I saw those on HNIC tonight, as did many of us. Suffice to say that my jaw dropped. It dropped because clearly no one checked the handiwork of Mr. Oake or his apparently financially challenged staff.
I have had some financial projections in my back pocket for WPG for quite some time but have held off for fear that it would drive some people over the edge, to be perfectly frank.
In short, with the possible exception of the suite revenue (which is still inaccurate, but only in a relatively minor way), the rest of the numbers are ridiculous. THe in-arena sales numbers are the worst in terms of inaccuracy, followed by the broadcast revenue. I will write off the revenue sharing to a simple inability to understand the NHL revenue sharing mechanism. $45M in ticket sales? That seems to contain a number of holes, albeit through making assumptions as to how one could go about that with what Oake stated was 14,500 in average paid attendance.
$80M would be the most optimistic assumption possible, if EVERYTHING went right. $102M is simply either delusional or produced by someone who has no understanding of sports finances. IMO, of course. Playoff games excluded of course.
BY the way: those "100 events" on top of hockey that Oake mentioned? Try about 69, between April 2010 and March of 2011. A fine performance, no doubt, but why exaggerate it by 50%, particularly when it can be counted in about 90 seconds like I just did? If it was 90 or so, I would write that off to a mild exaggeration. Rounding up 69 to 100? Nope.
Shout out to Killion: what do you think about producing $15M in fees from 69 events?
EDIT: I am of course not referring to gross revenue on the non-hockey events, K.
So why would the $45 million in ticket sales not be attainable? I understand Scott is off on his 14,500 persons estimate, but why would the revenue be full of holes?
If you minus approx. 1000 seats for the 50 suites plus another 500 free tickets per game that leaves you with 13,500. So......
13,500 * 44 games (including exhibition) * $75 average ticket price = $44 550 000
Seems to add up to $45 million if you round the number up. Are you referring to Winnipeg's ability to sell tickets at that price?
I remember you wrote in detail regarding the concessions and how these are contracted out (in most cases). Because of that, the profits realized by the owner(s) of the building are minimal. In this case, let's say $2 million.
For in-arena numbers maybe Oake was also referring to parking as well. The thing is I don't know, and I don't know if anyone else on this board knows, how many spots TNSE owns. I also don't know how much profit (not revenue) one can realize from those spots for sports and non-sporting events. $1 million maybe........$2 million at most?
Lastly, with regards to those in-arena numbers, Oake might have been referring to advertising. I'm sure the arena naming rights could garner in excess of $1 million per season. I would think it's reasonable that the team could generate in the neighbourhood of $4 million in total advertising when rinkboards, the scoreboard, electronic ribbon and concession area included.
So that's $2 million + $2 million + $4 million = $ 8 million in - arena revenues
Am I missing anything there?
I really don't know what the team would receive for merchandising. ie. How much do they see from the sale of a $200 hockey jersey?....a $35 dollar cap?
In regards to the broadcast revenue, CBC signed a new 5 - year deal with the league for 5 years at $500 million.....so $3 million per team. I have no idea what TSN pays.......I'll just assume it's the same. With the Jet s back in town I'm sure a local TV deal in the neighbourhood of $3 - $5 million per year would be in order. Hell, the Coyotes apparently get $5 million per year from their local TV deal and they get less than 10,000 viewers. Don't think anyone knows what NBC brings to the table since the deal is contingent on ad revenue.
So that's $3 million + $3 million + $3 - $5 million (local tv) + $1 million (NBC) = $10 - $12 million in tv revenue
That's not to far off Oake's estimates.
$10 million for the corporate boxes seems reasonable. Take the two 36-seat party suites and divide them to bring your suite total to 50. Charge $225 000 for the best suites between the blue lines......$200 000 from the blue line to the corners.....and $175 000 behind the nets. 50 suites * $200 000/suite average = $10 million.
$45 million ticket revenues + $10 million suites + $8 million in-arena revenues + $12 million tv revenue = $75 million + merchandise
Seems like the total revenue would be slightly more than your best-case scenario.....
BY the way, does anyone know what the average NHL team generates each year from merchandise? I'm all ears....
AS for your last bolded point, why do you think $15 million from 69 events is unattainable? There are so many factors that can determine this.........from the appearance fee of the artist at the venue, the price of tickets, tickets sold and I'm sure, several other things I can't think of. The revenue you realize from an soldout Elton John or a Metallica concert once expenses are accounted for, can differ greatly from that generated by a Sesame Street show which draws 3 - 5000. If you book the right events, that is, those events which you can charge a higher price point and which are also well attended, could you not profit in the neighbourhood of $15 million?