Heat won the NBA championship, still with Shaq and Wade on their team, the place was a ghost town for the last place Heat. Same goes to the Marlins, who in 1997 were 11th in attendance.

Winner teams, particularly playoff teams, produce results here. People show up for them. It's a bandwagon town, because it's a transplant location. The only thing people should be concerned about is fielding/icing a winning team, and that's how a business will succeed here. It's entirely possible, but it's definitely not the sport that is failing the town. It's the people (and the ownership for the Marlins/Panthers hasn't helped).

But failing isn't even the right word, because the Panthers really aren't in that alley anymore.
The number of people in attendance is just atmosphere, unless the people in attendance paid NHL prices making the franchise viable.

With both Florida teams in the bottom third of the league in revenues, it would seem by the pictures lots of people attend but not at the price required to support NHL hockey.

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Old
12-17-2012, 08:18 AM
  #98
jol
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Originally Posted by Dr Beinfest View Post
It's not a matter of hockey not fitting in Florida. That's just not true. It's a matter of sports not fitting in Florida. Other than the Dolphins, none of the other three major NA teams have had an easy time filling seats for loser teams. Hell, just two years after the Heat won the NBA championship, still with Shaq and Wade on their team, the place was a ghost town for the last place Heat. Same goes to the Marlins, who in 1997 were 11th in attendance.
Also for Dolphins very challenging, they have lost 20000 season ticket holders since 2006, there might be two reasons:
- team sucks
- economy, real estate, main industry in South Florida collapsed at 2006

JOL

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12-17-2012, 10:00 AM
  #99
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Also for Dolphins very challenging, they have lost 20000 season ticket holders since 2006, there might be two reasons:
- team sucks
- economy, real estate, main industry in South Florida collapsed at 2006
South Florida is a place where people live but nobody is from. Too many people there have either no particular interest in U.S. pro sports or loyalty to other teams. Success can cover that up (people love a winner) but there's no culture of hometown loyalism. It's the same issue places like Arizona and L.A. have but much worse.

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Old
12-17-2012, 10:59 AM
  #100
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Aside from the fact that the article is really misleading and written by someone with no finance experience, would you consider an annual pre-tax return of $6.5 million on a risky investment totaling hundreds of millions of dollars fair and sufficient?

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