The Capitals "will lose money this year despite having
the second-best regular season record in team history and
winning" the Southeast Division, according to Thomas Heath
of the WASHINGTON POST, who writes that team, league and
industry sources say that the loss will be $14-17M. The
deficit "reflects the league's economic situation," which
shows that "at least" 20 of the 28 teams lose money.
Capitals Majority Owner Ted Leonsis, on his belief that the
team is "moving in the right direction": "If we sold out
every game from now to the Stanley Cup, we still would not
make a profit. We're in the first year of a three-year
plan, and at the end of three years we should be earning a
profit." NHL Commissioner Gary Bettman, on Leonsis'
ownership: "Ted has had a spectacular rookie season. ... Ted
is committed to making the Capitals one of the NHL's premier
franchises" (WASHINGTON POST, 4/13).
THE NUMBERS: Experts said that the team's financial
situation has "improved over last year," when the deficit
"is estimated to have been well over" $20M. For this
season, total estimated operating costs are $50-55M, while
Leonsis invested "several million more" in the team's
"infrastructure." Experts estimate that gross revenue "will
be somewhere between" $35-40M, including between $15-20M
from general ticket sales, "more than" $10M from local and
national TV and radio, "about" $2M from the sale of
merchandise, $4M from advertising and sponsorships at games
and $1M "plus" from the Internet. Heath notes that Leonsis
has "broadened revenue streams" to include the Internet,
which now "generates more than" $1M (WASHINGTON POST, 4/13).
