Analysis - Jets Home Game Revenues - Playoff $

[jimsabo21]

Hi All,

As someone very interested in the business of sports, I took a bit of a deeper dive into Jets (per game) ticket and concession revenues. Also, I wanted to analyze the impact of each home playoff game.

Rather than simply use an "average ticket" price, I actually used each seating section to come up with regular season game revenues:

Class of Seats	# of seats
Loge	278
P1	2172
P2	1612
P3	2446
P4	1532
P5	1696
P6	3276
P7	1152
SUITES	48

[TBODY] [/TBODY]

If you exclude suites, Bell MTS Place only has 14,164 seats. With Season Tickets capped at 13,000, that leaves 1,164 unsold seats per game that (theoretically) sell at the premium game day price. Into my model, I assumed that approximately 2% of seats are unsold on an average basis (singles, unpopular weekday games, etc).

So, for example, in P1, the season ticket price is $162.61 per game, and the "walk up" price averages $210 per game. In my model, I assumed that 93% of those seats are season tickets, 5% are walk up prices, and 2% unsold (singles, pre-season, etc). I did the same for each pricing category.

Bell MTS Place has 48 suites, and the prices averages $4000 per suite per game.

So, with 2% unsold seats + 5% of fans paying "walk-up" ticket prices, and 48 suites, the Jets ticket revenue should be very close to $1,598,000 per pre-season / regular season game.

45 games (reg season + pre-season) = $71,910,000 ticket / suite revenue per season

Concessions is a very difficult assumption, but I think a conservative estimate would be $10 per person in attendance. Between Suites, and regular ticket holders, that works out to $150,000 per game. This certainly isn't all profit; there is a cost to man the kiosks, produce the goods, etc. However, I think it would be safe to assume an 75% profit margin that the prices they charge. That adds approximately $112,000 of profit per game x 45 per season = $5,062,500.

* I know and understand concessions are fully outsourced to 'CenterPlate'; however, I would presume the number above would be the Jets "take" on the deal

Suites + Tickets + Concessions = $76,972,500 in annual revenue

Playoffs:

Seems like the average mark-up on Season Ticket Pricing in playoffs is 35%. It's very safe to assume that each game in the 1st round is worth $2,157,300 of gate revenue. VERY IMPORTANT TO NOTE, AS PER CBA REVENUE SHARING, 35% OF ALL PLAYOFF TICKET REVENUE IS RETUNED TO LEAGUE.

So, the Jets take on "ticket revenue" is reduced by 35% = $1,402,245 per game. I can only assume that concession sales (specifically beer sales) would nearly double at a playofff game, so I'll assume $20 per attendee. At 75% profit margin, that adds $226,500 to the bottom line per playoff game.

All together, I think each game in round 1 of the playoffs is worth $1,628,745 per game

While (because of the league 35% rake on playoff sales) this seems lower than a regular season game, keep in mind players are not paid by Jets for playoffs - that is all league payments. So, this number is nearly pure profit (minus travel costs, etc ...).

Round 2 (with increased ticket prices) minus league 35% take = $1,916,500 per game

Round 3 (same logic) = $2,436,500 per game

Stanley Cup Finals = $2,761,500 per game

 

[Spock]

Your model relies on guesswork for some critical variables.

 

[Larabee]

Interesting how attendance related revenue closely follows the salary cap. Other revenue (TV, NHL merchandising, expansion fees, advertising) would all be pure profit.

 

[King Woodballs]

The jets are a break even team without playoff revenue.

That is 75 million Canadian. Their may biggest expense (player salaries) is put out in American. So if a team spends 80 million on salaries that is approximately 100 million Canadian. They need to make that 25 million up in revenue somewhere. Like tv deals advertising etc. That also doesn't take into account travel, hotels, meals, etc etc.

Also doesnt take into account the arena costs. That is a separate arm of true north but it all adds up!

This is why being a consistent playoff team is key to the success of any franchise. Especially those in small markets.

 

[raideralex99]

Nobody really know how much money is made unless they are in the elite upper class. Rich people are not stupid they do not invest or run a businesses to lose money.
When a team goes deep into the playoffs the local businesses make millions especially restaurants and bars that's why a lot of corporate businesses invest in season tickets.

 

[jets2020champs]

I read somewhere that sports franchise owners don’t make lots of money. It’s the value of the franchise that goes up and that’s how they make money, when they sell the franchise. It was an article on soccer teams in Europe but they generalized it to most sports teams.

 

[Briscodog]

So a couple of things about the suites. My company’s suite holds 20 seats. We split the suite with another company and we each take 10 seats per game. My food and beverage bill for each game averages about $750. Keep in mind that’s just our half of the suite. I would guess we’d be middle in regards to food and bev expenses. And my company has to pay for the playoff tickets as well. I guessed each playoff game brought in close to 3 mil in the first round.

 

[Aavco Cup]

Interesting how attendance related revenue closely follows the salary cap. Other revenue (TV, NHL merchandising, expansion fees, advertising) would all be pure profit.

You are forgetting about all the other expenses besides player salaries. Travel, non player personnel, marketing and the like. Those costs are in the $40-50M range IIRC

 

[jimsabo21]

So a couple of things about the suites. My company’s suite holds 20 seats. We split the suite with another company and we each take 10 seats per game. My food and beverage bill for each game averages about $750. Keep in mind that’s just our half of the suite. I would guess we’d be middle in regards to food and bev expenses. And my company has to pay for the playoff tickets as well. I guessed each playoff game brought in close to 3 mil in the first round.

It's for sure not $3,000,000 per game for the first round. The playoff prices are posted, so the math is quite easy on that one. I assumed Suite tickets would go up by the same % as all other seats. That works out to $2,157,000 per game. The *huge* variable is how much exactly everyone spends on concessions, and what the profit margin is on that particular number. Above that, how much goes to the Jets, and how much goes to Centerplate?

Keep in mind, 35% of all playoff tickets sales go to the league - so shave 35% off any local ticket revenue.

Regarding other team revenues, this we know for sure:

Each Canadian Team gets 14.5mm annually from Rogers (the remainder split amongst the 24 other US teams)
Each team gets $6,450,000 USD from NBC
TSN *rumoured* to pay approximately $10,000,000 CAD for Jets rights (includes TV and Radio)

So, we know (with reasonable certainty) the Jets revenues without hosting a playoff game would be:

$76,970,000 CAD (tickets / suites / concessions)
$14,500,000 CAD (Rogers National Broadcast Rights)
$10,000,000 CAD (TSN Radio + TV local rights)
$6,450,000 USD = 8,260,000 CAD (NBC TV Rights)

$109,730,000 CAD in Revenues:

+ NHL Apparel Rights Deal (Addidas / Fanatics) - $ unknown
+ NHL League Wide Sponsorship Deals - $ unknown
+ NHL Special Events (All-Star Game / Outdoor Games / Etc) - $ unknown
+ Bell MTS Place Naming rights - $ unknown
+ local rink board advertising - $ unknown
+ local Jumbotron advertising - $ unknown
+ + + other unknowns

 

[Channelcat]

I read somewhere that sports franchise owners don’t make lots of money. It’s the value of the franchise that goes up and that’s how they make money, when they sell the franchise. It was an article on soccer teams in Europe but they generalized it to most sports teams.

Profits for NHL franchises are relatively low. They are still paying a massive % of revenues to player salaries compared to other sports leagues

 

[HannuJ]

add in around $250000/game in beer profit alone.
i'd guestimate around $75000 in food profit per game.
add in various sales for another $50 000 in profit and it's probably around $2.5 million profit/game.
a Cup run probably scores you close to $40 million in pure profit.

 

[ulf]

Nobody really know how much money is made unless they are in the elite upper class. Rich people are not stupid they do not invest or run a businesses to lose money.
When a team goes deep into the playoffs the local businesses make millions especially restaurants and bars that's why a lot of corporate businesses invest in season tickets.

As far as running a $ losing business goes.....it's not the bottom line. If the Jets lost say $7 million a year for 7 years but the saleable value increased from say a $200 million purchase price to a saleable value of $400 - $600 million, Thompson and Chipman are doing very well.
So many other factors factor in it would hurt my brain to go there

 

[Briscodog]

It's for sure not $3,000,000 per game for the first round. The playoff prices are posted, so the math is quite easy on that one. I assumed Suite tickets would go up by the same % as all other seats. That works out to $2,157,000 per game. The *huge* variable is how much exactly everyone spends on concessions, and what the profit margin is on that particular number. Above that, how much goes to the Jets, and how much goes to Centerplate?

Keep in mind, 35% of all playoff tickets sales go to the league - so shave 35% off any local ticket revenue.

Regarding other team revenues, this we know for sure:

Each Canadian Team gets 14.5mm annually from Rogers (the remainder split amongst the 24 other US teams)
Each team gets $6,450,000 USD from NBC
TSN *rumoured* to pay approximately $10,000,000 CAD for Jets rights (includes TV and Radio)

So, we know (with reasonable certainty) the Jets revenues without hosting a playoff game would be:

$76,970,000 CAD (tickets / suites / concessions)
$14,500,000 CAD (Rogers National Broadcast Rights)
$10,000,000 CAD (TSN Radio + TV local rights)
$6,450,000 USD = 8,260,000 CAD (NBC TV Rights)

$109,730,000 CAD in Revenues:

+ NHL Apparel Rights Deal (Addidas / Fanatics) - $ unknown
+ NHL League Wide Sponsorship Deals - $ unknown
+ NHL Special Events (All-Star Game / Outdoor Games / Etc) - $ unknown
+ Bell MTS Place Naming rights - $ unknown
+ local rink board advertising - $ unknown
+ local Jumbotron advertising - $ unknown
+ + + other unknowns

Your off on the local rights. TSN pays the Jets 3.5 mil per year for local tv and radio rights.

 

[Tom ServoMST3K]

The estimates I've read from analysts about 5 years ago was the value of a playoff game was about $1 million.

 

[arbf412]

Keep in mind in recent years the teams have taken back a pretty big chunk of the money in escrow, so just because the payroll is $X doesn’t mean that’s the true cost to the club.

 

[Gm0ney]

Your off on the local rights. TSN pays the Jets 3.5 mil per year for local tv and radio rights.

Wow...if that's true, the Jets made a terrible deal. Why would they sign for 10 years for that little money? Ottawa's reportedly getting $30M/year on their local rights deal from TSN - and they're not even the most popular NHL team in their market.

 

[Spock]

Your off on the local rights. TSN pays the Jets 3.5 mil per year for local tv and radio rights.

Wow...if that's true, the Jets made a terrible deal. Why would they sign for 10 years for that little money? Ottawa's reportedly getting $30M/year on their local rights deal from TSN - and they're not even the most popular NHL team in their market.

That is a large gap. I'd like to see the sources of both figures.

 

[Gm0ney]

That is a large gap. I'd like to see the sources of both figures.

Bruce Garrioch reported the Sens number in the Ottawa Sun: WOW! Ottawa Senators TV deal worth up to $400M

 

[Board Bard]

Bruce Garrioch reported the Sens number in the Ottawa Sun: WOW! Ottawa Senators TV deal worth up to $400M

I wonder if TSN delivers the money in a brown paper bag in a local restaurant. That's the way they do it in Ottawa, isn't it?

 

[wpgfishfan]

ACC in Toronto is changing to Scotia Bank Arena July 1. Toronto is getting 40 mill a year for 20 years. So our naming rights should have also gone up substantially

 

[jimsabo21]

Your off on the local rights. TSN pays the Jets 3.5 mil per year for local tv and radio rights.

I have no source to prove you wrong - but I'd be absolutely shocked if that was the case. That would make the Jets the lowest local TV rights in the league. Montreal gets 61MM per year from TSN/RDS. Toronto gets 40MM per year. Ottawa (combined TSN + RDS) is 33mm. Vancouver is 25MM with renewal rights coming up shortly. There is just no conceivable way True North would have been confident bringing the Jets back to Winnipeg if they could only get 3.5mm per season TV money.

By the way, the Jets local TV averages over 100K viewers per game.

For reference sake, the Dallas Stars (who's local ratings are about 10,800 households per game) signed a 20MM USD local TV deal.

Hot Air: Dallas Stars' TV ratings disappoint, too; 'a dream matchup' in first round of NBA playoffs

http://hfboards.mandatory.com/threads/nhl-local-not-national-tv-contracts-by-value.1613865/

 

[Jets4Life]

How much money did the Jets make during their run in the playoffs. I'm assuming it was significant, especially for the Vegas series.

 

[blues10]

The jets are a break even team without playoff revenue.

That is 75 million Canadian. Their may biggest expense (player salaries) is put out in American. So if a team spends 80 million on salaries that is approximately 100 million Canadian. They need to make that 25 million up in revenue somewhere. Like tv deals advertising etc. That also doesn't take into account travel, hotels, meals, etc etc.

Also doesnt take into account the arena costs. That is a separate arm of true north but it all adds up!

This is why being a consistent playoff team is key to the success of any franchise. Especially those in small markets.

The league is helping the Jets out to offset the low CDN dollar.

This summer will be unlike any other in the history of the team: sky-high expectations combined with a high payroll that will stretch the limit of the salary cap. But Chipman isn’t worried.
“We’ll be well over $100 million Canadian. But fortunately the collective bargaining agreement that we operate under has a built-in mechanism for a market like ours that, through cost-redistribution, really offsets a great deal of that foreign exchange risk. A lot of our revenue comes in US dollars. Long story short, we’re on very solid footing and we will be for many years to come.”

‘The further you go, the more it stings when it ends’: Mark Chipman reflects on Jets playoff run

Playoff runs certainly help the bottom line with some playoff money being given to the league.

 

[Jets 31]

All i know is there is no way Chipman and Thompson are doing this and losing money , they may not be making a ton of money but they are doing ok . The more we make the playoffs the more they will make in profit , especially long playoff runs like this season .

 

[powder88]

Profits for NHL franchises are relatively low. They are still paying a massive % of revenues to player salaries compared to other sports leagues

Sorry, but this just isn't true. The most contentious part of the last CBA negotiations was tying league revenues to player salaries. As a whole league, it is virtually impossible for them to lose money as a result. While there are certainly some teams that runs deficits and others that are on the cusp, the Jets are certainly not one of them, nor are most of the Canadian teams, despite the exchange rate exposure.

Someone was very correct to point out that that, to some extent, the salary cap is an aspirational number. Most years, clubs simply do not pay out the total value of the contracts that are signed. It may be 88%, or 93%, or 96%, but it is never 100% and that is how the league (and the Jets) will survive going forward. If you are filling your building and at average or above for merchandise sales, the revenue sharing and HRR-Salaries relationship means you are in the black.