SBD/November 30, 2012/Leagues and Governing Bodies

NHL Lockout, Day 76: Which Side Stands To Benefit From Forbes' Release Of Team Values?

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Fueled by a 9% increase in overall revenue to $3.4B during the '11-12 season, the average NHL team is "now worth $282 million, 18% more than a year ago," according to Mike Ozanian of FORBES. The increase in revenue and value "speaks to the league’s ability to raise ticket prices an average of 5% last season." But the "spread between the rich and poor teams is dramatic." The five most valuable teams are worth $605M on average, while the five least valuable are worth just $145M on average. But the sport’s three most profitable teams -- the Maple Leafs, Rangers and Canadians -- "accounted for 83% of the league’s income, while 13 of 30 teams lost money, before non-cash expenses and interest payments" (FORBES.com, 11/28). FORBES' Chris Smith noted the Sharks were the "best team for the buck over the last seven seasons," generating 25% more "efficient player spending than the average team." The team also "hasn’t broken the bank to do it, averaging an annual payroll of $49 million, just beneath" the league average of $51M. The second-best team per dollar spent was the Red Wings. They were "ranked among the top ten teams in player spending in five of the last seven seasons." In perhaps the "least surprising outcome of all, the Toronto Maple Leafs ranked dead last" with 23% "worse than the average team." While the Maple Leafs have "ranked among the top 12 in player costs in five of the last seven seasons," the team has "failed to make the playoffs even once in that time" (FORBES.com, 11/28). In Montreal, Pat Hickey noted the NHL has "estimated that as many as 18 teams are losing money, but 13 is a significant number and so are the total losses" of $123.3M. With the exception of the Sabres and Islanders, the "other losing teams are all in markets where you are unlikely to find a frozen pond." It is "interesting to note that each of the seven Canadian-based franchises made at least" $11M (Montreal GAZETTE, 11/29).
TEAM
CURRENT
VALUE
1-YR
% +/-
DEBT/
VALUE
REVENUE
OPERATING
INCOME
Maple Leafs
$1B
92%
16%
$200M
$81.9M
Rangers
$750M
48%
0%
$199M
$74M
Canadiens
$575
29%
50%
$169M
$51.6M
Blackhawks
$350M
14%
0%
$125M
$20.5M
Bruins
$348M
7%
32%
$129M
$14.2M
Red Wings
$346M
3%
0%
$128M
$20.8M
Canucks
$342M
14%
29%
$143M
$30.4M
Flyers
$336M
16%
19%
$124M
$10.9M
Penguins
$288M
9%
35%
$120M
$9.1M
Kings
$276M
19%
51%
$120M
$1.8M
Capitals
$250M
11%
52%
$106M
$-1.0M
Flames
$245M
11%
13%
$117M
$11M
Stars
$240M
4%
62%
$100M
$3M
Oilers
$225M
6%
44%
$106M
$16.2M
Sharks
$223M
6%
0%
$101M
$-0.9M
Senators
$220M
9%
59%
$113M
$14.5M
Wild
$218M
2%
52%
$99M
$-3.9M
Avalanche
$210M
6%
11%
$91M
$4.5M
Devils
$205M
13%
112%
$122M
$2.8M
Jets
$200M
22%
65%
$105M
$13.3M
Ducks
$192M
4%
34%
$91M
$-10.8M
Sabres
$175M
1%
46%
$95M
$-10.4M
Lightning
$174M
0%
26%
$88M
$-13.1M
Panthers
$170M
5%
59%
$87M
$-12M
Predators
$167M
2%
51%
$88M
$-3.4M
Hurricanes
$162M
-4%
68%
$85M
$-9.4M
Islanders
$155M
4%
65%
$66M
$-16M
Blue Jackets
$145M
-5%
69%
$85M
$-18.7M
Coyotes
$134M
0%
26%
$83M
$-20.6M
Blues
$130M
-17%
46%
$89M
$-10M
           

DOUBLE-EDGED SWORD: In Columbus, Aaron Portzline wrote what Forbes concludes is what the NHLPA "has been trumpeting since Day 1 of the NHL lockout ... that revenue sharing is an absolute must to get the NHL healthy and thriving, to avoid having lockouts every eight seasons" (DISPATCH.com, 11/28). The GLOBE & MAIL's David Shoalts wrote while the "accuracy" of Forbes' numbers "can be either questioned or cited by NHL commissioner Gary Bettman, the owners and managers depending on the point they are trying to make, the figures generally serve as a ballpark indicator of the NHL’s financial condition" (GLOBE & MAIL, 11/29). In N.Y., Mark Everson wrote Forbes' estimate "vividly demonstrates why the owners have put such faith" in Bettman. When he became NHL Commissioner in '93, a franchise "could be bought for some $40-50 million" (N.Y. POST, 11/29). In Montreal, Stu Cowan wrote, "If I was a player I'd have two words on my lips for the owners after reading the Forbes report: revenue sharing." If it came down to a "players' vote on a take-it-or-leave-it offer they would accept because the majority would want to play hockey (and get paid) ... but the Forbes report might help make that vote very close" (MONTREALGAZETTE.com, 11/28).

ACCURACY IN QUESTION: The GLOBE & MAIL's Shoalts in a separate piece notes both MLSE President & COO Tom Anselmi and former President & CEO Richard Peddie "questioned the accuracy" of Forbes' numbers, as "NHL executives do every year." Peddie "wondered about 'the huge inflation' in the Leafs' value from a year ago." But the "disparity in value between the top and bottom clubs drives home one of the key points" NHLPA Exec Dir Donald Fehr and his negotiators have made throughout the lockout. Peddie would "like to see the NHL move toward the NBA’s system, which has each club contribute 50 per cent of its annual revenue, minus some expenses, into a pool." He said, “(The NBA) is proving the whole league can make money." But Peddie added that the NHL "cannot afford that type of system ... until it, too, turns a collective profit" (GLOBE & MAIL, 11/29).

MARKET WATCH: In Ft. Lauderdale, Craig Davis notes the Panthers, "not surprisingly among the lower echelon, nonetheless moved up two spots in 2012 to 24th with a slight increase in value" to $170M. Forbes attributed that to "better performance by the team that produced the first playoff appearance" since '00. Forbes stated that despite a 6% boost in attendance, the Panthers ended $12M in the red, because the team’s "gate receipts were among the league’s lowest due to huge giveaways of tickets." The Panthers also "ranked last in local television audience with just 13,400 viewers per game" for '11-12. Forbes noted that the Panthers "will benefit from a more lucrative cable deal beginning this year along with the 10-year extension on the naming rights deal with BB&T that is expected" to net the team $37M (SUN-SENTINEL.com, 11/28). In L.A., Helene Elliot noted Forbes stated that the Ducks' "operating loss of $10.8 million was the league's fourth-largest last season and attributed that to the team's failure to make the playoffs and the lack of an NBA co-tenant at the Honda Center" (LATIMES.com, 11/28). In California, Eric Stephens wrote beyond what Ducks Owner Henry Samueli "says publicly about his sports business -- and that's a rarity -- we won't truly know how the club does on the bottom line." It certainly is "well above" the $75M that the Samuelis paid in '05 when they bought the team, "but that doesn't take into account how much they've spent or made in revenue over the last seven years" (OCREGISTER.com, 11/28).

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