Blue Jackets’ money woes about to get worse
Premium content from Business First - by Jeff Bell
Date: Friday, June 17, 2011, 6:00am EDT
Jeff Bell
Staff Reporter
The Columbus Blue Jackets Columbus Blue Jackets finances will take another hit this year when the team absorbs a 25 percent cut in revenue sharing it has come to depend on from the National Hockey League.
The reduction, which likely totals in the millions of dollars, is expected because the Jackets failed to meet attendance and revenue growth standards imposed by the league on small-market clubs that qualify for revenue sharing, said team President Mike Priest. The NHL will notify teams about their final revenue-sharing payouts for the 2010-11 season this fall, said Priest, who wouldn’t speculate on what a full share would total. Media reports have said it is expected to be around $16 million a team, so a 25 percent cut would cost the Blue Jackets $4 million.
To get a full share, the NHL requires small-market teams to average at least 14,000 attendance for home games and exceed the league’s overall revenue growth percentage. The Blue Jackets, which typically receive a full share, averaged 13,658 attendance at home last season. They did not exceed league-wide revenue growth expected to be 4 percent to 6 percent, Priest said.
“Our revenue actually went the wrong way,†he said, declining to detail the fall-off.
New lease on life
Priest would not confirm reports that the Blue Jackets will lose $25 million this year. That would be more than twice the annual losses of $12 million cited in a 2009 study of the team’s finances for the Columbus Chamber of Commerce.
The latest loss is being blamed on the attendance drop, the expected reduction in revenue sharing, higher player payroll and a Nationwide Arena lease that the Jackets have been trying to revise for more than two years without success.
Team administrators think they can get a better lease deal if Nationwide Insurance sells the arena to a public entity. Columbus and Franklin County officials have not been able to make that happen, even though they have said something needs to be done to keep the team here. Despite the stalemate, Blue Jackets majority owner John McConnell has not threatened to move or sell the team.
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The Blue Jackets’ revenue-sharing funds have grown steadily over the years, according to the chamber report prepared by Ohio State University finance professor Stephen Buser. The team got $3 million in 2006, and that tally rose to $8 million, $10 million and $14 million over the following three years.