Forbes figures highlight growing gap between rich and poor
by James Mirtle on Nov 12, 2009 12:09 PM CST
16 comments
Forbes' annual Business of Hockey publication is out again, and while there are always a few caveats with their figures, the numbers do provide some interesting fodder.
Here's a look at NHL teams' Forbes calculated revenues over the past five seasons for the top three teams compared to an average for the bottom six (a group of the usual suspects made up of Phoenix, the Isles, Atlanta, Nashville, Columbus and Florida):
Keep in mind that these figures all include revenue sharing, and that the top three pay in and five of the bottom six receive. Shift the high-end teams up another $10-million or more and the bottom end ones down about that much and you've got a better idea of how big the gap really is.
The average NHL team has increased its revenues by $20-million since 2003-04, but those on the low end of the scale have only marginally improved their bottom lines, getting a $9-million boost on average (including revenue sharing). Toronto, Montreal and the Rangers, meanwhile, have increased their revenues by an average of about $40-million the past five seasons.
Keeping pace with the league's growth, in other words, continues to be a major problem for teams in smaller U.S. markets.
It's the teams at the top end, and a few others like the Blackhawks, that are pushing the rise of the salary cap over this period, but as I've said many times before, you've got to wonder where that leaves teams on the low end.
| Rk | Team | '03-04 | '05-06 | '06-07 | '07-08 | '08-09 | Change |
| 1 | Toronto | $117 | $119 | $138 | $160 | $168 | $51 |
| 2 | N.Y. Rangers | $118 | $109 | $122 | $137 | $139 | $21 |
| 3 | Montreal | $90 | $90 | $109 | $139 | $130 | $40 |
| 4 | Detroit | $97 | $89 | $109 | $110 | $130 | $33 |
| 5 | Vancouver | $74 | $80 | $96 | $107 | $109 | $35 |
| 6 | Boston | $95 | $86 | $87 | $97 | $108 | $13 |
| 7 | Chicago | $71 | $67 | $69 | $79 | $108 | $37 |
| 8 | Philadelphia | $106 | $88 | $87 | $102 | $101 | -$5 |
| 9 | Dallas | $103 | $89 | $91 | $105 | $97 | -$6 |
| 10 | New Jersey | $61 | $62 | $65 | $97 | $97 | $36 |
| 11 | Minnesota | $71 | $71 | $78 | $94 | $95 | $24 |
| 12 | Calgary | $70 | $68 | $77 | $97 | $95 | $25 |
| 13 | Anaheim | $54 | $75 | $89 | $90 | $94 | $40 |
| 14 | Pittsburgh | $52 | $63 | $67 | $87 | $93 | $41 |
| 15 | Los Angeles | $80 | $82 | $84 | $91 | $92 | $12 |
| 16 | Ottawa | $70 | $76 | $93 | $96 | $90 | $20 |
| 17 | Colorado | $99 | $81 | $79 | $91 | $84 | -$15 |
| 18 | San Jose | $74 | $69 | $72 | $85 | $84 | $10 |
| 19 | Edmonton | $55 | $75 | $71 | $85 | $83 | $28 |
| 20 | Washington | $61 | $63 | $66 | $73 | $83 | $22 |
| 21 | Carolina | $52 | $72 | $68 | $75 | $82 | $30 |
| 22 | Tampa Bay | $88 | $82 | $85 | $84 | $80 | -$8 |
| 23 | St Louis | $66 | $66 | $66 | $73 | $80 | $14 |
| 24 | Buffalo | $51 | $70 | $74 | $76 | $79 | $28 |
| 25 | Columbus | $66 | $66 | $68 | $71 | $77 | $11 |
| 26 | Florida | $60 | $65 | $67 | $74 | $74 | $14 |
| 27 | Nashville | $57 | $61 | $65 | $70 | $71 | $14 |
| 28 | Atlanta | $59 | $64 | $67 | $70 | $68 | $9 |
| 29 | Phoenix | $57 | $63 | $67 | $68 | $66 | $9 |
| 30 | N.Y. Islanders | $64 | $56 | $60 | $64 | $62 | -$2 |
| Averages | $75 | $76 | $81 | $92 | $94 | $19 |
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Instead of my usual diatribe against Bettman and the lockout I was wondering what could be done to fix the above situation? Obviously there are teams that have the advantage of history, location and fan base so the numbers will never truly be equal (nor do I think should be) but what is the solution at the next go around of the CBA? I truly have no idea.
The population of Pominville keeps rising!
by Blackcapricorn on Nov 12, 2009 12:25 PM CST reply actions 0 recs
Nice post James, Take a look at the Crosby/Malkin factor in Pitt, 41 mil. that would be an ROI right there. Similarly Colorado loosing Sakic, Roy and Forsberg has pulled them down quite a bit.
with the bottom 6 averaging in value at 70 million, you really have to wonder what was said behind closed doors between Balsille and the other owners.
by Johnny Thunder on Nov 12, 2009 2:34 PM CST reply actions 0 recs
Not a comment on the disparity
Adjusted for inflation, league revenues are actually in pretty good shape: ~26% increase versus ~16% inflation rate compared to 2003.
Only five teams have gone down since 2003, and the rest are, at minimum, close to inflation. Pittsburgh and Anaheim are the real winners. I guess a Cup run will do that… And for all of the complaining about NJ, Carolina and Buffalo, they’ve increased revenues by more than 50%.
by Fultron on Nov 12, 2009 3:46 PM CST reply actions 0 recs
I think something else that bears mention is the following footnote to the revenue figures:
4Net of arena revenues used for debt payments.
So the teams financing their buildings with heavy debt take a large hit on their revenue figure.
I didn’t dig too deeply but is there any mention of playoff revenues in the totals? Gate receipts contribute to revenue sharing as well, so not just the top 3 pay in.
by Bosc Ulrich on Nov 12, 2009 3:48 PM CST reply actions 0 recs
Yes, this would include playoff revenues. That’s why Carolina had such a “good” year by their standards.
Blogging on hockey at fromtherink.com
by James Mirtle on Nov 12, 2009 3:50 PM CST up reply actions 0 recs
I’m assuming debt is why the Habs dropped in value from the previous year. Gillett took out a ton of loans against the team’s value before he sold the team (and that sale still hasn’t gone through yet).
Hockey blogging can't get any flatter.
by saskhab on Nov 12, 2009 3:59 PM CST up reply actions 0 recs
THe CDN$ reduction would also play a role.
by Gerald on Nov 12, 2009 9:17 PM CST up reply actions 0 recs
Also, 6 of the top 7 teams are Original Six. Not surprising, I suppose, but kind of interesting.
by Fultron on Nov 12, 2009 3:49 PM CST reply actions 0 recs
I think there’s an argument to be made that the influential owners of the NHL love to have a few (or several) lame duck (or rather coyote) loss leaders to keep the cap down and their profits up. Who cares if a guy named Jerry loses everything and surrenders his team. As long as there’s another sucker to fill his Boots (pun intended) the cycle continues.
The problem with Balsillie is he actually has a plan to crack the top ten in revenues and profits. Not cool Jim, not cool. The role of a new owner is to subsidize the big boys, not cut into their share. Or didn’t you get the memo.
MG
by puckreport on Nov 12, 2009 4:30 PM CST reply actions 0 recs
Keeping pace with the league’s growth, in other words, continues to be a major problem for teams in smaller U.S. markets.
Not too sure where you get that, James. Putting aside the dubious nature of the numbers that are always inherent in the Forbes numbers, one would note that the Rangers have NOT kept up with revenue growth on a league wide basis (just under 18%, compared to the league-wide 25%).
As for small market teams not keeping up, I would say that PITT, MINN, WASH, FLA, CAR, and NASH say otherwise. This is particularly the case when comparing the anemic growth experienced by big-market DAL and PHI. And then there are the numbers from the three small market CDN teams.
Quite frankly, the numbers would appear to suggest the opposite of your thesis. If I didn’t know better, it might appear that you wrote your story before you really considered the numbers.
by Gerald on Nov 12, 2009 9:31 PM CST reply actions 0 recs
The average NHL team has grown by $19-million over this period. The Rangers are higher than that, at $21-million, and comfortably well ahead of the pack (still). Minnesota has never been a small market team as far as revenues are concerned.
No, the smallest of the small markets in the NHL (based on revenue) have grown almost solely via revenue sharing, which in my view is problematic. Those bottom six I highlight were well below the league average revenues five years ago, are collecting revenue sharing now and are now even further behind. Those six teams, five years ago, were an average of $15-million behind the average team in revenues. Now they’re $24-million back.
There are exceptions, sure, but look at that divide. It is growing, even if some of those middling teams have won a Cup and shot up the rankings.
Blogging on hockey at fromtherink.com
by James Mirtle on Nov 12, 2009 10:08 PM CST up reply actions 0 recs
First off James, you are focusing solely on raw dollar figures. THe NHL’s growth is driven on a percentage basis by increases in a variety of places, INCLUDING small markets.
Secondly, regarding the assertion that “smallest of the small markets in the NHL (based on revenue) have grown almost solely via revenue sharing”, that is utterly incorrect, and I KNOW you can do math better than that.
PITT is now an upper-tier revenue team. They do not even receive revenue sharing, or if they do it is a miniscule amount that represents a tiny sliver of their revenue.
Carolina has gone up $30 million. Even if they received the max revenue sharing (which I don’t think can happen – not everyone gets $14 mil, you understand), their other growth outstrips revenue sharing’s contribution.
MINN? THey are not eligible for revenue sharing, same as PITT.
As for NASH and FLA, the revenue sharing contribution would have been reflected in the first year after the lockout. Yet, for both those teams, have grown more after that first year post-lockout than they did in the first year.
BUF? They clearly got something of a bump by revenue sharing, but their revenue growth from other sources again exceeds the revenue sharing contribution. Note as well that BUF is a revenue sharing CONTRIBUTOR as well.
You have former have-nots like ANA and CHI way up in the upper tier now as well.
The story here is that a number of small revenue teams are now successful and are disproportionately contributing to NHL revenue growth.
by Gerald on Nov 15, 2009 10:58 PM CST up reply actions 0 recs
Gerald, I’m only talking about the Isles, Phoenix, Florida, Nashville, Columbus and Atlanta. The past three seasons, they’ve been bottom feeders consistently in multiple ways. We’re talking about 20 per cent of the league there, so why expand the sample size?
A couple teams won a Cup and have re-established themselves, but on the low end, their revenues are just sitting stagnant as there are gains elsewhere postlockout.
Blogging on hockey at fromtherink.com
by James Mirtle on Nov 16, 2009 12:17 AM CST up reply actions 0 recs
Putting aside the dubious nature of the numbers that are always inherent in the Forbes numbers
Someone cited the Forbes numbers without including that caveat in a recent thread. I wonder who that was?
by J. Michael Neal on Nov 14, 2009 12:27 PM CST up reply actions 0 recs
It has been spoken of many times. What, are you going to sue me for missing the caveat sometimes?
by Gerald on Nov 15, 2009 10:59 PM CST up reply actions 0 recs
what this says to me is
playoff runs equal prosperity. and the diving US dollar from 2003 to now has made the cad clubs very wealthy.
All CAN teams have gone up $20 mil minimum. Even Ottowa which has underperformed the past two years.
as for the others….
PIT went from last in 03-04 to 2 cup appearances.
CHI goes from mediocre to one deep playoff run
ANA has gone form mediocre expansion to cup champ and perrenial playoff team.
NDJ just got a new building for the 07/08 season
DET from 2 playoff rounds to cup finals 2 years strait
CAR from missed playoffs to ECF
by PhilG on Nov 13, 2009 8:39 AM CST reply actions 0 recs
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