Forbes just released their annual business report on the NHL team values and other financial metrics such as revenue, ticket prices to name a few. There is a lot of data in there that can sometimes be overwhelming to even the financial savvy individuals. Now all this data is based on Forbes data and it isn’t like NHL owners are opening up their books for them so a lot of this should be taken at face value.
This entry is not about Seattle specific but it is good to understand growth and comparisons of like Cities to Seattle to understand the opportunity. Please send feedback on this post if you like it. I can spend weeks looking at this data and probably many more months pull other sets of data.
To set some assumptions in my commentary, let me define my segmentation:
11 US Traditional (hockey) teams: BOS, BUF, CHI, DET, MIN, NJD, NYI, NYR, PHI, PIT, WAS
5 teams in the South segment: CAR, DAL, FLA, NAS, TBL
7 teams are in the Non-traditional US group: ANA, COL, COL, LAK, PHO, SJS, STL
7 teams make up the Canadian segment: CLG, EDM, MON, OTT, TOR, WIN
Because Atlanta moved to Winnipeg, I will occasionally reference taking them out of the equation to understand the impact of the move north and to see how the rest of the Canadian teams performed.
I can literally spend hours and hours looking at this data and a blog entry could be bigger than an economic analysis of the Mortgage crises of 2008. So I’ve decided to split things up a bit per Blog entry.
On Average, Revenue was up 10 Million per team but you really need to peak under the covers to know what that really means.
Canadian teams saw an average revenue increase of 10Million across their 7 teams but when you take Winnipeg out (34 Million increase from Atlanta); revenue only increased #7.2 Million. Vancouver was the only team in Canada to see a reduction in revenue year over year which can probably be explained by their great playoff run in 2011 and their very shortened run in 2012.
The Traditional US, Revenue grew by 10 Million year over year. Boston and Detroit were relatively flat while the Rangers and Devils had increases of 30M and 22M respectively. The Devils increase is more than likely due to making the playoffs and then once making the playoffs, going all the way to the Finals. In spite of missing the playoffs, Buffalo saw an increase of 8 Million in Revenue.
All Non-traditional teams saw an increase in Revenue year over year by at least 5 Million. St. Louis saw 11 Million increase with their amazing season. Even the Coyotes saw a 13 Million increase.
The Southern teams all saw Revenue increases but Tampa Bay only saw a modest 1 Million dollar increase. In spite of a playoff drought going back to 2008, the Dallas Stars increase Revenue by 10 Million. A healthy sign for a franchise that once had rabid fans.
Playoff teams in 2012 saw increase revenue of 10.5 Million while non-Playoff teams saw increase of 8.2M (only 6.2M if you remove Winnipeg). There were 4 teams that made the playoffs in 2012 but did not qualify in 2011. Those teams saw an increase of 13M in revenue.
It’s not always about growth and increases because when you look at a team like the Leafs, they sell out every game and haven’t added any games (as in qualifying for the playoffs). Let’s look at the revenue numbers:
*The data excludes Winnipeg
As you can see, Canada has the highest revenue per team but it actually has the smallest growth at 5% with Non-traditional US having 11% increase. This is great to see being that I would classify Seattle as a non-traditional market.
Now I am going to tease you with something here. Good businesses have a diverse portfolio so that if one product line takes a hit, the health of the company is still in tact. I’ve heard over and over again that the NHL is extremely dependent on Gate/Ticket revenue compared to the NBA so I was a little thrown back about the Gate revenue splits by segments.
This strikes me as a little alarming for the Canadian teams. Yes, they draw extremely well which is why several people want more teams in Canada. I for one can imagine a team in Quebec but it should be noted that teams will live and die on gate revenue in Canada. There is some economic theory that there is a ticket bubble coming because the price increases cannot sustain themselves. I will do some research on the theories and post later. One really positive thing is that according to Forbes, the NHL is becoming less and less dependent on gate revenue as the growth in gate revenue isn’t growing at the same rate of the all up growth.