The NHL is in yet another lockout seven years after it lost
a season.
Last time, the owners pretty
much got everything they wanted, and the players got reduced salaries but the
slight majority in HRR, Hockey Related Revenues.
Fast forward to this lockout, and the only
thing the players ‘won’ last time is the sticking point for this lockout, HRR -
if you don’t count the contract length, the 50’s era free agency rules, and the
absence of arbitration.
Fans don’t seem
to get why this lockout is taking so long, there is no easy answer as to
why.
From a players standpoint, imagine
your job, where every 7 years you hear that your employer is having financial
troubles and the only way to fix it is for you, the employee, have to give back
25% of your salary, pay a portion of what’s left into escrow that you may never
see again, then essentially cap what you are able to make for the next 7 years
based on revenue, not margin, then have it taken away because margin is poor. (Holy run-on sentance batman!)
For the owners, well, maybe these metrics
will help you figure it out.
They aren’t
doing well and to be honest
, I don’t know that they ever
will.
In this piece I will divide the NHL teams into four “Eras”
and take a 35,000 foot view how the teams from each era are doing financially
and professionally.
The four eras as
pretty easy to digest: “The original six” then the “Expansion Era” thirdly
“The Merger Era” and finally the Clinton Era, er, I mean “Entitlement Era”
teams for lack of a better term.
I will
look at the teams from each era is: 1)Number of cups the team has overall, 2)
the average annual operating income since the last lockout 3) number of playoff appearances
the last seven years 4) and cups won the last ten seasons.
Teams bolded in black have relocated at least
once since their inception. The purpose is to show through playoff appearances and cups won the last few years how 'competitively relevant' each team is today coupled with how they are doing financially. I consider a team 'competitively relevant' if they have made the playoffs 4 of the last 7 seasons.
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One country deeply loves Hockey, the other country is pretty
much just Facebook friends with it. |
The Original Six
– these teams were the foundation of the NHL from its popularly recoginized
beginning in 1942.
The league went 25
years without expanding, lets take a look at how these storied franchises do
today.
Orignal Six
|
Cups Won
|
Avg Operating income since 06
|
playoff app since 06
|
Cups last 10 yrs
|
Toronto Maple Leafs
|
13
|
$60 million
|
0
|
0
|
Montreal Canadiens
|
23
|
$35.7 million
|
5
|
0
|
Boston Bruins
|
6
|
$3 million
|
5
|
1
|
Chicago Black Hawks
|
4
|
$8 million
|
4
|
1
|
New York Rangers
|
4
|
$30.7 million
|
6
|
0
|
Detroit Red Wings
|
11
|
$15.4 million
|
7
|
2
|
|
|
|
|
|
|
|
Ok, not too many surprises here.
However, it’s worth noting the Bruins have
had two money losing seasons since the last lockout and the Hawks had one – the
year they WON the Stanley Cup.
No other
original six team has had a money losing season since the last lockout.
The Maple Leafs seem to be the only team
without any competitive relevance the last 7 years, and their team is literally
an ATM for ownership.
No co-winkee-dink
that these are also the six teams with the highest net worth.
The Expansion Era
– This started in the 1967 season when the league doubled in size from 6 to 12
teams as the WHL (not WHA) was challenging to compete with the NHL. It also saw a playoff format where a certain
number of expansion teams were guaranteed to make the playoffs. I also lump all the tumultuous 70’s era
expansion in here as well. Teams seemed to move around often, and ownership
groups only went a few seasons before moving to a different city. It was in the 70’s that NHL used expansion to
keep the WHA from taking market share.
Expansion Era
|
Cups Won
|
Avg Operating income since 06
|
playoff app since 06
|
Cups last 10 yrs
|
Los Angeles Kings
|
1
|
$3.2 million
|
3
|
1
|
Philadelphia Flyers
|
2
|
$4 million
|
6
|
0
|
Pittsburgh Penguins
|
3
|
$3.2 million
|
6
|
1
|
Dallas Stars
|
1
|
$8.7 million
|
3
|
0
|
St Louis Blues
|
0
|
(-$4.1 million)
|
2
|
0
|
Vancouver Canucks
|
0
|
$15.5 million
|
5
|
0
|
Buffalo Sabres
|
0
|
(-$4.6 million)
|
4
|
0
|
New Jersey Devils
|
3
|
(-$2.9 million)
|
6
|
1
|
Washington Capitals
|
0
|
(-S3.8 million)
|
5
|
0
|
New York Islanders
|
4
|
(-$7.9 million)
|
1
|
0
|
Calgary Flames
|
1
|
$2.3 million
|
4
|
0
|
About half these teams struggle financially today since the
last lockout.
Almost all of the teams
created to combat the WHA struggle financially to this day – if they still
exist (Capitals, Islanders, Devils, Sabres) .
I’m surprised at how little
operating income the Flyers generate being a traditionally competitive
team.
I am also shocked at the amount of
money Dallas makes in a non-traditional market.
They did lose money for the first time in 2011, which I attribute to
missing the playoffs 3 straight years.
Of the first six expansion teams, 4 of the surviving franchises do ok
with income, if you consider 4 million dollars a year a worthwhile return on a
200 million dollar investment (hello NBA!).
What really sticks out to me though is most of these teams are regularly
competitive making the playoffs, and half the teams haven’t been profitable
since the last lockout.
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| No NHL hockey makes even the most chipper fans sad. |
The Merger Era
– these were the four strongest teams when the WHA ceased operations and were
(eventually) absorbed into the NHL.
Think the owners are babies today,
check this out.
There is a case for fan pressure I
guess.
Occupy Molson.
Merger Era
|
Cups Won
|
Avg Operating income since 06
|
playoff app since 06
|
Cups last 10 yrs
|
Edmonton Oilers
|
5
|
$11.2 million
|
1
|
0
|
Carolina Hurricanes
|
1
|
(-$5.8 million)
|
2
|
1
|
Phoenix Coyotes
|
0
|
(-$15 million)
|
3
|
0
|
Colorado Avalanche
|
2
|
$4.4 million
|
3
|
0
|
Here we see hockey start to struggle in non-traditional
markets – not at the time of expansion, but after their relocation. Hartford and Winnipeg relocated because of arenas,
and Quebec relocated because they were tired of taking in Canadian revenue and
paying salaries at a 20% premium in US dollars.
Edmonton weathered the storm, but only seems to win draft lotteries as
of late, and makes good money now that the USD is devalued. Not much competitive relevance here, no team
with a 50% average of making the playoffs the last 7 seasons. One Stanley Cup win in the last 10 years
between the 4 teams.
The Clinton Era
– Nobody really thought of the consequences of making it easy to get credit and
a mortgage, I mean an NHL franchise. Only
being able to get an NHL franchise in a market where hockey is typically played was
discriminatory! Need 20% down before you
can get a mortgage, discriminatory!
Early in this era we see surviving WHA franchises relocate. In the
latter half of the era, hotbeds for hockey like Nashville and Miami get
expansion teams. Remember when Starbucks
had a store on every corner? Not so much
anymore…
Clinton Era
|
Cups Won
|
Avg Operating income since 06
|
playoff app since 06
|
Cups last 10 yrs
|
San Jose Sharks
|
0
|
(-$3.3 million)
|
7
|
0
|
Tampa Bay Lightning
|
1
|
(-$1.9 million)
|
3
|
1
|
Ottawa Senators
|
0
|
$2.4 million
|
5
|
0
|
Anaheim Ducks
|
1
|
(-$0.25 million)
|
5
|
1
|
Florida Panthers
|
0
|
(-$8.1 million)
|
1
|
0
|
Nashville Predators
|
0
|
(-$5.0 million)
|
6
|
0
|
Atlanta Thrashers
|
0
|
See Winnipeg Jets
|
1
|
0
|
Winnipeg Jets
|
0
|
(-$5.5 million)
|
0
|
0
|
Minnesota Wild
|
0
|
(-$0.5 million)
|
2
|
0
|
Columbus Blue Jackets
|
0
|
(-$7.9 million)
|
1
|
0
|
No rocket surgery required to make conclusions here.
However, I am seeing a trend which I will
discuss in the conclusion section below.
Two Stanley Cups have come from this group of teams, yet only 4 of these
9 teams have been competitively relevant the last 7 years.
Oh, only one team has made a profit since the
last lockout and it's in Canada.
I bet this group of owners like
things just the way they are and are in no way motivated to see a profitible return on
their 100 million dollar investments.
Conclusions: Looking over these metrics two things stick
out to me, one of which I wasn’t expecting.
The surprise to me was winning doesn’t fix everything.
Toronto and San Jose are polar opposites in
the realm of competitive relevance the last 7 years and Toronto rakes in piles
of money; San Jose bathes in red ink.
New Jersey regularly competes for Stanley Cups and can’t make
money.
Anaheim makes the playoffs, wins
a cup, and can’t make a steady profit.
While
Nashville seems to make the playoffs playing 'small ball' it can't make money. It leaves those of us in Columbus with the depressing thought, "What if winning doesn't solve everything?"
The second thing that sticks out to me, and is really no
surprise, is that NHL teams in cities like Miami, San Jose, Nashville, Phoenix,
Northern California, Tampa Bay, Raleigh, NC; and Columbus, OH struggle to make
money. I don’t understand from a dollars
and cents standpoint how these cities got a HOCKEY franchise (I’m am very happy
that Columbus did though). I guess
expanding into these markets sounded like a good idea, so did opening a Rax
franchise at one point in the 80’s.
15 teams have made a profit since the last lockout, 15 teams
haven’t. There has been no expansion
since the last lockout and one team relocation. There is no easy answer as to what it will
take to end this lockout, but I’m fairly certain this won’t be the lockout to
end all lockouts. The players are tired
of having to always give back to the owners.
The owners locked out the players, the players want an opportunity to get their lost money back - considering this will be the most money they will likely ever make. The owners, well, the owners aren’t all on the same page. Anyone who tells you they are all on the same
page has the power to fine them $1 million bucks for saying otherwise. It's kind of sad that one half of your league loses money playing hockey, the other half loses money by not playing hockey.
While it sounds like I blame expansion, you have to expand in order to grow your
business - that is for certain. However,
there has to be tangible demand and real underlying economic factors driving that
growth and expansion. Sadly, I don’t see either of
those since the Clinton Era NHL expansion– and these metrics support that
conclusion. I for one wish this would get settled once and for all. Writing about NHL lockouts is not very fun.
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| Speaking of Metrics, I have a huge crush on Emily Haines. |
