Discussion in 'Fugu's Business of Hockey Forum' started by Blades of Glory, Jun 13, 2006.
That's what they get for adding salary from the Thornton deal
New moto: "San Jose Sharks, ticket buyers are our chum."
whats another 5 million among friends?
I take this with a HUGE grain of salt...there's a lot of crafty stuff that the SVSE ownership group can do to claim that they're losing money. I suggest everyone go read the book May The Best Team Win...it's about baseball economics but it relates directly back to the NHL.....teams that are owned by groups like the Sharks are with SVSE can really doctor books creatively. Things such as concession/merchandise sales and revenue from parking can all be marked as gains for the group SVSE, but don't have to be written down as profits for the TEAM. SVSE makes lots of money by getting preformers like Andrea Bocelli and other events like WWE to come to the Tank, but those don't go down as profits for the SJ Sharks. Many baseball teams have done this and do do this...it's not illegal it's just creative accounting. I bet if all of SVSE's gains were compared to their expendatures they would be not be in the red.
And what exactly is the purpose of this gymnastic accounting ?
Claiming a net loss and raising ticket prices even though you technically made a profit.
exactly. Especially if there is revenue sharing with regards to TV contracts and such...teams that make less get more...so it's almost a good idea to trim your profits.
I believe they only added about 1.1 million in salary from that deal? Anyway, SVSE is full of cheap old guys who's only goal is to make a profit, so I woudn't be surprised if there is some chicanery in their reports. However, The Sharks's former ownership groups (which had Jamison and others but was mostly owned by the Gunds) generally lost more than 10 million US$ per year on the Sharks. Since the Gunds were multi-millionaires and had no problem losing that much money, they did not see much reason to hide that fact. When the losses became too much, the Gunds took the high road by selling the team instead of gutting it or raising ticket prices to save money.
These were old tactics that teams frequently used, and probably the biggest reason why the lockout took as long as it did.
The new CBA has defined exactly what revenue is and is not, and for better or worse they've closed a great many of these accounting loopholes.
Yes, indeed, it's a sad day for all bean counters.
It would be nice to see some of those boxes fill up. As much as fans hate to see corporate suits taking up all the good seats, these guys also buy boxes and that is a huge revenue source.
Here's to hoping corporate San Jose gets on board for 06-07.
Joe winning the Hart and Lester trophies wouldn't do any harm to their marketing schemes either.
The Ducks lost over 15 million dollars this past season. According to Brian Burke, the Ducks gave a portion of their revenues from the playoffs back to the league.
But note that even with the 6-8% ticket price increases, most tickets are still less than what they were pre-lockout.
My seats - upper bowl, row 13 (first row of cheap seats), center ice - went from $28 (STH price) in '03-'04 to $24 this season and to $26 next year.
The stage is set! Shed some salary! Marleau to the Preds! I can FEEL it!
All true, but so was the original point - SVSE can lose money on the Sharks, but still turn a profit from the other events at the HP Pavilion.
And how SVSE spins the revenues in a Murky News piece doesn't necessarily have to jibe with the CBA HRR definitions.
I agree, although for whatever reason I didn't read the original point as such. Especially when you consider the article frequently mentioned revenue sharing as a possibility for the club.
Actually the article never mentions revenue sharing. It does mention the disparity in local TV revenues between teams, but nothing about revenue sharing.
Anyway, the Sharks are not eligible for revenue sharing because:
1. Their team payroll will very likely be above the salary range midpoint. They were close to the $28.6M midpoint last year before adding Thornton and the new deals with Nabakov, Cheechoo, and Toskala, and any RFA raises or UFAs. They would likely have to do some salary cutting to stay below next years $35M midpoint (based on the projected $43M cap).
2. They are in a market with >2.5M TV households (ie the SF Bay Area, the 6th largest US market), and thus ineligible for revenue sharing.
edit: Actually the Bay Area has only 2.36M TV households:
Boy, that 2.5M households really is a "screw Wirtz and nobody else" rule.
edit again: I guess I can't read.
edit again again:
In case anyone was wondering:
Details from the Revenue Sharing sticky thread (from the Sports Business Journal article):
A quick read of Article 49 of the CBA seems consistent with these descriptions and rules.
When I get a chance, maybe I'll start a revenue sharing thread with a more detailed reading / summary of Article 49 - but I'm too damn tired now.
What the hell? How does all of this happen?
I am unfamiliar with the Sharks ownership, does the group that owns the arena also own the Sharks. If so, there is no point to creative accounting to make one entity appear to be losing money while the other coins it.
The bottom line for ticket prices is economics, suppply and demand. If people do not like the new prices just don't go to the games. All this accounting justification is total nonsense.
I believe that the city owns the arena and the Sharks are in charge of managing it including all other events in addition to hockey.
SVSE ( Silicon Valley Sports & Entertainment) is the ownership group that bought the team from the Gunds and thus got the Sharks on the original "sweatheart" deal motivating the Gunds to sell the Northstars and move to San Jose to set up shop with the expansion sharks in 1991. Besides having the city ( as in Us tax payers )pony up the majority of the Arena construction costs ( $170 mil of the $220 mil it cost after overruns ) the Gunds have a fixed lease of $500K they pay the city each year. Yet even with that fixed lease the Gunds, and Now SVSE, keep ALL revenues streams, Parking, conssesions, tix for all events at HP pavillions. Every concert, arena football game, moster truck thingy. I do belive that off the property the parking is a city/ SVSE agreement. So like was said above take any "we are in the red" comments with a lump of salt, its more PR for smokescreen the public to why the tickets are going up again.
FYI the sharks subsidy is just one of the many things our city has in its history of throwing $$ just to get its own citizens to come downtown, like the $4 mil for a CART race http://www.mercurynews.com/mld/mercurynews/sports/columnists/mark_purdy/14737411.htm
The teams can't hide their profits. They've audited to ensure the league revenue numbers (on which the cap is based) are accurate.
Brian Burke said it was a part of the new CBA. I haven't read the new CBA to see what the exact language is.
A partnership will ensure 30 healthy and competitive franchises with affordable ticket prices. This is a goal that we will not abandon.
-Gary Bettman, October 2004
But I guess I'm the ******* for pointing it out.
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