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Old
11-25-2003, 09:29 AM
  #1
Oil_in_my_veins
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We're number 30!

As far as dollars go.
According to Forbes Magazine, "The Edmonton Oilers were last in the 30-team league, worth $91 million."

http://www.tsn.ca/nhl/news_story.asp?id=61924

too bad the Oilers don't go public and sell some stock. this would be a good investment. after the attention the Heritiage Classic drew and the continual rise in the standings, the value has to start climbing.

by the way the Rangers and Stars are 1 and 2 at $272 M and $270 M respectively.

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Old
11-25-2003, 09:47 AM
  #2
Digger12
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Quote:
Originally Posted by Joe Oilfan
As far as dollars go.
According to Forbes Magazine, "The Edmonton Oilers were last in the 30-team league, worth $91 million."

http://www.tsn.ca/nhl/news_story.asp?id=61924

too bad the Oilers don't go public and sell some stock. this would be a good investment. after the attention the Heritiage Classic drew and the continual rise in the standings, the value has to start climbing.

by the way the Rangers and Stars are 1 and 2 at $272 M and $270 M respectively.
Interesting to see that the average value of teams has actually decreased from the previous year. I wish I could remember how much the Oilers were worth when the current ownership group first bought them.

I wonder how Forbes calculates this sort of thing out...

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Old
11-25-2003, 09:57 AM
  #3
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I saw it on sportsnet this morning also, and missed some of the details so I waited for it to come on again and now someone's beaten me to it. D'oh.
1. Rangers-$272 mill.
2. Stars-$270 mill.
3. Maple Leafs-$263 mill.
4. Flyers-$252 mill.
5. Red Wings-$245 mill.

Average-$159 mill.

10. Canadiens-$170 mill.
19. Canucks-$125 mill.
21. Senators-117 mill.
28. Flames-$97 mill.
30. Oilers-$91 mill.

Does anyone know what the factors are that go into these numbers? How is Calgary ahead of us? Maybe ticket prices have something to do with it.

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Old
11-25-2003, 11:26 AM
  #4
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Does anyone know how the arena's factor into this.

The reason I was wondering is I find it interesting that the Senators are supposed to be worth $117 mil.

Didn't Melnyk buy both the Senators and the Corel Centre for $130 mil total? And he was the guy with the best offer. That right there should set the value of the franchise AND Corel Centre at $130 mil at the most.

If that $117 mil is only the franchise worth then the Forbes estimate has to be way too high because you can't honestly estimate the Corel Centre at only $13 mil. If the Corel Centre is part of the worth then that means the team depreciated by $13 mil in only 5 months.

I think a simple look at how the Senators are listed says alot on how accurately it should be viewed.

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Old
11-25-2003, 11:38 AM
  #5
theoil
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Quote:
Originally Posted by copperandblue
I think a simple look at how the Senators are listed says alot on how accurately it should be viewed.
I agree. A company's book worth is a factor of their annual profit margin and one of the biggest disagreements between the owners and nhlpa right now is agreeing on the numbers so it is not clear to me how Forbes or anybody else can have access to numbers that private companies don't divulge.

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Old
11-25-2003, 12:00 PM
  #6
oilers_guy_eddie
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I'd assume the Forbes estimates are based on a team's potential to generate revenue. It's a business magazine, not a sports magazine. So they'd look at things like arena capacity and potential TV market- which are two areas where Edmonton has to be close to last in the league. Things like the relative lack of corporate presense here as opposed to most other NHL cities probably factors in as well. And the Oilers' best assets-- a positive relationship with the fanbase and a shrewd management team-- are harder to quantify in a dollars and cents kind of way.

I'd also expect that the ownership group's debt load factored into the estimate. Anybody know offhand how the EIG are doing at paying off the debt they incurred when they bought the team?

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Old
11-25-2003, 01:17 PM
  #7
copperandblue
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Quote:
Originally Posted by oilers_guy_eddie
I'd assume the Forbes estimates are based on a team's potential to generate revenue. It's a business magazine, not a sports magazine. So they'd look at things like arena capacity and potential TV market- which are two areas where Edmonton has to be close to last in the league. Things like the relative lack of corporate presense here as opposed to most other NHL cities probably factors in as well. And the Oilers' best assets-- a positive relationship with the fanbase and a shrewd management team-- are harder to quantify in a dollars and cents kind of way.
That's a pretty interesting point actually. It's probably safe to assume that any team that is on the market is being sold because it's losing money. Now if you take the ownership of the arena out of the equation then isn't it safe to say that every team is worth the same amount?

For example if a guy in Texas was looking to buy a team and relocate them to Houston (a rumor that has been floated before) and the Oilers and Los Angeles were for sale, what makes the Oilers worth 92 mil less than Los Angeles. The teams are comparable on the ice and neither of them need to draw from the markets they are leaving so wouldn't the teams be worth the same? If anything wouldn't Edmonton be worth more because their costs are under more control and yet their performance has been marginally better on the ice (which is the end product)?

Quote:
Originally Posted by oilers_guy_eddie
I'd also expect that the ownership group's debt load factored into the estimate. Anybody know offhand how the EIG are doing at paying off the debt they incurred when they bought the team?
The chart says that Edmonton's debt value is 35. It doesn't say what the 35 represents though. In comparison to the other teams the Oilers debt value is quite low but without knowing what exactly that is, it's hard to tell whether that is good or bad.

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Old
11-25-2003, 01:49 PM
  #8
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Quote:
Originally Posted by copperandblue
The chart says that Edmonton's debt value is 35. It doesn't say what the 35 represents though. In comparison to the other teams the Oilers debt value is quite low but without knowing what exactly that is, it's hard to tell whether that is good or bad.
Without having seen it, my guess would be debt load as % of value (ie, $91m *35%= about $32 million.)

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Old
11-25-2003, 02:42 PM
  #9
Yosemite Sam
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Quote:
Originally Posted by copperandblue
For example if a guy in Texas was looking to buy a team and relocate them to Houston (a rumor that has been floated before) and the Oilers and Los Angeles were for sale, what makes the Oilers worth 92 mil less than Los Angeles. The teams are comparable on the ice and neither of them need to draw from the markets they are leaving so wouldn't the teams be worth the same? If anything wouldn't Edmonton be worth more because their costs are under more control and yet their performance has been marginally better on the ice (which is the end product)?
The Oilers are worth less because it has nothing to do with the team on the ice, but rather the market in which the team is located (mostly). Take two identical businesses for example. If you opened the exact same coffee shop in both Edmonton and LA, the LA venture would be worth much more.

For NHL teams, this means a bigger bunch of people to broadcast to, sell game tickets and merchandise to, etc... As someone mentioned, corporate sponsorships play into it also, and large cities have more companies that can step up to the plate...ummm... red line.

This is a simplistic explanation, but essentially correct.

Edit: Just re-read your post and realized I misunderstood. That being said, the concept is the same. If you have two identical cottages - one on primo lakefront property (LA), and one on some small, isolated lake 500 miles from civilization, (Edm), the LA property is worth much more, regardless of the fact you just want to move the cottage itself to your backyard.

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Old
11-25-2003, 04:41 PM
  #10
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I think the Oilers lose some net worth because the team has such a strong tie to the city. Potential buyers would likely be interested in moving the team to a larger market with a bigger, free arena and the Oilers will be very hard to pry out of here.

Even if they did move, with 5 cups under their belt (tied for 4th) and all they've gone through to stay in this city they will forever be remembered as "Edmonton's" whereas some of the other less established teams could be moved and assume a new identity a lot quicker. Who honestly remembers where the California Golden Seals and Colorado Rockies went?

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Old
11-25-2003, 08:41 PM
  #11
Walsher
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Quote:
Originally Posted by copperandblue
Does anyone know how the arena's factor into this.

The reason I was wondering is I find it interesting that the Senators are supposed to be worth $117 mil.

Didn't Melnyk buy both the Senators and the Corel Centre for $130 mil total? And he was the guy with the best offer. That right there should set the value of the franchise AND Corel Centre at $130 mil at the most.

If that $117 mil is only the franchise worth then the Forbes estimate has to be way too high because you can't honestly estimate the Corel Centre at only $13 mil. If the Corel Centre is part of the worth then that means the team depreciated by $13 mil in only 5 months.

I think a simple look at how the Senators are listed says alot on how accurately it should be viewed.
it doesn't matter what he bought them for - market value changes or may be different than purchase price.

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Old
11-25-2003, 08:45 PM
  #12
Yosemite Sam
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Quote:
Originally Posted by Oi'll say!
I think the Oilers lose some net worth because the team has such a strong tie to the city. Potential buyers would likely be interested in moving the team to a larger market with a bigger, free arena and the Oilers will be very hard to pry out of here.
Good point.

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