Just wanted to thank you for putting together a well thought out response.
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Originally Posted by Jay Random
IIRC, Forbes had the Flames' operating income at a whopping $400,000 in the last non-COVID year. So… break-even if costs don't go up (which they always do) and revenue isn't affected by COVID (which it has been every year since).
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We agree, and I am a big believer that the Flames would be more successful on ice if they took care of their off ice business. Playoffs and running a budget below the salary cap would help both the bottom line and our on ice product in my opinion.
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Originally Posted by Jay Random
A hockey team in the post-COVID era is not where you go looking for yield. And don't tell me about the alleged value of the franchise: that's fool's gold in a business where only a handful of franchises are making any worthwhile amount of money. Cord-cutters are still cutting their cords, local media revenue is on the way down, gate revenue (70% of the business in a non-COVID year) is uncertain at best. The fan base is aging rapidly, as young people are less interested in sports generally than they used to be.
In these circumstances, a small-market pro sports franchise is not a sound investment. At best it's a toy for a billionaire to play with, and we're starting to see a new generation of billionaires who don't care about sports franchises because they are too busy playing with their private space programs.
I believe the North American pro sports business has already passed peak asset value. Assuming that any old NHL club can sell for a billion dollars because John Henry paid $900 million for the Penguins is wishful thinking.
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Your point is noted, I do disagree with your assessment of the value of the product. We have seen the NHL expand twice in the last 5yrs, the majority of the franchises are healthy, and they just got brought back to ESPN. Content is king in the new world, and live sports is a big part of that. There are many revenue streams that will appear that will replace the beer and nachos crowd. Fun fact NBA Topshot generated $230m in revenue...that's like 7% of the NHL! The NHL is a gate driven league, but even keeping things the same can pay an annuity on debt funding.
As for Calgary...Canada has net migration and that in itself is enough to keep Calgary growing. The town also has an entrepreneurial spirit with an educated population that has a 8month winter. It will be a top hockey market for a long time. There is only one pro team in town. It's like buying a house on the beach...they're not making more of it.