Leafs led league in regular season revenue

Discussion in 'Fugu's Business of Hockey Forum' started by mudcrutch79, Dec 10, 2004.

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  1. mudcrutch79

    mudcrutch79 Registered User

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    By $18 million, if the numbers the NHL gave the NHLPA and wants to have kept confidential are to believed. The NHLPA acknowledges in their proposal for revenue sharing that an 18 million dollar gap in revenues would exist between Team #1 and Team #2. Although they don't tell us who either team is, they do tell us that the team with the greatest revenue pays the most revenue sharing. A review of the teams reveals that Toronto would share the most revenue.

    This isn't consistent with Forbes at all, unless Forbes is equating massive dollars to a TV contract that the Rangers are keeping off the books-Forbes has the Leafs a million behind the Rangers in revenue. The Forbest list includes playoff dollars as well, I believe, which should have increased the league's gap.

    Unless you think that the NHL is lying about revenues in confidential information given to the players-and I for one have a hard time believing that, there are labour laws in place to punish employers for doing so-the Leafs have a lot more money than was previously thought.
     
  2. mudcrutch79

    mudcrutch79 Registered User

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    Not generallly one to bump my own threads, but I'm curious if it's a surprise to people that the Leafs have the greatest revenue streams in the league.
     
  3. Not at all. They have the highest ticket prices. They have 100% capacity for every game. They are consistently near the top in merchandise sales. They have their own television station, which was to start televising games this year. Don't be surprised either when LeafsTV becomes the home of all Toronto Maple Leafs games. I have no doubt that they are going to cut loose the other Canadian teams and go out on their own once the current TV contracts expire.
     
  4. Tom_Benjamin

    Tom_Benjamin Registered User

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    Not to me.

    I think this section of the player proposal was the most interesting part of all - the revenue sharing.

    The first point to make about it is that the owners have proposed a whopping $65 million in sharing. This is in a league where the top team (Toronto) has $76 million more in revenue than the bottom ranked team (probably Nashville). The players ran out a proposal based on that but they would like to see more than twice that amount. It is still, of course, a pittance.

    That is the reason the luxury tax is so low in this proposal. The owners don't want to share revenues. Since the players used the owner formula for revenue sharing, the only thing that changes in the player proposal is the amount.

    Furthermore whether we use the owner's number or the player's number, Canadian teams are a net loser. Toronto, Montreal and Vancouver contribute, while Calgary and Ottawa pick up a few million. Edmonton doesn't contribute or benefit. Under the players plan Canadian teams send $17.9 million south and get $6.3 million back.

    (Which says something about revenues, doesn't it? How can Calgary have revenues that low? When is the fiscal year cutoff anyway? The players don't explain the formula for distribution the owners designed so more than just revenues go into the calculation for the welfare recipients.)

    While the report does not include revenue numbers it does tell us the top 10 revenue teams and the bottom ten based on their revenue sharing:

    1) Toronto
    2) Dallas
    3) Colorado
    4) Detroit
    5) Philadelphia
    6) Rangers
    7) Montreal
    8) Boston
    9) Minnesota
    10) Vancouver

    The five teams that get most - more than two thirds - of the money are Phoenix, Washington, Buffalo, Atlanta and Nashville.

    Tom
     
  5. mudcrutch79

    mudcrutch79 Registered User

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    The proposal says that the revenues are 2003/04 regular season revenues. That makes sense to me then, seeing Calgary so low. If the NHLPA suspects that the NHL has failed to produce honest information, they've got a great case for an unfair labour practices complaint. For that reason, I'm inclined to trust the numbers upon which this is built.

    Question for you Tom-you've criticized Oiler fans pretty consistently, saying that the revenues would come when the winning came. Looking at the other teams that aren't getting or giving revenue sharing dollars, there are two teams there where no one comes to watch the team play-Chicago (doesn't even televise local home games for god's sake) and New Jersey. There's a terrible team-Columbus. And there's the poster child for mismangement in the NHL since about 1990-St. Louis. Does seeing Edmonton, with close to 100% capacity-in that group make you wonder at all how much more room there is in Edmonton to squeeze revenues, or do you still think that they'd be able to jack ticket prices enough and squeeze enough money out of TV that it'd all be worthwhile?
     
  6. mooseOAK*

    mooseOAK* Guest

    The company that owns the Rangers also owns the TV rights so that may be why that number is difficult to get.
     
  7. Tom_Benjamin

    Tom_Benjamin Registered User

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    That's last year, isn't it? We don't really know what it means that Calgary would qualify for $4.7 million in welfare. Tampa also qualified for $1 million. It may be that the revenue sharing formula only applies to regular season revenues.

    The players were pretty careful in this regard, usually qualifying them as reported revenues. These numbers are taken directly from the UROs. I wasn't really doubting these numbers but the fiscal year end is a really important date. Most teams set it up so a playoff run is spread over two years. I don't know how the NHL does it for the URO.

    I can't really comment without knowing the formula or actually seeing the revenues. Chicago, for one, doesn't get any revenue sharing because of their market size. About the only thing I would say for sure is that Edmonton is in the top 15 revenue generating teams right now.

    But in general, I would say that the results here confirm my views rather than contradict them. Edmonton as an NHL market is vastly underestimated. The more they make with a mediocre team, the more they can make with a really good one.

    If we take Nichols at his word, Oiler revenues are about $68 million US at current exchange rates. Add $15 a ticket to bring the price up to the NHL average and you add $12 million in revenue assuming you don't lose attendance. Add six to 10 playoff games a year and you've got another $10 million. How can revenues not go up significantly with a winner?

    Even if they don't win, the Oilers are an excellent business right where they are. Particularly after payroll is cut by 24%. How many Edmonton fans would have believed last week that their team would not qualify under any revenue sharing plan? If these numbers halfway reflect where the Edmonton Oilers are as a business, what does it say about the story the fans have been fed?

    Tom
     
  8. Volcanologist

    Volcanologist Used Register

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    What is your point here?

    Nobody ever thought of the Leafs as anything but one of the very richest teams, whether it be #1, 2 or 3. I'm not seeing deceit, or if there was, what the point in it was where the Leafs' numbers are concerned.
     
  9. mudcrutch79

    mudcrutch79 Registered User

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    I'm stunned to find out that they're 20 million in revenue ahead of #2. That's shocking, to me at least. The way it's portrayed, I figured that there'd be 4/5 American clubs ahead of them. To find out that they're a) leading and b) leading by so much is mind boggling to me.

    I'm an Oilers guy, and this thing makes me suspect we've been fed a bit of a line as well...but Leafs management has always seemed to me to imply that they were a weak sister compared to US clubs.
     
  10. Volcanologist

    Volcanologist Used Register

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    Really?

    I was always under the impression the Leafs were right at the top with Detroit and maybe 1 or two others in revenues. It doesn't suprise me that some would say they're in front, but I suppose leading by that much is somewhat new.

    Interesting.

    I never got that impression...do you have some specific comments in mind? Are they recent?

    The only thing I remember Peddie saying about the $18 million figure was sort of a half-denial; he just said that Forbes didn't have access to their books and that they didn't have the real numbers. He never denied they're rolling in it, though.
     
  11. mooseOAK*

    mooseOAK* Guest

    By the time you get to the bottom line the US teams will be closer to the Leafs because of much lower taxes in the States.

    As far as revenues go, the Leafs have the largest TV audience of any team so they reap the benefits of that.
     
  12. mudcrutch79

    mudcrutch79 Registered User

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    That's what the offer says-at the very least it says the information in the proposal is based on regular season revenues. That explains the seeming disparity in my mind.

    As I said above, the NHLPA says the numbers are based on 2003/04 regular season. The fiscal year end might be the important date for tax purposes, but I don't see how you can say it's the important date for the URO. At the very least, this offer gives us a snapshot at who ranks where in terms of revenues for the 2003/04 season. In addition, it tells us that the Leafs blew everyone away.

    They discuss the formular for contributions in the proposal, although not the formula for receiving funds. Reference is made to the fact that the proposal will bring the average of the upper teams to just 30% more than the average of the lower teams under the NHLPA proposal, which at least gives us an idea of what we're dealing with. I'd agree the Oilers are a top 15 revenue generating team. Their proposal makes no reference to not handing out revenue sharing dollars to large markets, so I'm not sure where you're getting that from.

    I have a harder time with this proposition. I've bought into your argument that with a good team, you'll make a lot more money-it's intuitive, and makes a lot of sense. I have a harder time with the idea that if the Hawks suddenly get good they've got way more potential to grow their revenue base with the Oilers. At some point, there's a cap on what the Oilers can make in that market. It's hard to speculate, but looking at the teams above them-and there are some good teams in good markets, I have a hard time seeing a winning Oilers team generating much more revenue than Vancouver.

    The playoff revenue, I think is absurd to budget on-ask Burke if he thinks it's a good idea after this season. Even the ticket revenue from the regular season-$12 million is nice, but it gets eaten up pretty quickly.

    No argument from me on your last point. I wonder when the media in Edmonton will pick up on this? It's pretty significant, especially when you consider that Forbes had them 26 in teh league in revenue.
     
  13. mudcrutch79

    mudcrutch79 Registered User

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    This statement is based on the NHLPA's proposal, which made use of the NHL's revenue numbers-you can sort of reverse engineer it to the point that you realize one team is pulling in an extra 19mil in revenue. Then it's easy to realize that team is the Leafs when you look at the proposed payors in revenue sharing, and they're number one.

    No specific comments in mind, just comments Quinn has made over the years. They've always talked about trying to find deals that make sense financially. I don't think that they need to set the market, but it's gotta be a bit frustrating as a fan of them that some years (I'm thinking particularly of Rob Blake), there was a move to be made that might have pushed them forward, they have massive revenues and they didn't jump.

    To make it clear, I'm not relying on Forbes at all. Peddie is right to say Forbes doesn't have access to their books-the NHL's own numbers say the Leafs are doing way better than Forbes thinks.
     
  14. Tom_Benjamin

    Tom_Benjamin Registered User

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    I think you are missing the point here. You don't find any of the data surprising in light of the fact that a few years ago the NHL was telling us that the only Canadian team that could survive was Toronto. This data comes out and it turns out that the plan is for Canadian teams to be shipping revenue south. When you consider the TV revenue sharing, we would have the Canadian teams sending more than $50 million south under the owner's revenue sharing plan.

    We have Edmonton - supposedly doomed if they do not get a new CBA - in the top half of the league in revenues.

    None of that surprises you or shakes your faith in the NHL version of the hockey business?

    Tom
     
  15. Tom_Benjamin

    Tom_Benjamin Registered User

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    I missed this point. I wonder how the Leafs do when they win a couple of playoff rounds! And Peddie claims that "the Leafs are running out of runway".

    It came out in a different context and I can't find a link now. Chicago was specifically singled out. Teams with a potential TV audience of 2.5 million (IIRC) did not qualify.

    I don't disagree. There is no way in the world a winner in Edmonton can generate the same revenues as a winner in New York or Chicago or Toronto. Only massive revenue sharing can change that. But I don't see that as an issue. The issue is "Can the Edmonton Oilers afford a Stanley Cup Champion if they build one?" I think the answer (at today's prices) is "yes". Two factors go into that opinion:

    1) A team in New York cost about four times what a team in Edmonton cost and they have to make four times the profit to be a comparable investment.

    2) The old CBA tied a player to his team until he is 31. Really expensive teams are old teams. A winner in Edmonton will have to operate like a winner in New Jersey or Colorado - being very selective about which players to extend past 31 - rather than a winner in Detroit. If there is a disadvantage there, I can't see it.

    That's what I meant about the fiscal year end. At one time - it may have changed now of course - the Canucks ended their fiscal year at the beginning of April. That way they don't have to count on anything. They knew their 2004-05 playoff revenues before the season starts. They budget on the reality of the year before, not the possibility of the upcoming year.

    I'll bet no.

    Tom
     
  16. Tom_Benjamin

    Tom_Benjamin Registered User

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    I love that bit from Quinn. The thing is what makes sense changes as circumstances change. I think I have a good handle on Quinn's style. He's very selective about the players he hires. He did not want anything to do with Lindros for example and I think that negotiation was a charade.

    I think the Leafs tried really hard for Blake. Afterwards Quinn shrugged and said he didn't have the players to win the auction. The Avalanche gave up a lot and Toronto did not have a Deadmarsh to toss into the mix.

    Tom
     
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