10LikesOnly 13 teams lost money according to Forbes (and a couple of those less than $2 million). The number is 18 according to the NHL's lockout negotiation team.
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Yeah well remember, these 2012 numbers just came out. In Nov 2011 it was 18 teams losing money, in 2010 it was 16 teams in the red, and in 2009 the number was 14. It certainly helps when teams like the Devils and Kings made it to the SCFs. I'm guessing the league could live with a couple clubs losing money on a regular basis but not 10–20.Originally Posted by PRMan!!
Well, according to this article, it all may be a mirage. Link:
One franchise that is frequently cited as drowning in red ink is the Florida Panthers, which Forbes Magazinepegged as having lost $7 million last year. During the last nine years, Florida supposedly took a $68 million bath, about $7.5 million annually.
But in a new post, Johnathan Willis of The Edmonton Journal’s Cult of Hockey blog writes about how he hunted down and examined publicly available documents of the Panthers’ parent company’s finances and they show a much different and more complicated picture. Sunrise Sports & Entertainment, which owns the team and controls its arena, actually showed a profit of $117.4 million between 1998 and 2012, including a stretch in which the Panthers missed the playoffs for 10 consecutive seasons.
I would assume most of the parent companies are in the black. Concerts and other things they do are money makers... just not hockey. It's why the owners can sit seasons out losing money on hockey while offsetting it with profits from other enterprises. The players don't have that luxury which puts them at a disadvantage.
But, if you read the article it also points out how the Panthers had their lowest profitability during the last lockout.
Willis believes that the finances of these parent companies, or sister companies — and there are many of them in the NHL — can be structured to show less favorable results for the hockey team while it, as the anchor tenant of the arena, drives all the other events and business. Part of his evidence is that the parent company had its lowest profitability during the 2004-05 lockout year “That’s either an incredibly interesting coincidence, or evidence that the Panthers themselves help make the arena as profitable as it is,” he writes.
Hockey does make a difference. These owners are major business leaders. If they were suffering as bad as they would have us believe, there would no longer be an NHL. Remember the Major Indoor Soccer League? Probably not, because leagues that are not successful, even with large parent companies, don't survive very long.
For those of us who are accounting challenged...
Operating Income:
The amount of profit realized from a business's operations after taking out operating expenses - such as cost of goods sold (COGS) or wages - and depreciation. Operating income takes the gross income (revenue minus COGS) and subtracts other operating expenses and then removes depreciation. These operating expenses are costs which are incurred from operating activities and include things such as office supplies and heat and power. Operating Income is typically a synonym for earnings before interest and taxes (EBIT) and is also commonly referred to as "operating profit" or "recurring profit."
Operating Income Definition | Investopedia
This
But if they didn't own the team, they would never be operating the arena. The team makes the arena profit possible.
It's the same as AEG. Without owning the Kings, they never get involved with Staples, and the billions made on the arena project. So while it's not "hockey operations", it's a direct benefit of owning the Kings.
It's how sports ownership works these days. (see Brooklyn Nets for the latest example)
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