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heep223 · 10-08-2022, 09:37 PM

Someone very much in the know told me that the team makes negligible returns for the regular season. I think he said around 5% but he may have said 10%. It’s the home playoff games that make the juice. Which makes sense - the team’s biggest expense is payroll, which doesn’t change whether the team makes the playoffs or not. Aside from random performance bonuses I suppose. There’s also random one off things like expansion fees that can provide a nice bump to the regular bottom line.

Granted, this person could have been lying to me outright. But he is not that kind of person.

In regards to the franchise value itself, yes that is a big part of it too. The caveats there though are that obviously there’s no liquidity on that until they sell the team. And, while it sounds like a big gain if you say an owner bought the team for 200M and now it’s worth 1B or whatever, that’s usually over a very long period like 20 years. So the annualized return or IRR isn’t nearly as high as you’d think. I ran the numbers a bunch of years ago using estimates on the Flames and I think the IRR was like 10%. You can make that in the stock market with full liquidity.

I’m not saying that it’s not a good investment, or that the owners are doing us a favour, or that we despise them, or they despise us, or whatever. I don’t personally care about any of that, I like watching hockey so I’ll pay to watch hockey up to a certain amount. Im just saying from a moderately informed opinion, I don’t think it’s nearly as lucrative as people think.

10-08-2022, 09:37 PM	#56
heep223 Could Care Less Join Date: Sep 2013 Exp:	Thank-You Ownership Group Someone very much in the know told me that the team makes negligible returns for the regular season. I think he said around 5% but he may have said 10%. It’s the home playoff games that make the juice. Which makes sense - the team’s biggest expense is payroll, which doesn’t change whether the team makes the playoffs or not. Aside from random performance bonuses I suppose. There’s also random one off things like expansion fees that can provide a nice bump to the regular bottom line. Granted, this person could have been lying to me outright. But he is not that kind of person. In regards to the franchise value itself, yes that is a big part of it too. The caveats there though are that obviously there’s no liquidity on that until they sell the team. And, while it sounds like a big gain if you say an owner bought the team for 200M and now it’s worth 1B or whatever, that’s usually over a very long period like 20 years. So the annualized return or IRR isn’t nearly as high as you’d think. I ran the numbers a bunch of years ago using estimates on the Flames and I think the IRR was like 10%. You can make that in the stock market with full liquidity. I’m not saying that it’s not a good investment, or that the owners are doing us a favour, or that we despise them, or they despise us, or whatever. I don’t personally care about any of that, I like watching hockey so I’ll pay to watch hockey up to a certain amount. Im just saying from a moderately informed opinion, I don’t think it’s nearly as lucrative as people think.