EDM revenue's exceed 80million ..

Discussion in 'Fugu's Business of Hockey Forum' started by Brent Burns Beard, Dec 6, 2004.

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  1. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    "Our gross revenues have exceeded $80 million. Now, if we cannot run a hockey team of 23 players, there's something drastically wrong here."
    (Edmonton Oilers chairman Cal Nichols, Toronto Sun, October 12, 2003)

    http://nhlcbanews.com/reaction/ownerquotes.html

    Indeed ...

    1) Seems to me there is plenty of revenue there to compete and make a profit.
    2) If EDM makes just average revenue, wouldnt that mean NHL revenues are closer to 2.4b ? 30x80,000,000 ?
    3) I thought this lockout was because EDM didnt make enough revenue ? Clearly they are no worse than average and if you are to believe the NHL, they are actually better than average.

    So ...... ?

    DR
     
  2. GabbyDugan

    GabbyDugan Registered User

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    I've never been able to pinpoint if Cal Nichols was referring to Canadian or US dollars, but apparently it was Canadian dollars. At an 83 cent exchange rate, it would have given the Oilers a solid $ 65 million US to work with in 2004-05.... and with a payroll in the low $30 million range, the Oilers were going to be profitable this season for sure..


    Also, this quote is from October of 2003, so it may include three home playoff dates from the 2002-03 season....(before the Heritage Classic, though)
     
  3. thedjpd

    thedjpd Registered User

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    Proof that one team makes a profit shows that the league is healthy?
     
  4. kerrly

    kerrly Registered User

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    2002-03 season, so now it doesn't look as fortunate with the lower exchange rate. Make it more like 70 cents. That puts it in $56 million US range. And just to note, there is no way the Oiler had $80 million US in revenues, GabbyDugan has it right, its Canadian currency. I'm not 100% positive what the avg. exchange rate for that season would have been, if anyone has a clue, please fill me in.
     
  5. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    of course not, but EDM is often cited as a team that needs a lockout to survive.

    dr
     
  6. kerrly

    kerrly Registered User

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    This is in CDN funds of course. As a fan of the Oilers and always well aware of where they stand fiscally, to make it easier for me to see what they're roster will look like the following season because they work on a money in money out system. There is no way the Oilers made $80 million US. In the 2002-03 season, I'm estimating the dollar was in the low 70's. So that puts the Oilers revenues in $56 million range. I think the Oilers turned a small profit this year if memory serves me correct of somewhere in the range of a million dollars. With a payroll of $31 million US that season, it shows that the Oilers had 55% of the revenues going directly to the players salaries and only turned a profit of 1 Million dollars.

    1. It doesn't seem so likely that there is plenty of revenue to compete there anymore. At least not to increase salary since the Oilers work on a strict budget on a money in money out system.
    2. If Edmonton makes just avg. revenue, that puts the leagues revenues in the 1.68 billion dollar range. Cleary by this number, its obvious that the Oilers are below avg.
    3. Do I need to reply to this point.

    So.......?
     
  7. Bicycle Repairman

    Bicycle Repairman Registered User

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    I see Nichols stole Hotchkiss' bit about the four chair legs. :shakehead
     
  8. SPARTAKUS*

    SPARTAKUS* Guest

    so if the oilers made a profit of 1 millions dollars, imagine now that there is a luxury tax system and the oilers receive 6 or 7 million dollars additional to be able to spend on players that's not a bad deal. that would improved the team gave them a better chance of making the playoffs and then who knows. let's say they go as far as the 3rd round that means a lot more revenues and a more profits doesn't it?
     
  9. correct me if im wrong, but from what i remember gross revenue doesnt mean profit. and even though they have a $80M revenue, that doesnt mean they are making money. their payroll is $31M last year? that leaves $49M for other expenses (salary for staffs, rink maintanence, travel expenses, etc) so maybe they are still losing money. besides, if the $80M is in Cdn then they have even less money to work with.
     
  10. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    i doubt "other" expenses for a hockey team are 49 million dollars. especially considering the owners cry that player expenses are the greatest expense.

    really, 49m for other expenses .. wow.

    dr
     
  11. Bruwinz37

    Bruwinz37 Registered User

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    Ok, so as long as Edmonton keeps developing talent and trading it off when they get too expensive and not being aggressive with free agents they can still scrape by with a slight profit? Gee, that is a healthy way to run a franchise and a great way to deliver quality to their fans.

    When will your spin ever end?
     
  12. Bruwinz37

    Bruwinz37 Registered User

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    Well when you consider things like payroll taxes, insurance, any debt the team might owe, electricity, trainers, meal money, travel expenses. That adds up quick smart guy.
     
  13. Pepper

    Pepper Registered User

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    First of all, that 80M is CDN. That translates to around ~54M USD (exchange rate was 0.672 in may 2003), give or take few millions.

    Player SALARIES were 31M, that's not the same as player costs. Where I live (Finland), to get the real cost of employing people you can multiple that figure by ~1.5 to get the all the costs (pension fees, social security costs, insurance yadayada).

    But since I don't know the canadian system, let's say the figure is only 1.3 (someone who knows this better, please correct me). That makes the player costs 40,3M USD total.

    Then you got the coach, assistant coaches, GM, arena leases, travelling, insurances, medical bills, arena staff, team staff, sales people, marketing people, hockey equipment, office equipment, etc to take care with the remaining ~13M USD and that's not much really.

    Fact is that during the last 5 years Oilers owners have had to insert new cash from their own pockets several times ($10M atleast once) to cover the losses.
     
  14. SENSible1*

    SENSible1* Guest

    The biggest reason Edmonton still has solid fan support is because they have bought into the promise of this CBA leveling the playing field. If they are forced to continue the old CBA pattern of being the farm team for the rich franchises, the support will vanish and the Oilers will fold.

    I'm sure that would make some posters here happy, but IMO it would be a significant loss for the league.
     
  15. Seachd

    Seachd Registered User

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    No kidding. It's really not that difficult to understand. I don't see why certain people have trouble with it.
     
  16. MarkZackKarl

    MarkZackKarl Registered User

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    What players has Edmonton developped? God damn people, dont talk about things you dont understand.

    :teach:
     
  17. Pepper

    Pepper Registered User

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    Well you could really take a look in the mirror, you're obviously very lost in this issue and have very little knowledge about the things you write here.
     
  18. MarkZackKarl

    MarkZackKarl Registered User

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    No, I have a very good knowledge of the economics of the league.

    My view makes the most sense, but feel free to continue your inconsistent and logically incoherent beliefs.
     
  19. Pepper

    Pepper Registered User

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    Well so far you have shown nothing to make you even half credible.

    And judging from your spelling & grammar, you sound like a teenager.

    How many years you have followed hockey? How old are you? Are you working in hockey business or in a business related to sports/hockey? What kind of education you have?
     
  20. YellHockey*

    YellHockey* Guest

    Instead of clouding the issue with insults, why don't you just name the players that Edmonton has developed?

    Or is that too difficult?
     
  21. GabbyDugan

    GabbyDugan Registered User

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    A couple of days ago, a credible hockey writer in Edmonton wrote that the Edmonton Oilers have made a profit of $ 8.7 million over the last six years (no link available since the story is on a pay subscription site). The writer works for a newspaper who is one of the owners of the team, and his figure is fairly close to the NHLPA's contention that the Oilers have made $ 9 million in profits in the last six years.

    The $10 million (the term "cash call" was used at the time) capital injection - why is it assumed it was used "to cover the losses"? The EIG is not a public corporation, so they don't have to disclose any of their financial transactions; when they choose to do so, they don't have to be always truthful unless it suits their purposes. Perhaps the money was used to send to the NHL to establish that $300 million "war chest". Perhaps the money was used to increase the owners equity-to-debt ratio on the team's balance sheet so that they could get a more favourable interest rate on their remaining mortgage on the team.

    When will "the spin" ever end? never. People believe "the spin", and buy into it so well that they get upset when their faith in "the spin" is put to the test.
     
  22. Pepper

    Pepper Registered User

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    No I didn't mention them because it's too easy for anyone who follows hockey to do that, apparently you don't fall in to that category.

    Gretzky, Kurri, Tikkanen, Messier, Lowe, Anderson, Fuhr, Moog, Ranford, McSorley, Smith, Gelinas, Beukeboom, Buchberger, Huddy, Van Allen, Arnott, Marchant, Smyth, Czerkawski, Grier, Satan, McGillis, Murray, Poti, Laraque, Brown, Brewer, Comrie, Horcoff, Markkanen, Hemsky

    Those for starters.
     
  23. Pepper

    Pepper Registered User

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    Each team has gotten 4x80M/26 in expansion fees during the last 6 years. That's 12M USD per team. That 9M is CDN which means around ~6M in USD. So without the expansion fees, it would have meant 1M USD loss per year even if we assume those numbers the journalist gave are correct.

    Healthy teams don't need cash injections from the owners.
     
  24. YellHockey*

    YellHockey* Guest

    Irrelevant. None of these players had anything to do with the Oilers during the previous CBA.

    Decent player. Traded for a better and more expensive player.

    Role player.

    Decent player.

    Developed by Boston.

    Role player.

    ,

    Good player that was traded because of the GM, not money.

    Role players. McGillis was developed by the Red Wings.

    Developed the the Islanders.

    Might be a decent player. Was not traded by Edmonton for financial reasons.

    Role players.

    Might be a good player.

    Then go on. Please.

    So far you've got four above average players, three of whom were traded for reasons other then financial.

    How does a team win with only four above average players, none of whom are stars?
     
  25. Pepper

    Pepper Registered User

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    Those are the players they have DRAFTED, they have made some good trades/signings on top of that.

    But you keep missing the point big time anyway so it's pretty useless to even have this argument with you.
     
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