Around the NHL (Part XIII): RIP Bob Suter

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Illinihockey

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Two lockouts initiated by owners that wanted a bigger piece of the pie after bragging during every non-lockout year about ever growing revenues.

Greediness isn't a sign of actual trouble, either. The NHL's in better shape now than at any point since at least 1967. There've always been troubled franchises and issue that impact the league, but at no point in hone past have revenues and public interest been higher north or south of the border.

http://www.forbes.com/sites/kurtbad...about-the-benjamins-and-who-doesnt-have-them/

The NHL’s problem is the widespread disparity in profits for its 30 teams. We estimated that 18 teams lost money during the 2010-11 season in our annual look at the business of hockey.
The Toronto Maple Leafs, New York Rangers and Montreal Canadiens had an operating profit (in the sense of earnings before interest, taxes, depreciation and amortization) of $171 million combined. The other 27 NHL teams lost a collective $44 million. If you add the Vancouver Canucks and Edmonton Oilers to the fat cats ledger, profits hit $212 million with the remaining 25 teams posting a loss of $86 million.
 
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No Fun Shogun

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And teams are often used as loss leaders, only for a profit to be turned on the eventual sale or through other means. Heck, the Wirtz's still claim that the Blackhawks are losing money, or at least they were still making that claim very recently.

The fact still remains that the NHL's never been on better legs than it is right now, though it's up to you if that's a positive statement about today or a negative one about the past. And, what's more, even if the league were in bad shape, wouldn't that make relocating troubled teams to more attractive markets and getting a relocation fee out of that more fiscally responsible than just buying out teams to contract them?

I have no doubt that the league would like more teams to turn a profit at the gate by themselves, but I'm not going to believe the lion's share of their obvious creative accounting.
 
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Illinihockey

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Right so some teams lost money...that is why there is revenue sharing. Net EBITDA of $126 million is actually pretty healthy. That does not take into account other measures of team wealth.

Not some, the majority of teams are losing money. Thats not the sign of a healthy league. The reason there was a lockout is because of these losses.
 

Illinihockey

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And teams are often used as loss leaders, only for a profit to be turned on the eventual sale or through other means. Heck, the Wirtz's still claim that the Blackhawks are losing money, or at least they were still making that claim very recently.

The fact still remains that the NHL's never been on better legs than it is right now, though it's up to you if that's a positive statement about today or a negative one about the past. And, what's more, even if the league were in bad shape, wouldn't that make relocating troubled teams to more attractive markets and getting a relocation fee out of that more fiscally responsible than just buying out teams to contract them?

I have no doubt that the league would like more teams to turn a profit at the gate by themselves, but I'm not going to believe the lion's share of their obvious creative accounting.

So there has been 2 lockouts in 9 years because the owners are faking losses. They voluntarily chose to shut their business down and lose nearly 2 seasons but secretly they are all making a ton of money. Got it.
 

Sarava

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Not some, the majority of teams are losing money. Thats not the sign of a healthy league. The reason there was a lockout is because of these losses.

With us seeing firsthand how Wirtz 'cooks the books' to show a loss....one would be naive to think many other owners aren't doing the same. It's to the point where you just can't take it seriously.
 

Kurtosis

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Not some, the majority of teams are losing money. Thats not the sign of a healthy league. The reason there was a lockout is because of these losses.

It doesn't matter when revenues are shared. The lockout was over who was getting what with regards to the piece of the pie.

And to echo what Sarava said...we do not have access to any of the income statements, balance sheets, or cash flow statements of these teams due to the fact they are not publicly traded. I would like to see how revenues and losses are reported as well as accounting tricks that usually occur with depreciation before we doom the league.

The Wirtz family is still probably reporting losses. I would love to see what number they put out at the end of their accounting period.
 

Illinihockey

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It doesn't matter when revenues are shared. The lockout was over who was getting what with regards to the piece of the pie.

Right, and the owners wanted more because they aren't making enough money. They didn't shut down their business because they were raking in the cash.
 

Kurtosis

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Right, and the owners wanted more because they aren't making enough money. They didn't shut down their business because they were raking in the cash.

Where did I say they were raking in cash? They wanted a bigger piece of a pie that was already generating positive cash flows. They weren't trying to stem the tides of negative cash flows.
 

No Fun Shogun

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So there has been 2 lockouts in 9 years because the owners are faking losses. They voluntarily chose to shut their business down and lose nearly 2 seasons but secretly they are all making a ton of money. Got it.

Revenues are at all time highs, HRR is specifically defined in such a way that lots of obvious areas of revenue generation aren't included, and the proportion of overall revenue that goes to ownership goes up with each successive lockout (and will happen again with the next lockout).

Yeah, the lockouts are caused by owners fudging numbers, increasing their share of the pie by forcing a situation where they can recoup losses from a lockout with increased revenues later and players can't, and what's more the lockouts aren't as bad as you'd think to owners, as while their revenue stream is cut, they still have access to contractural sources of revenue that they still get paid regardless and merchandise sales. And the added benefit of having tens of millions of dollars in reduced salaries for a year can't be forgotten either. Whatever they lost in the past lockout will be more than compensated for with increased revenues that they have access to in the new CBA while it's in effect, especially from new TV deals.

I didn't say that they were faking all losses, some teams are losing money. Not everything's peachy, and I didn't claim that it was. But they are exaggerating losses and being disingenuous with the overall economic health of the league and individual teams when it's convenient for them. The NHL does have very real issues, but the overall health of the league is still at an all-time high.

Simply put, over the past decade, their share of overall proportion of revenue has gone up dramatically and so has the overall amount of revenue. And teams are mostly being sold without too much issue, the Yotes being a notable exception.
 

Kurtosis

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I don't even believe the numbers teams post as their operating incomes to be honest. Until we have access to the actual financials (which will likely never happen) I am going to take the numbers posted with a grain of salt.
 

Illinihockey

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I don't even believe the numbers teams post as their operating incomes to be honest. Until we have access to the actual financials (which will likely never happen) I am going to take the numbers posted with a grain of salt.

So they are committing accounting fraud?
 

Illinihockey

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No, but they can choose to report things differently and we don't have access to how they do report things.

Unless theres a situation where the team owns part of the arena like with the Hawks, theres not a lot of ways to fudge operating income. Plus the players certainly have access to these financials when the agree to give up money to the owners in lockouts.
 

Kurtosis

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Unless theres a situation where the team owns part of the arena like with the Hawks, theres not a lot of ways to fudge operating income. Plus the players certainly have access to these financials when the agree to give up money to the owners in lockouts.

They do not have to adhere to GAAP so who knows how they define revenues and expenses. While your last point is valid it also speaks to why the players were fighting tooth and nail to retain their percentage (maybe the league is healthier than they are letting on?).
 

Hawkaholic

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All this talk brings me back to 2012-13. Had a few heated arguments on here about whether teams were actually losing money or not.

I believe some teams are, but the majority of the league isn't. The league is as wealthy as ever, the owners just wanted a bigger piece of the pie.
 

No Fun Shogun

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Agreed. Blackhawks are only losing money by specifically excluding a bunch of areas that are part of the Hawks (game day concessions and parking, for instance) and taking into account payments from the Hawks (owned by Wirtz) to the overall parent group (also owned by Wirtz) to make up for past loans from the Dollar Bill era. And that's ignoring the obvious half stake that they own in the UC, which they only have because they own the Hawks.

In other words, creative accounting.

Just slightly less disingenuous than the Ricketts' crying poor because they overpaid for the Cubs and aren't making as much as they would've liked out of a bad team and a not-state-of-the-art venue.
 

Illinihockey

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In a Stanley cup winning season in a major market if you aren't turning a profit in a capped league then the NHL will be folding shortly.

Seriously man. You believe for a second the Hawks lost and are losing money?

Folding, or they'd be having a second lockout in 9 years which...oh ya, happened.
 
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