2003 Report on Islanders also disputes Forbes..
http://www.nytimes.com/2003/07/17/sports/hockey/17islanders.html?pagewanted=1&ei=5070&en=3979ccd6cf74854f&ex=1113883200&oref=login
Improving Islanders Still Losing Money
7/17/2003..
Since the 2000-1 season, they have poured in $53.5 million to cover
cash losses of $52.2 million, which peaked at $22.5 million last
season, documents that the team provided to The New York Times show.
Wang admits that owning a sports team is "crazy" and is not designed
to make money. To publicly reveal the extent of his losses may not be
crazy, but it is far from standard procedure in sports, where most
privately owned teams would rather lose on the field than show fans
and reporters their losses or profits.
"People see our revenues at $57 million and our payroll at $44
million, and want to know why we don't pay more for players. But we
have other expenses, most of them fixed. Players' salaries aren't our
only expense." (The $44 million includes salaries, bonuses, insurance
and pension payments.)
The Islanders' calculated loss of $19.5 million in 2001-2 is
considerably larger than Forbes's $4.5 million estimate. Part of the
discrepancy exists in the team's inclusion of $6.8 million in
interest to pay the debt to acquire the team.
Forbes excludes that
figure because it is tax deductible. Their calculations differ in
various other ways.
http://www.nytimes.com/2003/07/17/sports/hockey/17islanders.html?pagewanted=2&ei=5070&en=3979ccd6cf74854f&ex=1113883200&oref=login
(Page 2 of 2)
The financial documents the Islanders provided were audited by Ernst
& Young, except, as yet, last season's, McCarthy said, and are the
same statements the team submits to the league.
In the three seasons,
ticket revenues have swelled 134 percent to
$23.9 million;
luxury suite sales have jumped 45 percent (as the
number of unsold boxes has gone from 11 to 2) and
advertising and
sponsorship revenue has risen 59 percent.
Media revenue, bolstered by
a huge deal with Cablevision's MSG and Fox Sports New York,
increased
18 percent to $23 million.
Playoff revenue totaled $1 million last
season and $1.4 million in 2001-2. But
even though revenue has grown 64 percent since the final year of the Milstein ownership,
operating expense has expanded by 87 percent; player salaries, $15.5 million in 1999-2000, soared 150 percent to $38.8 million last season.
The league's lack of enormous national revenue also hurts.
The ABC/
ESPN and Canadian television deals barely bring each team about $6
million; at the opposite end, the National Football League's network
deal brings each team a yearly average of nearly $70 million.
The
nearly $900,000 the Islanders got last year from national
licensing "couldn't pay for a third-line player,'' McCarthy said.
The size of a payroll may be the primary difference between profits
and losses - and in some cases, between victories and losses - but
there are mundane fixed costs that never go away.
For the Islanders,
they include payments to help run the league office ($2.4 million
last season), $519,000 for player meals and lodging, $1.3 million for
scouting and $1.2 million on minor league operations.
Rent at the Coliseum rose to $2.5 million last year, based on paying
SMG, the landlord, 11 percent of net ticket revenue. The team gets
nothing from parking and concessions and pays SMG and the county 40
percent of its advertising income.