News Article: Red Wings did make 31M profit with the worst season in their hockey history

[Ed Ned and Leddy]

mrw I hear the owners complain about anything ever

 

[Ghost of Ethan Hunt]

 

[FabricDetails]

Trash ass Arizona Coyotes.

 

[Unfriendly Ghost]

So the Wings made 31 mil, and I've seen it reported that Little Caesar's has done pretty well during quarantine. Maybe the Ilitches are doing alright.

 

[Henkka]

How far were we from the salary cap when this 31mil was calculated? Just curious if we were a competitive tram that capped out 31mil goes fast.

Cap floor is 20.7M lower than cap, so we would still be making profit even though pushing against the cap.

 

[Henkka]

So the Wings made 31 mil, and I've seen it reported that Little Caesar's has done pretty well during quarantine. Maybe the Ilitches are doing alright.

Yeah, I think they'll survive with their 6 billion net worth + this tiny hockey team pushing profit in any situation.

 

[TCNorthstars]

How far were we from the salary cap when this 31mil was calculated? Just curious if we were a competitive tram that capped out 31mil goes fast.

Wings were pretty much capped out last year. They had 1.5 million of space.

 

[Henkka]

Wings were pretty much capped out last year. They had 1.5 million of space.

Caphits were high yeah, but Zetterberg and Franzen contracts were there total of 10M and only 2 in real money.

 

[ArmChairGM89]

If you think about all the costs of owning a hockey team the profit margin is actually very slim I’d imagine. You gotta like hockey because it’s not a great business. Most businesses carry a 30% margin at minimum. I’d bet they are working with less than half that, and they are one of the highest. Yikes.

 

[Henkka]

If you think about all the costs of owning a hockey team the profit margin is actually very slim I’d imagine. You gotta like hockey because it’s not a great business. Most businesses carry a 30% margin at minimum. I’d bet they are working with less than half that, and they are one of the highest. Yikes.

Red Wings were 24,6%. So not anywhere near that bad.

31M profit of 157M Revenue.

The Business Of Hockey

 

[ArmChairGM89]

Red Wings were 24,6%. So not anywhere near that bad.

31M profit of 157M Revenue.

The Business Of Hockey

Guess I should read the article lol

still they’re one of the most profitable and aren’t even hitting 30% with a low cap total.

 

[TCNorthstars]

Caphits were high yeah, but Zetterberg and Franzen contracts were there total of 10M and only 2 in real money.

Excellent point.

 

[Winger98]

If you think about all the costs of owning a hockey team the profit margin is actually very slim I’d imagine. You gotta like hockey because it’s not a great business. Most businesses carry a 30% margin at minimum. I’d bet they are working with less than half that, and they are one of the highest. Yikes.

I have to think the real value is as some sort of tax and banking assets. Something to help a larger entity (like Ilitch Holdings) move money around and massage their numbers a bit, something to borrow against, etc. And bragging rights, at least for the old man.

 

[ricky0034]

I have to think the real value is as some sort of tax and banking assets. Something to help a larger entity (like Ilitch Holdings) move money around and massage their numbers a bit, something to borrow against, etc. And bragging rights, at least for the old man.

this is more situational there's also other stuff to this whole sports team thing like how a lot of these owners get access to some of the money from other events like concerts etc that take place in the arenas

and there's something to be said for less direct things like owning other businesses near the arenas to take advantage of the draw the team brings etc

 

[ArmChairGM89]

I have to think the real value is as some sort of tax and banking assets. Something to help a larger entity (like Ilitch Holdings) move money around and massage their numbers a bit, something to borrow against, etc. And bragging rights, at least for the old man.

Yeah I’m less knowledgeable in those aspects of business. That’s big business stuff lol

 

[Gniwder]

NHL Team Values 2020: Hockey’s First Decline In Two Decades

There it is.

Only 5 teams made a better result.

+31M no matter what happens on the ice.

Does Chris Ilitch need to be scared about losing money? Doesn't look like that.

They played 85% of the season with arena attendance. The issue for this season is that they will be playing without any gate receipts since there will be no fans in attendance. They can't charge for season tickets either....

So how much do they make off of arena attendance? This article says $60M
Detroit Red Wings on the Forbes The Business of Hockey List

All things being equal, and having around $10M less in actual salary, they stand to lose about $20M this season or more depending on how the TV contracts (national and local) are worded.

Chris isn't in the business to lose money. That being said, it looks like he'll recover his losses as soon as arenas open up again.

 

[Gniwder]

How far were we from the salary cap when this 31mil was calculated? Just curious if we were a competitive tram that capped out 31mil goes fast.

$31M for the season.... and they didn't even play all of the games.

The team started the season at $77M salary including Z's $6M LTIR which was probably covered by insurance, if not then it was $1M actual salary.

So playing a full season at max cap of actual salary, they'd still be making about the same amount. More revenue if they make the playoffs though.

That is why I said Chris will spend when they open up the arenas. There's no reason not to spend, whereas if they keep sucking, people will stop buying season tickets. Most of them are owned by corporations that use it for their clients.

 

[Gniwder]

Trash ass Arizona Coyotes.

They really need to move that team to Quebec. The NHL doesn;t need 2 teams in teh desert.

 

[ricky0034]

They really need to move that team to Quebec. The NHL doesn;t need 2 teams in teh desert.

Winnipeg isn't exactly doing much better on this list

and Quebec City has an even smaller population and much more nearby competition for fans

 

[odin1981]

They played 85% of the season with arena attendance. The issue for this season is that they will be playing without any gate receipts since there will be no fans in attendance. They can't charge for season tickets either....

So how much do they make off of arena attendance? This article says $60M
Detroit Red Wings on the Forbes The Business of Hockey List

All things being equal, and having around $10M less in actual salary, they stand to lose about $20M this season or more depending on how the TV contracts (national and local) are worded.

Chris isn't in the business to lose money. That being said, it looks like he'll recover his losses as soon as arenas open up again.

This year would be a tax write off year for illitch holdings/little caesar's.

 

[avssuc]

Was that $31 million 'with' the revenue sharing accounted for?

 

[OgeeOgelthorpe]

If you think about all the costs of owning a hockey team the profit margin is actually very slim I’d imagine. You gotta like hockey because it’s not a great business. Most businesses carry a 30% margin at minimum. I’d bet they are working with less than half that, and they are one of the highest. Yikes.

Is there a list somewhere of which teams own their arenas or are paying very little for its usage?

 

[The Zetterberg Era]

If you think about all the costs of owning a hockey team the profit margin is actually very slim I’d imagine. You gotta like hockey because it’s not a great business. Most businesses carry a 30% margin at minimum. I’d bet they are working with less than half that, and they are one of the highest. Yikes.

It's the asset itself that is valuable though in a lot of ways. As inflation keeps driving the team worth up. It is a novelty purchase anyway in a lot of ways, you can make money off of it for sure, but it is kind of like investing in art. It continues to gain value over time in a lot of cases, it doesn't necessarily increase your bottom line day to day but you can borrow against it or leverage it. While the margins might not look great.

In 1982 the Ilitch family bought the Detroit Red Wings for 8.5 million dollars. In under 40 years they have a valuation of $775 million dollars. That is a crazy good investment. Now you have to sell it to cash it in, but that is a part of this picture and probably the bigger one for the business people going into sports ownership.

 

[Gniwder]

This year would be a tax write off year for illitch holdings/little caesar's.

It's not really a tax write off so much as just a reduction of overall profits since they are owned by the same holding company.

I can see his viewpoint.... no arena attendance, he stands to lose $20M or more, why bother spending another $10M to the cap limit when the team is gonna suck this season anyways.

I will be disappointed if he doesn't start spending when the arena open up again, especially considering that the defense will be much improved with Seider, Hronek, Lindstrom, Power, and possibly Johansson playing back there. The team should be playoff level by 22-23 season with the addition of a center, who probably will have to be bought in UFA or traded for.

 

[Fil Larkmanthanasiou]

I have officially boycotted spending any money on the Wings until they trash Blashill.