But as impressive as the Blackhawks have been on-the-ice, the franchise is still losing money off-the-ice. According to Crain’sand their interview with Blackhawks owner Rocky Wirtz, the team’s operating losses are between $10-20 million. Of course, after playing 3 Stanley Cup Finals home games at the United Center, my guess is that estimate is closer to a $10 million loss than a $20 million loss.
(Note that Forbes’ 2011-12 estimate of the Blackhawks operating income was a $20.5 million profit. So it’s hard to tell whether we are off because we don’t have the books, whether the team is overstating its financial hardship, or whether the truth lies somewhere in between.)
Welcome to life in the National Hockey League. A league where team’s cannot be assured an operating profit by virtue of billions in annually shared national media revenues. The NHL currently has a record national TV deal, receiving $200 million annually. Split 30 ways, however, that $6.67 million per team is barely enough to cover the salary of an elite player. And compared to the NFL’s $4 billion in annual media revenues? Forgetta-bout-it.
In the Blackhawks case:
– They generate roughly $50 million in ticket revenue with an average ticket price of $62.88 and nearly 22,000 fans per game at 110% of building capacity (tops in the league). An amount that could be higher if not for the 12% city and county amusement tax that the team must pay.
– They generate $20-$25 million annually from sponsorships, television rights fees, and assorted income such as merchandise sales.
– In 2012-13, player payroll totaled $68 million.
– Additionally, this season’s Stanley Cup run still didn’t make up for missed revenue from a lockout-shortened regular season, when the team continued to pay more than 100 non-player employees.
As Crain’s notes, the top 10 highest-priced teams averaged just below $82 per ticket per game. Wirtz has said that the team’s prices will likely average above $70 next season, but that he still does not wish to embrace dynamic ticket pricing.
Mr. Wirtz, time to embrace the 21st century in sports industry ticket pricing.
Because there are 41 home dates in an NHL regular season, and because games are played on any night of the week as well as some daytime games, there should be considerable game-to-game variability in consumer willingness to pay. Factor in marquee opponents that have long-standing rivalries with Chicago (e.g. St Louis, Detroit, Boston, New York Rangers) sprinkled in with weeknight games versus infrequent foes, and you have all that’s required to make dynamic pricing successfully work.
Hawks fans might think my desire to see Wirtz raise prices is a Blues fans’ passive-aggressive way of taking some joy out of Monday night’s Stanley Cup triumph.
Source- www.Forbes.com
