How many $ is McDavid worth?

[fancy dan]

about 9 years of sorrow?

 

[Fourier]

Some of the numbers being thrown around here are in my opinion way off as far as the franchise he goes to is concerned. For example, the way merchandising works in the NHL is that any licenced merchandise that is sold outside of a team owned store is split equally amongst all franchises. So if someone buys a McDavid crested Oiler jersey at Jersey City for example, the Yote's make as much off of that as do the Oilers.

The TV money is also way higher than it should be. The Canadian national contract has 11 more years to run, and McDavid will be just about 1/2 way through his career b te time the US deal is up. So at best there is the increment in to the local deal which could be fairly lucrative if the Oilers are winners but is limited by the size of the potential local audience. We are not talking about 10's of millions of dollars per year in incremental money.

For the Oilers my guess is that the biggest single way McDavid may impact the revenues is in the demand for as yet unpriced tickets in the new arena. The Oiler sent out a survey about what people would be willing to pay and got a lot of negative feedback. Euphoria about the potential with McDavid may give them more room on the pricing front, but it won't be $50 per ticket.

The next biggest impact comes if he helps the Oilers make the playoffs. That is a big win for the team but even this is tempered by the fact that playoff revenues trigger revenue sharing payments.

Don't get me wrong, this is worth a lot to the team. But just no where near some of the numbers being thrown around here.

 

[Mav3rick07]

A dozen Floyd Mayweathers

 

[MessierII]

Whatever he wants

 

[spaghtti]

McDavid is easily worth several billion to a franchise like Toronto.

They could jack up ticket prices after a season even as bad as this one. Like, a LOT. Let's say on average $25/seat/game. x20,000 seats, x40 games (rounded for ease of calculation) and that's a $20,000,000 increase in revenue per season, based just off of this season. Let's say over his career that McDavid ends up being worth $50/seat/game, on average. That's $40,000,000 per season, times 15 seasons for his prime, bringing the number to $600,000,000 just in ticket sales. Let's estimate an extra $100,000,000 in concession sales and prices.

We can't really estimate the increased value of a TV contract easily, but I suspect it'd be fair to suggest $100,000,000 on the low end. Total thus far $800,000,000.

How about jerseys? I'm going to suggest an easy 2 million jerseys over his 15 years, league-wide (remember all the Toronto ex-pats littering rinks across Canada and the US). $150 per jersey, $300,000,000. Total $1.1B.

McDavid-specific and general-boost-to-Leafs-sales T-shirts, bobbleheads, figurines, posters, keychains, ****whats - probably another billion all told.

Any given Cup (let's say 3) is probably worth another $100 million. Throw in another 10 ancillary playoff runs of various sizes, each worth $20 million, and were looking at a final grand total of $3 billion.

In Edmonton? Cut that by at least 80%, purely based on population.

I'm probably under-estimating the effect of McDavid on the Leafs (not accounting for inflation, under-estimating value of ticket hikes, low-balling TV deals and national TV revenue deal share), and under-estimating the % revenue lost by coming to Edmonton. Edmonton's population is ~1 million. The GTA is 6 million. The GTA total is only from Burlington-Oshawa and Toronto-Markham. Doesn't include Hamilton, Barrie, KiWa, London, Sudbury, Windsor (which is probably more a Red Wings town), Northern Ontario, Kingston, etc. The Oilers arguably have only 10-15% of the market reach that Toronto does.

I don't think the market size differential is that big between the two markets. Oilers fans extend beyond Edmonton city limits as well, being an Oilers fan living in BC the last eight years it has been cool to meet other Oilers fans living here.

 

[Soundwave]

Pretty sure the Canadian TV contract is what it is and will run for another 11 years, so him going to Toronto wouldn't have made any type of near term impact.

IMO it won't be hard to find 17,000+ in Northern Alberta willing to pay as much money at the gate as they would in Toronto to see this kid play in a shiny new arena. He will sell tickets at any price, the Oilers even recently had one of the highest ticket prices in the NHL as is.

So I don't think the revenue issue is really that huge.

Oilers will become the NHL's biggest Western market, they will basically become like Toronto/Montreal-West with a new arena + McDavid. They were already one of the league's top revenue teams, and that's with a bottom 5 club with no McDavid and a crappy old run down arena.

 

[Woodrow]

Pretty sure the Canadian TV contract is what it is and will run for another 11 years, so him going to Toronto wouldn't have made any type of near term impact.

IMO it won't be hard to find 17,000+ in Northern Alberta willing to pay as much money at the gate as they would in Toronto to see this kid play in a shiny new arena. He will sell tickets at any price, the Oilers even recently had one of the highest ticket prices in the NHL as is.

So I don't think the revenue issue is really that huge.

Oilers will become the NHL's biggest Western market, they will basically become like Toronto/Montreal-West with a new arena + McDavid. They were already one of the league's top revenue teams, and that's with a bottom 5 club with no McDavid and a crappy old run down arena.

Even though the TV contract runs another 11 years, McDavid in Toronto could have been a huge score for Bell and Rogers because they own the leafs, they share the regional TV rights and Rogers owns the national rights. They would have made a killing in advertising revenue with the increase in ratings.

 

[rosemount289]

You guys are....................???

Even though the TV contract runs another 11 years, McDavid in Toronto could have been a huge score for Bell and Rogers because they own the leafs, they share the regional TV rights and Rogers owns the national rights. They would have made a killing in advertising revenue with the increase in ratings.

You guys are putting the horse before the cart. McDavid has to become a superstar before that even happens.

You are right that McDavid will help sell the extra seats in the new arena (if he succeeds). But remember a shiny new "toy" will eventually becomes a "old" toy after a few years.

As for Toronto.....they sell out already and their ticket prices are about three times higher than the average NHL team. Yes, McDavid will sell a few more jerseys but there is a point of "Diminishing Return".

I remember the eighties Oilers (with Gretzky) after a few cups did not always sell out.

 

[DethOfDragnz]

 

[shoop]

Thanks, was waiting for some one to do some in-depth analysis. The more I think about the the dollar amount is pretty insane really.

If you were waiting for some solid in-depth analysis you probably should wait a while longer. Here's a point by point refutation of that analysis.

The fundamental problem is how much McDavid would 'grow' the Leafs fanbase. The Leafs have a monstrous (and painfully annoying) fanbase, but there just isn't that much room to grow. Definitely no room for growth in the billions of dollars.

Would the Leafs really raise ticket prices by $25 a seat because of McDavid? The demand already far outstrips supply. They could arguably raise tickets by far more than that amount with impacting demand. Raising ticket prices by that much for just one player seems insane.

Over his career McDavid could have been worth $50 extra a seat? The Leafs probably aren't raising ticket prices that much no matter what. Even if the Oilers traded McDavid to the Leafs for a fourth rounder.

McDavid worth an extra 2 million jerseys over his career. Omits people who would have bought jerseys regardless of the player on the jersey. Also ignores the cost of the actual jersey. If I sell you something for $150 it doesn't automagically mean $150 in my pocket. The jersey manufacturer takes a huge cut, retail outlet takes a little bit, cresting shop takes a bit.

What t.v. deals are enhanced by the Leafs getting McDavid? Rogers paid a buttload for national rights last year and are losing their shirts over the deal. How does Connor McDavid change the math on that one? Absolute best case it makes the deal break even for Rogers.

A billion dollars of memorabilia for one player? Uhhh, really? What's the value of all the Michael Jordan, Wayne Gretzky, Babe Ruth, Tom Brady, Jack Nicklaus and Muhammad Ali memorabilia ever sold? Adjust for inflation and it's nowhere near worth a billion dollars. Combined. But this kid who hasn't played a minute in the NHL projects to sell a billion in memorabilia on his own?

The only small sliver of credible guesstimation in this whole analysis is the impact on a playoff run. Say the Leafs gross $500 a seat over 20,000 seats per playoff game. (Factoring concessions, parking and swag sales into that $500 number.) $10 Million a game. Say McDavid is the difference of an extra five games a season over a 15 year career. (That's a huge if.) $750 Million. IF and only IF the huge difference comes in the number of playoff games.

 

[azashi]

I don't think the market size differential is that big between the two markets. Oilers fans extend beyond Edmonton city limits as well, being an Oilers fan living in BC the last eight years it has been cool to meet other Oilers fans living here.

I think you severely underestimate the size of Toronto. 6 million people within the city limits and immediate suburbs. Another million on the Niagara-Hamilton Niagara-Hamilton-Oakville corridor and the municipalities immediately adjacent. Another million in western Ontario (London. Kitchener/Waterloo, Windsor, etc.) Another million and a half in Eastern Ontario. Another million in northern Ontario, Ottawa excluded. That's a population ten times the size of Edmonton, that for the most part is as rabid per capita as Oilers fans. And for every Sens, Has, or Wings fan in the western, eastern, and northern parts of the province, there are way more out of province Leafs fans.

How many Leafs jerseys do you see here or in Calgary when the Leafs visit? Often they outnumber home fans.

Toronto is staggering in size. It truly is a world city.

 

[Comic Book Guy*]

Kobe!

 

[McGoMcD]

If you were waiting for some solid in-depth analysis you probably should wait a while longer. Here's a point by point refutation of that analysis.

The fundamental problem is how much McDavid would 'grow' the Leafs fanbase. The Leafs have a monstrous (and painfully annoying) fanbase, but there just isn't that much room to grow. Definitely no room for growth in the billions of dollars.

Would the Leafs really raise ticket prices by $25 a seat because of McDavid? The demand already far outstrips supply. They could arguably raise tickets by far more than that amount with impacting demand. Raising ticket prices by that much for just one player seems insane.

Over his career McDavid could have been worth $50 extra a seat? The Leafs probably aren't raising ticket prices that much no matter what. Even if the Oilers traded McDavid to the Leafs for a fourth rounder.

McDavid worth an extra 2 million jerseys over his career. Omits people who would have bought jerseys regardless of the player on the jersey. Also ignores the cost of the actual jersey. If I sell you something for $150 it doesn't automagically mean $150 in my pocket. The jersey manufacturer takes a huge cut, retail outlet takes a little bit, cresting shop takes a bit.

What t.v. deals are enhanced by the Leafs getting McDavid? Rogers paid a buttload for national rights last year and are losing their shirts over the deal. How does Connor McDavid change the math on that one? Absolute best case it makes the deal break even for Rogers.

A billion dollars of memorabilia for one player? Uhhh, really? What's the value of all the Michael Jordan, Wayne Gretzky, Babe Ruth, Tom Brady, Jack Nicklaus and Muhammad Ali memorabilia ever sold? Adjust for inflation and it's nowhere near worth a billion dollars. Combined. But this kid who hasn't played a minute in the NHL projects to sell a billion in memorabilia on his own?

The only small sliver of credible guesstimation in this whole analysis is the impact on a playoff run. Say the Leafs gross $500 a seat over 20,000 seats per playoff game. (Factoring concessions, parking and swag sales into that $500 number.) $10 Million a game. Say McDavid is the difference of an extra five games a season over a 15 year career. (That's a huge if.) $750 Million. IF and only IF the huge difference comes in the number of playoff games.

I agree, bottom line a number will be really hard to get, but I think it would be quite high, As in somewhere north of 100 million. Sure anything close to a billion is probably really reaching.