Minnesota Wild General Discussion - 2023-24

[MNRube]

Our top 5 forwards in a couple years should be quality enough to contend (Kap, Boldy, JEE, Rossi, Yurov?). But we desperately need another couple high-end pieces on the blueline. Of course goaltending is obviously hugely important but Wallstedt is as promising as any under-25 goalie on the planet.

I think the franchise is looking pretty robust long term. Faber & Rossi showing out this year has changed a lot IMO and probably saved Guerin his job & reputation

 

[AKL]

Just because not every team that gets high draft picks goes on to win a Cup with those picks doesn't mean most teams that win the Cup don't do it on the backs of high draft picks. St. Louis and Vegas are the only teams in recent memory that have bucked the trend of winning with high draft picks. And Vegas still had those players, they just acquired them in other ways.

Everyone uses teams like Arizona, Buffalo, Edmonton, etc to "disprove" the idea that tanking gives you a better chance to win in the long run, but that's not how that works. No one said it was a guarantee that tanking leads to a Cup. You can't disprove the idea that Colorado, Tampa, Washington, Pittsburgh, Chicago, Los Angeles and even Anaheim and Carolina going back to the mid-00's, had at least one, if not multiple major cogs they found in the top 5-10 picks of a draft.

It's obviously not a thing where you just get 2-3 top 10 picks and you're guaranteed a Cup. You obviously need to pick the right guys in those spots (and maybe some of that is luck), and you obviously still need to build the team around those guys, but the Wild have done plenty in their existence to prove that you can't build a team around the stars if you don't have the stars in the first place. The stars are the hardest pieces to get in place. That's why so many teams "take years off" for the big ones like McDavid and Bedard. That's why most teams will go through cycles where they sell off anything that isn't bolted down to get better draft picks. That's why they'll try to acquire more draft picks along the way than the seven they're given every year.

Getting a Cup winner from "tanking" isn't a method with a 100% success rate, that shouldn't need to be said, everyone knows that. But there's a reason more teams choose that method than the method the Wild have employed since Leipold took over.

 

[Dr Jan Itor]

Things we need to be a long-term contender, without needing a top pick (or picks):
1. Kaprizov to stick around on a decent contract.
2. Yurov to be a PPG or PPG+ center.
3. Faber to be fully legit #1 defenseman (McAvoy).
4. Gus to be Gus from last year until Wallstedt becomes Gus from last year.
5. 2 more fully legit top 4 defenseman.
6. Probably 1 more fully legit top 6 player.

In theory, we already "have" 1-4 in the system. Getting 5 and 6 shouldn't require top 5 picks.

 

[AKL]

Things we need to be a long-term contender, without needing a top pick (or picks):
1. Kaprizov to stick around on a decent contract.
2. Yurov to be a PPG or PPG+ center.
3. Faber to be fully legit #1 defenseman (McAvoy).
4. Gus to be Gus from last year until Wallstedt becomes Gus from last year.
5. 2 more fully legit top 4 defenseman.
6. Probably 1 more fully legit top 6 player.

In theory, we already "have" 1-4 in the system. Getting 5 and 6 shouldn't require top 5 picks.

Not advocating for "tank" years and high picks now, it's far too late for that (until Kaprizov leaves).

Assuming Kaprizov stays at keep performing at this level he is now (after the start of the season) well into his 30s, we don't need the high picks. If Kaprizov leaves you might as well kick off the rebuild then and there.

Yurov still has a lot of question marks, wouldn't count on him becoming a PPG+ center anymore than I would count on Rossi becoming that.

Two of your three most important points in this list are the two most questionable. No doubt we can get 5 and 6 through free agency or trades, but we've never at any point had any problem with those, they don't make you contenders without 1 and 2 (and 3, but 3 is the safest bet of the top 4 for me).

 

[BagHead]

You guys ready for a text wall of business nerdom? I hope so!

I think some owners view their franchises as a business, and others view them as if they, themselves, are a part of the team and they want to win the Cup. Others yet have a hybrid viewpoint, where it's both a business, and they want to win. They're willing to pay up to the cap, but they want to stay cash-flow positive.

There are generally two ways to make a successful business, 1) you make a business that is called a "cost leader", which runs "low to the ground" operationally. This would be a cap floor team, low ticket prices, but also low overhead. Or 2) you make a business that is called a "differentiator". This would be a contender, a high quality product is the name of the game.

Both of those approaches have strengths and risks attached to them:

1. While the cost to run the business is lower for a cost leader, attendance will also be lower because most people don't want to watch a team lose regularly. Their sales will be to people who are diehard fans, and people who are not regulars, but are looking for something fun to do for cheap (you can't have high ticket prices if the product is poor. Nobody would pay for them). If their sales dip too low, they won't break-even in spite of the low operational costs. Sometimes these teams also get a lucky and ice a surprisingly competitive edition. In those cases, the team will likely have an outperforming year financially as well, as ticket sales rates and merchandise sales increase. If they make the playoffs they will end up being able to obtain revenue for cheaper (not free) because a major cost of revenue will be gone: paying the players. All other costs of revenue and expenses are still present in the playoffs (paying hot dog vendors, ticket booth workers, beer suppliers, advertising, etc.).
2. On the other hand, differentiators need to win regularly, because they need to convince their fans that their product is worth paying a high cost for. If they don't sell out the arena and push merchandise and high-end TV deals, their higher costs may result in net losses rather than net profits. The risk for them is falling short and becoming a regular bubble team (or god forbid, a losing team), resulting in having their fans lose interest and not selling the arena out anymore, while their costs are still quite high. They do have an increased chance of making the playoffs due to their approach, and their cost of revenue will be lower (again not free) as a result of not having to pay the players once there.

Business101 aside, I did find two websites which follow the business numbers of NHL teams a bit.
First is Forbes.

• Scrolling down on this page you'll find, for each franchise, the 2023 Current Value (calculated by Forbes as Equity+Debt), 1-year %change in Current Value, Debt to Value (this is the mix amounts of equity and debt. 0% means no debt/all equity, 100% means all debt/no equity... you want this to be lower than 50% at worst), Revenue, and Operating Income.
• This is a unique market, one which I would say is highly competitive (NHL teams fight for fans from franchises in other sports and, in the east, NHL teams even fight with each other for fans, and therefore revenue). This isn't really born out in the numbers here, but it does effect how good of an investment a franchise is. Less competition is better if you're an owner.
• Interestingly, the Current Value of each franchise is not at all in line with the standings, even over the last 10 years. It seems to be almost entirely in line with population in the area where the team plays, and by how popular hockey is in that area. I'd say that there then appears to be some small influence of the teams being good.

This one is for the people who think an NHL franchise is a poor investment, from Mercer Capital.

• Scrolling down, you'll see the Compounded Annual Growth rates (CAGr) for each of the sports leagues. This totals up the teams in the leagues over those periods of times, and treats them as a single entity, in order to compare the leagues to stock market indexes.
• Long term, the NFL, NBA, and NHL have been relatively close in terms of annual return, but the MLB has been well behind. 2% over the course of 25 years is a HUGE deal. If you put $10,000 into an index and just let it sit for 25 years, 10% CAGR gets you $120,569, and 12% gets you $197,885.
• The S&P500 and the Dow Jones have returned ~7%, and the NASDAQ ~10%. By this measure, owning a sports franchise IS actually a good investment - heck, even a great investment. The downside is that it's illiquid at best, so you wouldn't want the majority of your wealth tied up in it. If you're a minority owner, you'll likely have to sell for less than fair value to get out, which would cut into your gains quite a bit.
• The only period where the NHL underperformed ANY index was the NASDAQ between '91-00, a period known as the dot com bubble. Look at the NASDAQ's '01-10 to see the ramifications of a bubble pop.
• I'm less certain of how they'll do in the future, as TV is changing rapidly right now.

tl;dr The bottom line is that sports franchises are a good business to own, as long as you're the majority owner. Even if your strategy has failed, you've still made money. There is also more than one way to run a sports franchise business successfully, and risks that go with any approach. Some owners only care about the business, and run them in a way that is not competitive in regards to quality of product. Some prefer to have a quality product, because there is also money in doing that. Some prefer to run a quality product, no matter if they lose money or not. Just like any population of people, NHL owners have different personalities, different outlooks on business, and different things they want out of their businesses. Painting them all with one brush does, whichever brush you choose, is imperfect.

 

[AKL]

And Leipold seems to be the hybrid. He wants to win insofar as the team remains cash-flow positive. In other words, his top priority is making a profit, and he wants to win as much as he can within that scope, he's not willing to go cash-flow negative for a couple years to do a proper rebuild.

Further, he wants to be a differentiator, but that part is constantly at odds with him always looking to remain cash-flow positive.

A lot of owners across sports will move between being a "cost-leader" and a "differentiator", that's where it becomes cyclical. Chicago is a great example of this in recent history.

• From the early 90s to the late 00s they were pretty bad for a long time, obviously not all intentional. They weren't a premier franchise, they weren't selling out games, costs were cheap.
• After they got pieces like Kane, Toews and Keith, the on ice product vaulted to the top, as did the fan support, costs were up, revenue was way up, they were the gold standard for 8 years or so.
• Then they started another rebuild. Costs are way down, revenue is down a bit from where it was.
• Now they have Bedard and another top pick in 2024, and in time will figure to be close to where they were from 2008-2016.

That's the way a lot of teams will operate, or at least try to operate, over a long period of time. When your window is over you cut costs, stockpile talent, build for a future period where you go all out, spend to the cap, and can raise prices because your team is good. Those teams may not always be cash-flow positive in the down years, but in the high years they're making enough to offset it.

Leipold, on the other hand, chooses to remain cash-flow positive above all else, which means always going for the wins because a playoff team will almost always be cash-flow positive, even if it's clearly first round fodder.

 

[roon]

I mean, has it? Provide me a list of teams that it’s worked out for. I can provide an even longer list that it hasn’t worked out for.

Colorado
Chicago
Pittsburgh
Tampa Bay

To name a few.

Things are looking bright in Buffalo from a young talent to build around standpoint. You can also take a look at New Jersey, certainly having more success than Buffalo this year - again Top 10 draft picks leading the way.

 

[Dr Jan Itor]

Not advocating for "tank" years and high picks now, it's far too late for that (until Kaprizov leaves).

Assuming Kaprizov stays at keep performing at this level he is now (after the start of the season) well into his 30s, we don't need the high picks. If Kaprizov leaves you might as well kick off the rebuild then and there.

Yurov still has a lot of question marks, wouldn't count on him becoming a PPG+ center anymore than I would count on Rossi becoming that.

Two of your three most important points in this list are the two most questionable. No doubt we can get 5 and 6 through free agency or trades, but we've never at any point had any problem with those, they don't make you contenders without 1 and 2 (and 3, but 3 is the safest bet of the top 4 for me).

True, but he's tracking close enough to Kaprizov that I'm allowing myself to consider the possibility.

 

[AKL]

True, but he's tracking close enough to Kaprizov that I'm allowing myself to consider the possibility.

He's promising, there's a reason I unilaterally declared myself the Danila Yurov Fan Club President before anyone else could take the title.

 

[BagHead]

And Leipold seems to be the hybrid. He wants to win insofar as the team remains cash-flow positive. In other words, his top priority is making a profit, and he wants to win as much as he can within that scope, he's not willing to go cash-flow negative for a couple years to do a proper rebuild.

Further, he wants to be a differentiator, but that part is constantly at odds with him always looking to remain cash-flow positive.

A lot of owners across sports will move between being a "cost-leader" and a "differentiator", that's where it becomes cyclical. Chicago is a great example of this in recent history.

• From the early 90s to the late 00s they were pretty bad for a long time, obviously not all intentional. They weren't a premier franchise, they weren't selling out games, costs were cheap.
• After they got pieces like Kane, Toews and Keith, the on ice product vaulted to the top, as did the fan support, costs were up, revenue was way up, they were the gold standard for 8 years or so.
• Then they started another rebuild. Costs are way down, revenue is down a bit from where it was.
• Now they have Bedard and another top pick in 2024, and in time will figure to be close to where they were from 2008-2016.

That's the way a lot of teams will operate, or at least try to operate, over a long period of time. When your window is over you cut costs, stockpile talent, build for a future period where you go all out, spend to the cap, and can raise prices because your team is good. Those teams may not always be cash-flow positive in the down years, but in the high years they're making enough to offset it.

Leipold, on the other hand, chooses to remain cash-flow positive above all else, which means always going for the wins because a playoff team will almost always be cash-flow positive, even if it's clearly first round fodder.

Nice post. I actually think almost all owners are the hybrid type. I disagree on what makes Liepold a poor owner, though. I think his fandom is actually what has hurt the Wild. He's tried keeping them competitive, even when the smart business idea would be to let them be bad for a handful of years, cut costs, and then reap the profits later. I think he's basically a normal guy who loves sports, but he just happens to have too much money.

Of course, I can't prove one way or another why he keeps the Wild a bubble team, that's just my own conjecture. I wish that NHL teams had to publish financial statements. I think a lot could be learned by looking at those.

 

[AKL]

Nice post. I actually think almost all owners are the hybrid type. I disagree on what makes Liepold a poor owner, though. I think his fandom is actually what has hurt the Wild. He's tried keeping them competitive, even when the smart business idea would be to let them be bad for a handful of years, cut costs, and then reap the profits later. I think he's basically a normal guy who loves sports, but he just happens to have too much money.

Of course, I can't prove one way or another why he keeps the Wild a bubble team, that's just my own conjecture. I wish that NHL teams had to publish financial statements. I think a lot could be learned by looking at those.

I could see this angle too.

1) His love for winning means he doesn't ever want to lose, even if it's for the best, therefore he won't allow the team to become a bottom feeder, therefore we can never get those high picks and elite talents, therefore we have a more uphill battle to win the Cup

or

2) He doesn't ever want to lose money, therefore he won't allow the team to become a bottom feeder, therefore we can never get those high picks and elite talents, therefore we have a more uphill battle to win the Cup

My thought process:

• If I were an owner with billions of dollars...
• Winning the championship is the only winning that truly matters (the ultimate goal, the purpose of having a team)...
• The method that gives you the best chance of building that team is picking at the top of the draft a few times...
• Therefore if I want to achieve my ultimate goal, the reason I own the team, I should pick at the top of the draft when it's appropriate...
• Therefore I should be okay with losing money for some of those years...
• Therefore money isn't as much a driving factor as always winning is...

Given that logic, it tracks that I would assume he cares about profit more than winning.

But maybe Leipold has a different mentality around it, and he just wants to see his team have the best chance of winning any given night he goes, even if that means it'll be harder to win a championship. It's not necessarily about the money, it's about winning as many games over a 10-20 year span as the team can, even if none of those games are Cup Finals games. You might call it more of a casual fandom, I don't know if that's the right word though. He still wants the team to win, he just doesn't put as much emphasis on the Cup as I do.

You're right, we may never know.

 

[Wonderful Tacos]

Im at work but if you google minnesota wild operating income the first hit should be a link to site called statista that will breifly show yo a graphic of wild's operating income for the last decade or so. Irritatingly i wasnt able to copy the graphic or link before the site determined that my trial viewing of statista had expired.

Anyway it shows Leipold hasnt been making shit at least wrt annual profit.

The numbers the esteemed janitor quoted do seem reflective of recent year but theyre wildly out of step with history and prob bc of covid escrow being repaid by players and perhaps inflation generally or maybe a windfall like new tv rights. (Also the wild are artificially spending less on player salaries bc of dead cap hits)

 

[Wonderful Tacos]

When i commented this am i had seen a decade old article about how only a few teams were profitable (you can guess which) and had a chart that showed most losing a few MM but basically neutral.

But in general my thoughts are:

1.) If its such a lucrative business why isnt there more competition to buy. Andlauer was the only guy to come forward as a sole party for sens.

2.) Craig has never had a prob spending to cap. Why do that if the motivation is mostly about jumping a few slots in the forbes net worth rankings

 

[Obvious Fabertism]

The NHL does ok as an investment, but completely pales in comparison to the kind of margins needed for someone to first become a billionaire. Each of these owners has made XXX multiples on their earlier investments and have access to extremely lucrative opportunities. Realistically I would consider these pet projects and a slight diversification of their portfolios.

Not to say that returns aren’t a strong motivator, these are billionaires, you only get to that point with a strong personal emphasis on making money above all else.

 

[AKL]

Sure would like to see Beckman at some point, cool to have Shaw back though, probably an upgrade on the L_i boys

 

[Wabit]

Sure would like to see Beckman at some point, cool to have Shaw back though, probably an upgrade on the L_i boys

The L+i boys are an upgrade to Freddy G and MarJo currently.

 

[AKL]

The L+i boys are an upgrade to Freddy G and MarJo currently.

They're all firm 0's in my book, Johansson might be more noticeable because he's playing on the second line where you expect more.

 

[Obvious Fabertism]

Love that Shaw is back, love that Roman is going to be drunk off his ass from hearing “Identity” more for the rest of the season lol. You know it’s going to be a motivator.

 

[Roman Maroni]

Love that Shaw is back, love that Roman is going to be drunk off his ass from hearing “Identity” more for the rest of the season lol. You know it’s going to be a motivator.

Walz is already brushing up on "Shawzy"....Can't come across as rusty!
As long as he gives up on "Johnny" Merril it might be tolerable....

 

[Wabit]

Walz is already brushing up on "Shawzy"....Can't come across as rusty!
As long as he gives up on "Johnny" Merril it might be tolerable....

You must either be lowering your standards or working up an immunity towards Walz. Nothing about him talking in the booth is tolerable.

 

[Roman Maroni]

You must either be lowering your standards or working up an immunity towards Walz. Nothing about him talking in the booth is tolerable.

Maybe I should’ve put MIGHT in capital letters. As in could possibly be tolerable, but more than likely not…..

 

[Roman Maroni]

I had to start a separate thread so we can keep track of all the drinkable offenses during a game…let ‘em rip!

 

[BagHead]

Im at work but if you google minnesota wild operating income the first hit should be a link to site called statista that will breifly show yo a graphic of wild's operating income for the last decade or so. Irritatingly i wasnt able to copy the graphic or link before the site determined that my trial viewing of statista had expired.

Anyway it shows Leipold hasnt been making shit at least wrt annual profit.

The numbers the esteemed janitor quoted do seem reflective of recent year but theyre wildly out of step with history and prob bc of covid escrow being repaid by players and perhaps inflation generally or maybe a windfall like new tv rights. (Also the wild are artificially spending less on player salaries bc of dead cap hits)

I've got your back:

I've viewed a lot of businesses income charts in recent years, and almost all of them have a huge dip, usually into (or near) the negative, for the year 2020,, so seeing this for the Wild is expected (2021, too, since they were still doing the covid thing in the NHL). Especially when you consider that they're live entertainment which relies partially on ticket sales. If you showed me this without telling me which business it was, I probably would have assumed it was a small tech company at first glance. Usually those have some up years and some down years early on, and then rocket upwards once they figure out how to make money consistently. Since 2015 they've grown operating income at 50% per year, which is a pretty insane rate. I don't know what has caused their two most recent years to be so good, but you might be right about escrow. I just don't know enough about it to say anything.

Anyway, I don't think sports franchises are great cash machines, where you're going to be able to pull money out of them as an owner and live off it, but they are great at appreciating in value. If you're rich enough to own one and then sell it 30-40 years later, you'll probably make a great return.

*edit*
Just to make it clear, here's the Net Income (it's not operating income, but they're closely related) of Texas Roadhouse, who had to close doors for a large part of 2020. I don't hold covid against any company, because even fantastic ones suffered.

WTF? Why won't these images work... How did I fix this last time?

 

[Spurgeon]

Sure would like to see Beckman at some point, cool to have Shaw back though, probably an upgrade on the L_i boys

I haven’t watched all of his games, but Lettieri hasn’t looked horrible in some of the more recent games. Looks noticeably fast and aggressive on the forecheck. Like a poor man’s version of a Zucker-Parise combo

 

[Webster]

Russo said that Foligno is out for "a few weeks". Is Moose cooked? He's had a lot of health issues this season. $4 million a yr til 2028...oops

And take this for what it's worth, but several tweets that the Wild, Sabres and Ducks are in talks with the Rangers about Kaapo Kakko. It was apparently reported by a NYR beat writer. Is Zuccarello leaving?