The Business of Hockey
Last week we reviewed the franchise value of the thirty NHL clubs in preparation for the latest report due from Forbes. Currently the business of hockey is going through some difficult times with the NHL lockout that was imposed by League commissioner Gary Bettman on September 15, 2012. The third lockout and fourth work stoppage in the past twenty years. Billionaires fighting over the pie with millionaires. Look for this standoff to be a long one. Too many issues to negotiate over means this lockout will last for quite some time. There will be no NHL season in 2012-2013 just as there was not NHL season in 2004-2005.
So just how much money are NHL teams making? Are the owners losing money? There has been some discussion that perhaps the league should reduce the number of teams and remove some of the financially challenged teams, which many suggest is in the five to eight range. The team worth of the top teams continues to improve perhaps at the expense of the poorest teams.
2013 NHL Team Worth
The valuation of the 30 NHL hockey clubs again depicts the Toronto Maple Leafs as the most valued franchise in the game with an estimated valuation of around one billion dollars. This despite the team missing the NHL playoffs for seven consecutive seasons. Here is a look at the valuations of the 30 NHL franchises for 2013.
|Rank||Team||Current Value ($mil)||1-Yr Value Change (%)|
|1||Toronto Maple Leafs||1000||92|
|2||New York Rangers||750||48|
|6||Detroit Red Wings||346||3|
|10||Los Angeles Kings||276||19|
|15||San Jose Sharks||223||6|
|19||New Jersey Devils||205||13|
|23||Tampa Bay Lightning||174||0|
|27||New York Islanders||155||4|
|28||Columbus Blue Jackets||145||-5|
|30||St Louis Blues||130||-17|
Forbes has been conducting these lists for over ten years now so while not entirely accurate you have to think that these valuations are somewhat reflective of the state of affairs in the NHL.
Here’s how the top 20 teams compare to one another:
According to reports:
- four teams saw declines in value (Carolina Hurricanes, Columbus Blue Jackets and St. Louis Blues)
- the value of the Toronto Maple Leafs nearly doubled since last year’s report
- the Leafs, Rangers, Canadiens and Winnipeg Jets saw the largest Year Over Year Increase in value
- all 7 of the Canadian teams are within the league’s top 20 most valued franchise (the Jets lead the league in merchandise sales last year propelling them in to 20th in terms of valuations.
- the original six teams are worth an estimated $3.37 billion – so we get an idea of who is really running the league. (The other 24 teams have a combined value of $5.08 billion.
- twelve of the NHL clubs suffered operating losses last year
- the value of the Leafs is nearly equivalent to the combined value of Florida, Nashville, Carolina, the Islanders, Columbus, Phoenix and St. Louis.
- Minnesota, Carolina and St. Louis saw the largest drop in rank since last year’s report each dropping three spots
- the Winnipeg Jets saw the greatest increase improving four spots since last year’s report
- the defending Stanley Cup Champion Los Angeles Kings saw their valuation increase by approximately $44 million since last November
Here is the sad thing about the current state of affairs. The NHL had record profits last year and the League has now locked out their player so that the owners can “level-set” the allocation of revenues. The damage being done by the NHL lockout this time is bound to be more sever than it was in 2004-05. In the 78 days since the lockout has been underway, the League has:
- damaged their brand (especially in weaker US based markets)
- alienated hockey fans
- created the third (fourth?) major work stoppage in league history and is still the only professional sports league to miss an entire season (this may make it two) due to a work stoppage.
- is losing an estimated $15-20 million per day
- forced the players to miss four pay-cheques
- forced hundreds of NHLers to take jobs from other players in league’s across the globe
- damaged the game possibly forever
Some say the business of hockey is pretty good. Right the the business of hockey is ziltch.