The Oilers as a Business - Be Afraid

[Lummer Hummer]

I thought that it'd be interesting to look at the Oilers organization from a strictly business point of view - that is, not as a sports team but as just another small- to mid-size firm in Alberta. Let's say, for argument's sake, that this firm generates $100M in revenues annually (I think it's probably pretty close to this, but I could be way off). in my experience, a well-run business would tend to pay its senior management team approximately 1% of total revenues, or about $1M in total. Anything more than this would indicate that the firm is not smartly run, & is directing too much of its resources in an inefficient manner.

Taking this into account, what do you suppose the Oilers' total compensation is for their senior management team? $2M? $3M, $4M? I guess what I'm getting at is that a lot of fans hold on to the notion that Mr. Katz is some kind of business savant, & that he would never allow such inept performance from one of his businesses as he seems to with the Oilers. The point here is that he doesn't consider the team to be a "business", but rather a toy to be played with, much like you & I used to play table hockey.

I remember when Mr. Katz outbid himself to purchase the team from EIG - the vast majority of us were falling all over ourselves shouting, "finally we have a really rich, successful owner who will put his own stamp on the team". Well, there's an old adage that says "Be careful what you wish for - you just may get it"... want that wish back?

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[gqmixmaster]

NHL teams aren't like regular businesses, if they were they would buy their own arena and not rely on tax dollars. Also, they wouldn't have a salary cap on their industry.

 

[Up the Irons]

I thinks pretty clear Katz does not treat The Oilers as a business. The bad press from the KLowe billboards alone would mean dismissal from any serious corporation. Same for his 6 rings presser meltdown. The are half a dozen very strong reasons to have let Lowe go.

His presence with the organization makes them impossible to take seriously, and getting impossible to cheer for.

 

[Throttlehead]

I thinks pretty clear Katz does not treat The Oilers as a business. The bad press from the KLowe billboards alone would mean dismissal from any serious corporation. Same for his 6 rings presser meltdown. The are half a dozen very strong reasons to have let Lowe go.

His presence with the organization makes them impossible to take seriously, and getting impossible to cheer for.

Its clearly NOTHING but a business to Katz.

The team is now valued at 480 million, they think after the rink goes up, team value will be between 600-800 million. The rink is full every night.

Katz got property deals downtown in coordination with rink, that will make him 100's of millions.

Please don't confuse this. He doesn't give a shyte how the Oilers hockey stats look, things are going great for him.

 

[EnthusiasticYak]

I thought that it'd be interesting to look at the Oilers organization from a strictly business point of view - that is, not as a sports team but as just another small- to mid-size firm in Alberta. Let's say, for argument's sake, that this firm generates $100M in revenues annually (I think it's probably pretty close to this, but I could be way off). in my experience, a well-run business would tend to pay its senior management team approximately 1% of total revenues, or about $1M in total. Anything more than this would indicate that the firm is not smartly run, & is directing too much of its resources in an inefficient manner.

Taking this into account, what do you suppose the Oilers' total compensation is for their senior management team? $2M? $3M, $4M? I guess what I'm getting at is that a lot of fans hold on to the notion that Mr. Katz is some kind of business savant, & that he would never allow such inept performance from one of his businesses as he seems to with the Oilers. The point here is that he doesn't consider the team to be a "business", but rather a toy to be played with, much like you & I used to play table hockey.

I remember when Mr. Katz outbid himself to purchase the team from EIG - the vast majority of us were falling all over ourselves shouting, "finally we have a really rich, successful owner who will put his own stamp on the team". Well, there's an old adage that says "Be careful what you wish for - you just may get it"... want that wish back?

The business is performing fine for him. The product is lacking, but that's not affecting business so where is the incentive to change?

 

[gofafeads]

Not sure your comparison says anything because the oilers and the nhl for that matter are not these regular run of the mill businesses. Basically you are lumping them into such a broad category which doesn't tell the whole picture. I think a more accurate comparison would be among their peers, so other nhl teams. Couldn't quickly find any hard data but from wiki, burke had a salary of 3 million in tor and they have a revenue of 190m (Forbes). Would definately be interested in someone finding more data on this. But, IMO the oilers are a business, this idea that katz has this disposable income to fiddle around with a multi-million dollar "toy" is nonsense.

 

[Suxnet]

I thought that it'd be interesting to look at the Oilers organization from a strictly business point of view - that is, not as a sports team but as just another small- to mid-size firm in Alberta. Let's say, for argument's sake, that this firm generates $100M in revenues annually (I think it's probably pretty close to this, but I could be way off). in my experience, a well-run business would tend to pay its senior management team approximately 1% of total revenues, or about $1M in total. Anything more than this would indicate that the firm is not smartly run, & is directing too much of its resources in an inefficient manner.

Taking this into account, what do you suppose the Oilers' total compensation is for their senior management team? $2M? $3M, $4M? I guess what I'm getting at is that a lot of fans hold on to the notion that Mr. Katz is some kind of business savant, & that he would never allow such inept performance from one of his businesses as he seems to with the Oilers. The point here is that he doesn't consider the team to be a "business", but rather a toy to be played with, much like you & I used to play table hockey.

I remember when Mr. Katz outbid himself to purchase the team from EIG - the vast majority of us were falling all over ourselves shouting, "finally we have a really rich, successful owner who will put his own stamp on the team". Well, there's an old adage that says "Be careful what you wish for - you just may get it"... want that wish back?

It's up there among the league's highest. Lowe or MacT even admitted it in an interview and that was before Nicholson was even hired.

 

[Pizza the Hutt]

NHL teams aren't like regular businesses, if they were they would buy their own arena and not rely on tax dollars. Also, they wouldn't have a salary cap on their industry.

Actually they are quite similar to an Oil company. Like the Oilers, oil companies are subsidized by the government, and like the NHL, OPEC enforces a salary cap.

 

[Beerfish]

The business side is 100% separate from the hockey side so far. If as a business owner you can get the government to almost 100% subsisze your biggest capital expenditure, and if as a business no matter how horrid the product is the customer keeps buying then you don't care.

This is why sports business's are somewhat unique and very different than your ordinary busiess because fans are expected, kajolled, threatened into supporting the team with dollars no matter what throught thick and this.

 

[redgrant]

Goodwill impairment.

 

[ONOilersFan]

This notion that the ownership doesn't care or have any incentive for the team to win is nonsense. It's the same argument that Leaf fans spout when talking about their owners.

The fact is that if the team was winning, Katz would be making a ton more money. A prolonged run in the playoffs brings in millions PER GAME in revenue along with all the spin-offs such as merchandise and so on.

Don't believe for a moment that Katz doesn't want to win. He just isn't very good at making that happen.

 

[Ninety7]

This notion that the ownership doesn't care or have any incentive for the team to win is nonsense. It's the same argument that Leaf fans spout when talking about their owners.

The fact is that if the team was winning, Katz would be making a ton more money. A prolonged run in the playoffs brings in millions PER GAME in revenue along with all the spin-offs such as merchandise and so on.

Don't believe for a moment that Katz doesn't want to win. He just isn't very good at making that happen.

if Millions of dollars were on the line like you said, then I refuse to believe that this guy would still have his idiot buddies, Lowe and MacT, running the show.

He hasn't done anything about our losing, so I really question if he cares.

 

[Up the Irons]

Its clearly NOTHING but a business to Katz.

The team is now valued at 480 million, they think after the rink goes up, team value will be between 600-800 million. The rink is full every night.

Katz got property deals downtown in coordination with rink, that will make him 100's of millions.

Please don't confuse this. He doesn't give a shyte how the Oilers hockey stats look, things are going great for him.

I guess one can look at it that way too. But, as long as he employs Lowe it's difficult to take Katz seriously. He's paying the man a handsome six figure (maybe 7 figure) salary to be horrendously bad at his job, hurt the franchise brand, bring national embarrassment in the form of news stories about billboards and press conference meltdowns, and now, basically does nothing.

If it was truly a business, u would eliminate the position of POHO. It didn't exist a decade ago. It started as a plum job for iconic former players.

 

[Jumptheshark]

I thought that it'd be interesting to look at the Oilers organization from a strictly business point of view - that is, not as a sports team but as just another small- to mid-size firm in Alberta. Let's say, for argument's sake, that this firm generates $100M in revenues annually (I think it's probably pretty close to this, but I could be way off). in my experience, a well-run business would tend to pay its senior management team approximately 1% of total revenues, or about $1M in total. Anything more than this would indicate that the firm is not smartly run, & is directing too much of its resources in an inefficient manner.

Taking this into account, what do you suppose the Oilers' total compensation is for their senior management team? $2M? $3M, $4M? I guess what I'm getting at is that a lot of fans hold on to the notion that Mr. Katz is some kind of business savant, & that he would never allow such inept performance from one of his businesses as he seems to with the Oilers. The point here is that he doesn't consider the team to be a "business", but rather a toy to be played with, much like you & I used to play table hockey.

I remember when Mr. Katz outbid himself to purchase the team from EIG - the vast majority of us were falling all over ourselves shouting, "finally we have a really rich, successful owner who will put his own stamp on the team". Well, there's an old adage that says "Be careful what you wish for - you just may get it"... want that wish back?

I can tell you right off the bat you are not doing the math right based upon information provided for the CBA and money dispusal and other stuff. Oilers are making monehy and that is one reason why Katz andd the oilers hae not gone bat **** crazy

 

[Up the Irons]

This notion that the ownership doesn't care or have any incentive for the team to win is nonsense. It's the same argument that Leaf fans spout when talking about their owners.

The fact is that if the team was winning, Katz would be making a ton more money. A prolonged run in the playoffs brings in millions PER GAME in revenue along with all the spin-offs such as merchandise and so on.

Don't believe for a moment that Katz doesn't want to win. He just isn't very good at making that happen.

I can buy that. I think he genuinely wants to make edmonton better and improve the downtown, and for all the right reasons. And he does love the Oilers.

He just has this one flaw, trust and loyalty to the OBC. On this point he is not logical and businesslike. He doesn't know anything about pro hockey and Lowe has his ear. I wouldn't be surprised if Lowe planted the seed of buying the Oilers in the first place. They were going to remake the 80s together! It was going to be great. And he's still hanging to that original dream that started about 8 years ago.