2017 Forbes NHL franchise valuations

[sureLoss]

For what its worth, Forbes has published their valuations of NHL teams:

https://www.forbes.com/nhl-valuations/list/#tabverall

They have 4 teams worth more than a billion dollars.

They value the Flames at $430 million (19th) with revenue of $129 million and an operating income of $5.4 million.

[bubbsy]

interesting...

Ignore, misread column heading.

No doubt that the flames are lower tier when it comes to revenure (20th with $129M), but when you consider the operating costs ($5.4M), you're looking at a profit of ~$125M.

Compared to Edmonton with the new building and all, revenue is $151M with a cost of $24M, leaves a profit of $127M.

Over simplification on my part for certain, but why are the flames stating they are not reaping as much profit here and need a new building to do so?

[pseudoreality]

Slightly less than half the teams have a value greater than the expansion fee of $500MM.

Six teams lost money last year, according to Forbes. They don't actually have access to all the financial details. So it's a best guess.

[Strange Brew]

Pro sports is weird. In what other business would you pay over $400 million for a business that turns an operating profit of $5 million unless it's in start up mode.

[nik-]

Originally Posted by bubbsy

interesting...

No doubt that the flames are lower tier when it comes to revenure (20th with $129M), but when you consider the operating costs ($5.4M), you're looking at a profit of ~$125M.

Compared to Edmonton with the new building and all, revenue is $151M with a cost of $24M, leaves a profit of $127M.

Over simplification on my part for certain, but why are the flames stating they are not reaping as much profit here and need a new building to do so?

It's operating income, not costs, that is listed.

[CaptainCrunch]

Where are you seeing operating costs? The Oilers are bringing in a operating income of 24 million dollars, earnings before interest or taxes.

Calgary is bringing in a operating income of 5.4 million not a operating cost of 5.4 million. That means that before the Flames pay any taxes of interest that's their profit dollars, which might get eroded slightly.

Basically the Oilers are making 22 million more in revenue and about 19 million more in operating Income.

I think you have things backwards

[pseudoreality]

Originally Posted by bubbsy

interesting...

No doubt that the flames are lower tier when it comes to revenure (20th with $129M), but when you consider the operating costs ($5.4M), you're looking at a profit of ~$125M.

Compared to Edmonton with the new building and all, revenue is $151M with a cost of $24M, leaves a profit of $127M.

Over simplification on my part for certain, but why are the flames stating they are not reaping as much profit here and need a new building to do so?

I think you are reading the numbers wrong. The $5.4MM is the Flames operating income, i.e. profit before taxes, interest, amortization, and depreciation. The Oilers made $24MM thanks to a new subsidized building and six home playoff games.

[Madrox]

Bleh, multi-fata.

[belsarius]

N/M already addressed

[yourbestfriend]

delete

[bubbsy]

sorry, i totally mis-read the column.

Apologies for the confusion.

[Benched]

Ah! I was reading it wrong too. And that would explain why Arizona has a negative sign on their operating income....

[nik-]

bubbsy you read it wrong man!

[CaptainCrunch]

Would it be possible to apply the City of Calgary's arena deal to the Edmonton numbers?

If I understand and someone can correct me.

That the city would recoup the $185 million dollars in property taxes, so how much would that be, plus the City would get the revenue streams.

So if the Oilers are bringing in $151 million and 21 million in operating income on that sweet heart deal, what would the Flames be bringing in on lets say $151 million in revenue, if unlike the Oilers the Flames aren't recouping all of the revenue from the building plus paying higher property taxes then the Oilers.

[rage2]

Just a note when reading these numbers, they are purely hockey revenues and income, not ownership group. The operating income for CSEC is likely higher as they run and profit off Saddledome events.

As an example, the Panthers continue to bleed every year without going broke. The ownership group actually pulls in $20-30m of income per year, even with the Panthers losing $11m this year and every other year. It's the Panthers that got them the arena deal in the first place that allows them to run and profit off all the events. The Panthers are essentially a loss leader.

edit - Oilers as an example, the money isn't made in Hockey. OEG's numbers would be much higher because they make money from events at Rogers Place. The big money gets made by Katz Group Properties in developing the Ice District.

[pseudoreality]

Originally Posted by CaptainCrunch

Would it be possible to apply the City of Calgary's arena deal to the Edmonton numbers?

If I understand and someone can correct me.

That the city would recoup the $185 million dollars in property taxes, so how much would that be, plus the City would get the revenue streams.

So if the Oilers are bringing in $151 million and 21 million in operating income on that sweet heart deal, what would the Flames be bringing in on lets say $151 million in revenue, if unlike the Oilers the Flames aren't recouping all of the revenue from the building plus paying higher property taxes then the Oilers.

Don't forget playoff revenue. The Oilers had 13 playoff games, 6 at home. The Flames had 4, 2 at home. I'm not sure how it all gets divided currently. At one time the home team got to keep all the gate revenue in the playoffs, but it's not like that anymore. Still, its fair to assume the Oilers received triple the playoff revenue as the Flames did last year.

$5.2MM operating income is a pretty slim margin. I'm surprised the Flames spend as much as they do on salaries being that tight, but sports isn't about smart business.

[CaptainCrunch]

Originally Posted by rage2

Just a note when reading these numbers, they are purely hockey revenues and income, not ownership group. The operating income for CSEC is likely higher as they run and profit off Saddledome events.

As an example, the Panthers continue to bleed every year without going broke. The ownership group actually pulls in $20-30m of income per year, even with the Panthers losing $11m this year and every other year. It's the Panthers that got them the arena deal in the first place that allows them to run and profit off all the events. The Panthers are essentially a loss leader.

The money bought in by the Stamps or Hitman or roughnecks for example, really doesn't come into play when they're strictly talking about NHL franchise valuations though.

If we were talking about the CSEC selling all of its properties in one transaction then what your saying would be valid.

[nfotiu]

One thing that is pretty obviously broken about this league is that the salary cap has boosted the profits of big hockey market teams, and left the smaller hockey markets losing significant amount of money.

I don't see any reason for hope for those bottom tier teams to ever turn a profit. Local and national TV money is going sharply correct itself soon, and could get really ugly for a third of the league.

One interesting thing is compare how Florida and Calgary make money.
Calgary 58 million in gate receipts and 129 million in total revenue.

Florida 16 million in gate receipts and 100 million in revenue.

So, while Calgary fans spend almost 4 times as much on tickets as Panthers, the Panthers make 84 million in other revenue vs Calgary's 71 million. Where the hell does this money come from? A big chunk is league wide revenue like National TV, but I suspect a big chunk of that is from TV revenues as they are able to collect subscriber fees from a large area. A fun fact though is that the Panthers average around 5000 people watching their games! When forced bundled tv money goes away, their tv rights are worth less than zero. It would cost money to put the games on TV.

[rage2]

Originally Posted by CaptainCrunch

The money bought in by the Stamps or Hitman or roughnecks for example, really doesn't come into play when they're strictly talking about NHL franchise valuations though.

If we were talking about the CSEC selling all of its properties in one transaction then what your saying would be valid.

Oh I agree for valuation sakes. I'm just making sure people look at the big picture, and that a money losing hockey team isn't the end of the world if there are tangible benefits elsewhere.

[CaptainCrunch]

Originally Posted by rage2

Oh I agree for valuation sakes. I'm just making sure people look at the big picture, and that a money losing hockey team isn't the end of the world if there are tangible benefits elsewhere.

I get that, but I don't think that the Stampeders, Roughnecks and Hitman combined are that big of a dollar or profit bump.