Sunbelt teams aren't the only teams struggling

[fulcrum]

How is St. Louis struggling, I would have guessed they were a successful team.

http://www.sportsnet.ca/hockey/nhl-l...b_contraction/

[Bnhershy]

since the 04 lockout, they haven't seen much on-ice success until last season. now their future in terms of on-ice success looks bright with the abundance of young guns on the roster and coming up the pipeline, but it doesn't surprise me that they haven't made money.

i'd expect something similar to what we've seen in Nashville when it comes to ticket sales if the Blues can go deep in the playoffs.

1 great season isn't enough to turn around a US NHL franchise financially.

[ericdaoust]

To me the biggest one is no cup. They had a long streak of playoff appearances and nothing to show for it.

[Pengwin7]

Yeah, it's weird that St.Louis is valued lower than Phoenix (Forbes rank)... but there are a lot of intangibles that us fantasy hockey fans can't really dive into.

1. Arena
Some owners actually own their arena too. I think the Leafs group also owns the ACC. That's huge value. It's basically similar to owning your home vs. renting. And for anybody that tracks their own expenses, home mortgage/rental is most people's #1 expense.
For all we know, the Blues have an expensive lease/rental to the city of St.Louis (who owns the Scottrade center).

2. Non-player expenses. Teams also have to pay their executives and staff. You can probably bet that the NHL-run Coyotes have a more stripped-down bargain-team-staff than St.Louis does. The St.Louis team is actually owned by a Holdings Company - what kind of salaries does this team allocate to its executives?


St.Louis gate receipts come out to $31million. (This is actually BETTER than about 8 or 9 teams, NYI, TB, FLA, PHX, NAS, CBJ, ANA, etc.)
Their revenue was $89million (with a operating income of -$10m).

So they're spending $99m, of which $59m is for players.
Where does the other $40m go?

Essentially... a businessman would probably tell you that something about their internal business model isn't efficient. I don't know what those things are... but obviously this is hurting their actual franchise (monetary) valuation.

[Jason_Banks]

I gotta echo this Eric...

The Leafs make a shitload of pictures, jackets and many other think that feature listing of all thier cups... even tho they havent won one in years...

I see a fair bit of Tampa items with the cup and many others...

For teams that havent won one, it is a lost revenue stream... Its not an overly valueable one, but it does help...

but more to what Eric is going towards is Fan interest, if you see your team win a cup, you are drawn back to the team and supporting... St Louis has had strong teams, but a cup would change things...

Also apperently 1 home playoff game is supposidly worth 1.5 million + to a franchises revenue... Nashville is likely mostly helped by that as they have started to play a fair amount of playoff games...

each round = 3-6 million in revenue throretically + a bump in fan interst for the following season...

If most $$$ losing franchises see the playoffs regularly and go 2 rounds, their books should go back into the black rather quickly...

[Jason_Banks]

Originally Posted by Pengwin7

Yeah, it's weird that St.Louis is valued lower than Phoenix (Forbes rank)... but there are a lot of intangibles that us fantasy hockey fans can't really dive into.

1. Arena
Some owners actually own their arena too. I think the Leafs group also owns the ACC. That's huge value. It's basically similar to owning your home vs. renting. And for anybody that tracks their own expenses, home mortgage/rental is most people's #1 expense.
For all we know, the Blues have an expensive lease/rental to the city of St.Louis (who owns the Scottrade center).

2. Non-player expenses. Teams also have to pay their executives and staff. You can probably bet that the NHL-run Coyotes have a more stripped-down bargain-team-staff than St.Louis does. The St.Louis team is actually owned by a Holdings Company - what kind of salaries does this team allocate to its executives?


St.Louis gate receipts come out to $31million. (This is actually BETTER than about 8 or 9 teams, NYI, TB, FLA, PHX, NAS, CBJ, ANA, etc.)
Their revenue was $89million (with a operating income of -$10m).

So they're spending $99m, of which $59m is for players.
Where does the other $40m go?

Essentially... a businessman would probably tell you that something about their internal business model isn't efficient. I don't know what those things are... but obviously this is hurting their actual franchise (monetary) valuation.

Excellent post my good man!

I will Hazard to say that half of that 40 million goes to arena/office rentals... probebly they owe banks for services, loans ect...

I really like how you got solid #s to discuss! (Rep!)

[ericdaoust]

I remember James Duthie writing about middle child syndrome a few years back - basically talking about teams that finish just outside of the playoffs but never get better because they miss out on the elite prospects in the draft. I think there is a middle child syndrome for playoff teams that are always out in the first or second round. The team is always seen as above average and not great.

[newfcollins]

Originally Posted by Pengwin7

So they're spending $99m, of which $59m is for players.
Where does the other $40m go?

Planes? Hotels? Food? Staff? Bus rentals to get to games on the road?

Do teams pay for hockey equipment (ie-sticks? Elbow pads? Helmets?)?

It'd probably be pretty easy to spend that money without thinking about it too much.

[fulcrum]

Take the St. Louis Blues as an example. They’re part of the Original 12, with a relatively new downtown arena, a Cup-contending young team, and no local NBA team to compete against.
We have heard it said that the Blues franchise has never turned a profit since joining the NHL in 1967. It is impossible to verify that, but for the record, the Blues are an established NHL brand that Forbes magazine recently valued at just $130 million — dead last in the NHL.

This was the line that really caught my attention. Thats 45 years.

[27Blue]

the blues have a loyal fan base and have not had trouble selling seats. The reason they are struggling is due to greedy past management and some tough breaks with the city. penguin touched on most of these, but this is a summary of the challenges as i see it.

1. they don't own their arena - the city does and tha management company owned by their previous ownership group (apparently) charges well above league average for the team to play there.

2. the city pays a high "amusement tax" that hovers around 5% annually. This tax is levied on certain entertainment events that occur within the city. The Rams and Cardinals are excempt, yet the Blues are still n the hook. This one has been appealled for years now to no avail. it ends up costing the franchise millions anually.

3. The team gets no revenues from parking from the arena because it is owned by the city.

4. The team gets no revenue from game concessions. Even worse was that previous ownership signed a 20 yer deal with a concession contract that came with a front loaded contract. they basically signed of on future earnings for an immediate payday - just before selling the team to new ownership.

5. They had a heavy exec's collecting big $'s. John Davidson was making $2 million dollars a year. When Stillman came in, he changed the model and the fat cats at the top had to go, Davidson included....

there are other teams that don't own their arena or get money from parking + concessions - and while they aren't the big money makers, they aren't as bad off as the blues. the reason for this is that concession deal signed by checketts. if i remember correctly, he received a $10million dollar up front fee to sign the deal. he really put the team at the bottom of the financial hill for an immediate payday before he sold. the other kicker is the 5% tax payed to the city. when looking at a multi-million dollar business, 5% takes its toll. stillman has come in and made some immediate and necessary changes to the business side of the franchise, but he needs help with the new cba to keep thing running in st. louis.