Thank-You Ownership Group

[PeteMoss]

Originally Posted by Jay Random

The CBA has very strict reporting requirements for HRR. That forces accounting to be pretty well standardized across the league.

Earnings in the NHL, as reported by Forbes over many years, pretty closely follow a Pareto distribution, with 20% of the teams making 80% of the profit. At last report, Covid notwithstanding, the Original Six teams plus L.A. were highly profitable; a big tranche of smaller-market teams (including Calgary) were operating at break-even or a little better, depending on playoff performance; and about ten teams at the bottom were losing money. Half of the reported profits were earned by just three teams – Toronto, Montreal, and the Rangers.

HRR excludes the big cheques the owners got for Vegas and Seattle joining the league. And Forbes is basically making up numbers. Not saying it's incorrect but those Forbes valuations are not a reliable source.

[Jay Random]

Originally Posted by PeteMoss

HRR excludes the big cheques the owners got for Vegas and Seattle joining the league.

Right, because that is a one-shot sale, not operating revenue, and it is not repeatable. As it was, the league flushed a gigantic amount of money down the hole in Arizona to keep the Coyotes from relocating until both those expansion franchises had been sold. And now media and merchandising revenue are split 32 ways instead of 30.

Here is the amount of money the NHL owners will be taking in from expansion fees this year:

$0.00.

Next year:

$0.00.

For the foreseeable future:

$0.00.

This does not help any business make a profit.

And Forbes is basically making up numbers.

They're working off incomplete information. That's not remotely the same thing as simply making up numbers.

[heep223]

Most interesting part of this thread is OP’s views on a “couple” of years versus a “number” of years.

That should make for a better debate

[MrMike]

Originally Posted by heep223

Most interesting part of this thread is OP’s views on a “couple” of years versus a “number” of years.

That should make for a better debate

When I was a wee young lad, I used to think when people said “a couple” they were saying “a cup full”

[memphusk]

I will not lie on this. If I could own an NHL team and break even every year I would own that team for as long as my days.

[rooster]

Originally Posted by Jiggy

The Hitmen and Stamps have made more money than the Flames the last 5 years. We're lucky the owners spend to the cap knowing they will most likely lose money.

ARE YOU KIDDING!!! There is not a chance in hell that is true. When are they losing money? After Edwards and all the bigshots take out there inflated paychecks and bonuses out? I am sure the covid put them in the red for a while but there is no ####ing way they are losing money. If they were the value of these sports teams would not be escalating every year.
The Stamps have 9 home games for petes sake. The Flames probably make more money than the Stamps off jerseys and hot dogs!

[Jiggy]

Originally Posted by rooster

ARE YOU KIDDING!!! There is not a chance in hell that is true. When are they losing money? After Edwards and all the bigshots take out there inflated paychecks and bonuses out? I am sure the covid put them in the red for a while but there is no ####ing way they are losing money. If they were the value of these sports teams would not be escalating every year.
The Stamps have 9 home games for petes sake. The Flames probably make more money than the Stamps off jerseys and hot dogs!

You do know players salaries are paid in USD and a lot of the Flames revenue is in CAD. Besides the players salary the team pays for coaches, management, equipment, travel (30k/hour for a charter), hotel accommodation, scouts, player development, meals, trading staff, medical staff, CSEC staff, and other things I'm forgetting. There is a lot of costs associated with owning a team. And the NHL is a gate driven league. Just because the Flames are "worth" a certain amount doesn't mean they bring in profit every year. Most NHL teams lose money.

The Flames could sell 1 million jerseys. It doesn't mean they receive all of the revenue from them. The NHL collects the revenue and distributes between the teams. So I'm not sure where you are going with the jersey comment.

[PepsiFree]

Thank you, business, for doing a good enough job to interest me in spending money at your business.

[smiggy77]

Originally Posted by rooster

ARE YOU KIDDING!!! There is not a chance in hell that is true. When are they losing money? After Edwards and all the bigshots take out there inflated paychecks and bonuses out? I am sure the covid put them in the red for a while but there is no ####ing way they are losing money. If they were the value of these sports teams would not be escalating every year.
The Stamps have 9 home games for petes sake. The Flames probably make more money than the Stamps off jerseys and hot dogs!

Ownership isn’t pulling a paycheck out of the flames.

It’s commonly known that owning a hockey team is these smaller markets make zero business sense. They’re returns are not even 4% all said and done.

Imagining being in Ottawa when Melnyk tried to make it a business venture


Sent from my iPhone using Tapatalk

[smiggy77]

Originally Posted by SutterBrother

Not going to thank billionares who want public funds for their own building.

You shouldn’t either.

And if you think they are being “generous” or whatnot with their spending on the team, I got news for you.

It’s called “revenue sharing”.

Rather have public money spent in Calgary vs Jyotis attempts at spending millions to fight laws in Quebec or propping her political positions

[Mr.Coffee]

Truth is nobody knows how much money they are making because they won’t open their books. Which tells you they’re profitable, actually. Why would you open your books to the public when you’re asking them for a handout?

When a private business goes to the public for a handout for their capital project and then won’t open the books that tells you they’re making money because it probably wouldn’t look good if they were rolling in cash and asking for the public money. Obviously this would decrease the public’s willingness. Which is good actually for keeping the team in Calgary and their right, and it’s better they make money than lose money for the Flames and concept of keeping the team in Calgary vs. Relocation but we shouldn’t pretend that owning the team and signing contracts is some altruistic thing. I find the sentiment a bit odd.

The salary cap ensures that league spending does not outpace revenues so when a team spends to the cap it doesn’t mean anything, really.

[Steve Bozek]

Originally Posted by Mr.Coffee

Truth is nobody knows how much money they are making because they won’t open their books. Which tells you they’re profitable, actually. Why would you open your books to the public when you’re asking them for a handout?

When a private business goes to the public for a handout for their capital project and then won’t open the books that tells you they’re making money because it probably wouldn’t look good if they were rolling in cash and asking for the public money. Obviously this would decrease the public’s willingness. Which is good actually for keeping the team in Calgary and their right, and it’s better they make money than lose money for the Flames and concept of keeping the team in Calgary vs. Relocation but we shouldn’t pretend that owning the team and signing contracts is some altruistic thing. I find the sentiment a bit odd.

The salary cap ensures that league spending does not outpace revenues so when a team spends to the cap it doesn’t mean anything, really.

All reasonable points.
I do think we can thank the original ownership group for the fact we have a team, and the ownership group (or most of the members since the Flames arrived here) for a long history of philanthropy,and encouraging the players to get involved in supporting the community.

[Jiri Hrdina]

Have other teams that have had public funds for their building, opened their books? Honest question as I don't know and wondering if that's a standard part of the playbook or not.

[Mr.Coffee]

Originally Posted by Jiri Hrdina

Have other teams that have had public funds for their building, opened their books? Honest question as I don't know and wondering if that's a standard part of the playbook or not.

I really doubt it. It doesn’t really benefit them at all to open their books I don’t think.

Does anyone know how the revenue sharing works? Does the revenue get pooled and shared equally?

I think owning a NHL team is just about franchise equity appreciation which is still highly profitable. Again, there’s no way the community outreach and philanthropy matches the equity appreciation figure so thanking ownership is a bit odd. They’re just business dudes running businesses. Which is completely fine and necessary in society. But we don’t walk around thanking the owners of Subway or Tim Horton’s or any other local businesses.

[Jiri Hrdina]

Yeah but being operationally positive and owning a business that appreciates in value are two different things

[Bingo]

Guessing this topic didn't go the way the OP intended!

Not really surprising though.

[Strange Brew]

I imagine Flames will be worth $1B in near future. More people are joining the ranks of the super rich every day and pro sports franchises are one of the scarcest assets on the planet.

Focusing the discussion on operating income vs. franchise value isn't the right way to look at it IMO.

It's funny. Three months ago the owners are being criticized because they won't let any GM do a proper rebuild and are way too hands on.

[powderjunkie]

Originally Posted by Jiri Hrdina

Yeah but being operationally positive and owning a business that appreciates in value are two different things

Yup, and people also ignore that its a luxury hobby. The owners suite has a market value of at least a half million dollars per year for only the Flames. Probably worth over $1M/year all thing considered. Massive hosting/networking opportunities.

Then there's a whole bunch of other 'hobby' elements that are much harder to quantify. Many people spend a few hundred bucks on a fantasy pool. Shirley having an IRL team is worth huge premium.

Another thing would be mutual benefits to other companies owned by ownership - e.g. Flames sell advertising to RCR and vice versa.

[CroFlames]

This isn’t a sports “club” like they have in Europe where fans are actually members.

It’s a franchise of the NHL owned by private equity that just tries to maximize profits. We are nothing but paying customers. We don’t belong.

Thanking the owners is like thanking Galen Weston for owning grocery stores and graciously allowing us to shop there. I just use that as an example since I just saw one of his godawful commercials.

[Flaming Horse]

Some good discussions. The main thing is they allow the GM to spend to the cap and we have an enjoyable team to watch that is not a shambles like some teams.Arizona,Buffalo. They are least competent and make it more fun for the hardcore fans. I try to leave the politics out of it because if I didn't I wouldn't even watch.