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Report: NHL has lost $240 million the past two seasons

Sep 4, 2012, 5:05 PM EDT

Gary Bettman Getty Images

Despite posting record revenues, the NHL has lost approximately $240 million over the last two seasons, a league source tells RDS’s Renaud Lavoie.

In a related story, the timing of this leak is about as accidental as Milan Lucic bowling over Ryan Miller.

The NHL has faced a considerable, if not impossible, PR challenge during the latest CBA negotiations. How, many have wondered, can the owners be demanding concessions from the players following a season that saw the league crowing that business has never been better?

The NHL painted a much bleaker picture ahead of the 2004-05 lockout, going so far as to commission a report from former SEC chairman Arthur Levitt that showed a $273 million loss during the 2002-03 season.

The NBA painted a similarly bleak picture prior to last season’s lockout, claiming the league was losing upwards of $300 million per season.

Of course, now that the NHL has played the “we’re losing money” card, it’s also opened itself up to the “maybe if you didn’t have a team in Phoenix” rebuttal.

After all, not all business losses can be chalked up to paying the employees too much.

  1. windmiller4 - Sep 4, 2012 at 5:11 PM

    These idiots that run the league have no idea how to manage their money… I could do a way better job. Split revenue 50/50, limit contract lengths, and move phoenix to a place that can support it. Hey i think i just saved the nhl $240 mil…

    • ravenscaps48 - Sep 4, 2012 at 5:32 PM

      Who would’ve ever thought the people in Tampa, FL. – Sunrise, FL. – Phoenix, AZ. – and Columbus, OH. could support an NHL Franchise and make the league money?

      • tbbolts91 - Sep 4, 2012 at 11:04 PM

        You’re so ignorant. You obviously don’t know much about hockey teams in general. Tampa has a huge and supportive following. You can look at the NHL attendance ratings and see how misinformed you are. . .

      • lostpuppysyndrome - Sep 5, 2012 at 12:04 AM

        Columbus is more of a victim of incredibly poor management and on-ice success. They do like their hockey there. And apparently folks do show up at games in Tampa. They just have to leave after the 1st period for bedtime, the stands sell Metamucil and oatmeal instead of a brat and beer, and fighting is banned because it boils up the fans’ blood.

      • aesophy - Sep 5, 2012 at 12:09 AM

        Tampa actually does pretty good for attendance, pretty loyal fan base because a lot of people in Tampa are from up north anyway… Though I don’t know about any of the other teams you listed…

    • tealwithit - Sep 4, 2012 at 5:37 PM

      That’s exactly what they’re trying to do (except for the Phoenix part).

    • polegojim - Sep 5, 2012 at 8:26 AM

      @windmiller…. and you think NOT getting that done is the OWNERS fault?

  2. upyourstodd - Sep 4, 2012 at 5:11 PM

    I wonder how many owners nephews are getting paid 6 figures for nothing jobs…..The players make the league money, the owners lose it with poor business decisions. Maybe little nephew Johnny doesn’t need to be the assistant director of assistants.

    • freneticgarfieldfan - Sep 4, 2012 at 5:18 PM

      don’t forget: many of the “poor business decisions” you mentioned go directly to the player’s pockets…

      • upyourstodd - Sep 4, 2012 at 5:25 PM

        And now their poor business decisions are going to be supplemented by the players pockets. Taking from the hand that ultimately feeds you is a risky game to play. The players need to make some concessions but the owners cant shoot for the moon.

      • polegojim - Sep 5, 2012 at 8:30 AM

        Precisely frenetic… that’s the point many don’t get… and the PLAYERS are saying it’s NOT ENOUGH.

    • tealwithit - Sep 4, 2012 at 5:40 PM

      That’s not happening. There are very few team executives that get paid 6 figures, and it’s incredibly difficult to get one of those jobs. Most of them have MBAs, or decades of experience in sports business.

      • bizzmoneyb - Sep 6, 2012 at 4:16 AM

        this isn’t really true. I worked for an NHL team for 4 years. it was one of the worst in the league and all the VPs made close to $150k plus a free luxury car. Then laid off a good chunk of the organization, including
        myself.

      • tealwithit - Sep 6, 2012 at 10:46 AM

        I’m looking at going into sports business and the level of competition for those jobs has been explained to me over and over, so I guess “very few” means something different to me. I will say, though, that the people in those high-paying jobs work incredibly hard and have long hours – and then often bring their work home with them. (I grew up with one of them.) And these days, it’s pretty standard for them to have MBAs and extensive experience.
        Just out of curiosity, were the VPs that you mentioned at least qualified for their jobs?

  3. thomaspratt - Sep 4, 2012 at 5:13 PM

    And how much did the owners make using the paper losses reported for their NHL teams to offset taxes on their other businesses?

    • ravenscaps48 - Sep 4, 2012 at 5:25 PM

      DAMN RIGHT!

    • kitshky - Sep 4, 2012 at 6:44 PM

      @thomaspratt … Seriously.

      It absolutely does my head in that people simply accept the reported losses from the Owners (second, third, fourth, fifth…) businesses at their face value.

      If I can make the CRA think I made $14K last year… NHL owners can make a company with as many moving parts as an NHL franchise “lose money”.

  4. ravenscaps48 - Sep 4, 2012 at 5:17 PM

    I find this very hard to believe… The Bettman is trying to make himself look like the victim, when everybody and their sister knows that he is the ENEMY! I hate this guy for ruining the sport that I love so very much!

    • colby010 - Sep 5, 2012 at 2:58 PM

      bettman is an ass!!!!!!!!!! Always has and always will be!!!!!!!

    • tealwithit - Sep 6, 2012 at 1:59 AM

      One little guy ruined the sport you love?

  5. atwatercrushesokoye - Sep 4, 2012 at 5:25 PM

    And $48 million of that $250 million loss is directly tied to Bettman’s little pet project in Glendale, I guess when he guaranteed the owners that they wouldn’t lose money on that he was incorrect.

    • atwatercrushesokoye - Sep 4, 2012 at 5:26 PM

      Check that $240 million

      • lostpuppysyndrome - Sep 5, 2012 at 12:06 AM

        Actually, that $240 mil is spread over 2 seasons, so you’re looking at around $90-100 mil just for Phoenix alone. Idiots.

  6. sharksfanatic - Sep 4, 2012 at 5:28 PM

    You know this is going to end up with a 50/50 split, contract lengths of no more than 6 years and some form of revenue share. Just get it done!

    • polegojim - Sep 5, 2012 at 8:28 AM

      Exactly… but ‘just getting it done’ is as much a player issue as an owner issue.

  7. hockeyfan28 - Sep 4, 2012 at 5:32 PM

    Probably a made up number to cry poverty but realistically teams like jersey and columbus shouldn’t be in the league most people in jersey are either rangers or flyers fans heck their governor is a rangers fan and columbus with pitt just to the east and detroit to the north most fans in columbus don’t even stick for their own team contract the league by a few teams money problems solved or even better move those teams to cities that want it see Seattle, Portland, or even moving Columbus to Cleveland

    • tealwithit - Sep 4, 2012 at 6:14 PM

      The problem is finding cities that already have a hockey fan base and an arena that can house an NHL team. Getting an arena built can be extremely difficult and takes years. The alternative is cutting those teams altogether, but that means players lose their jobs
      .

      • manchestermiracle - Sep 5, 2012 at 12:43 AM

        Any business losing money lays off workers in order to survive. The NHL, in the end, is just another business. I’d rather see some lower talent go to lower leagues than have all the best players sitting at home.

      • boisehockeyref - Sep 6, 2012 at 1:03 PM

        Well, Portland already has a hockey fan base, and an arena that can seat around 19,000 for hockey. Heck, the Portland Winterhawks, a WHL team comprised of 16-20 year olds, holds the record for attendance in the league when they put over 19,000 in the Rose Garden… The NHL WOULD work there, because really all they have, for the most part, is the Trail Blazers of the NBA, and the Timbers of MLS, who, though not a great team, has probably the best support fan wise in the MLS. And with the recent turnaround of the Winterhawks, they too are a farily hot product as well. Would love to see an NHL franchise move to the Rose City!

  8. theawesomersfranchise - Sep 4, 2012 at 5:32 PM

    Maybe the NHL should fire Gary and hire a pal of Roger Goodell. Obviously Stern’s lackeys are not cutting it.

  9. jimw81 - Sep 4, 2012 at 6:00 PM

    goes back to the argument that Bettman fighting to keep Coyotes in PHX while losing $, he decides to blame the player’s salaries for league $ issues. they should of bailed on phx years ago.

  10. lvshark22 - Sep 4, 2012 at 6:18 PM

    And now with a lockout, the owners who actually have franchises that produce revenue will not make anything. Like someone else said, How do you expect teams like Phoenix to make money? They have a bad fan base who only showed up once they made the playoffs.

    • tealwithit - Sep 4, 2012 at 6:26 PM

      Only a third of the teams are making a profit, though. Phoenix is probably the most glaring example right now, for obvious reasons, but it’s a league-wide problem.

  11. dbarnes79 - Sep 4, 2012 at 6:26 PM

    Here is how you make more money. Put teams in real hockey markets. Southern Ontario could easily support a second team and Quebec City is breaking ground on a new arena. Also, I’m sure there are some nice options in the northern US. You know where they actually like hockey.

    • theawesomersfranchise - Sep 4, 2012 at 7:14 PM

      Goodbye Panthers hello QC
      Goodbye Yotes hello Seattle
      Hamilton on deck for expansion

      • lostpuppysyndrome - Sep 11, 2012 at 1:10 PM

        Hamilton, another T.O. team, West Virginia… I think they all look better than Florida and Phoenix. Should be interesting to see what happens in the next 5 years or so, all other things being equal.

  12. travishenryskid - Sep 4, 2012 at 6:54 PM

    They should really just get rid of the salary cap and floor, and run a relegation/promotion program like European soccer. That way, the cap strapped teams will still attempt to stay competitive but can do it within their budget and the big teams can spend whatever they want, allowing players to get the chunk of the pie they deserve without having to worry about the big teams going bankrupt.

    • woodsvikes - Sep 5, 2012 at 4:39 PM

      Yeah, since that works SO WELL in MLB too. Small market teams have no chance except for the once in a decade run, while the big market teams stack themselves over and over and over again. Thats a terrible idea!

  13. acovey10 - Sep 4, 2012 at 7:07 PM

    I would hate to work for the NHL (League owned teams)

  14. dumptrucked - Sep 4, 2012 at 7:27 PM

    #contracttheobvious, #poachthepanthers, #strikethelightning, #sinktheislanders, #icephoenixnow

    • tealwithit - Sep 4, 2012 at 9:09 PM

      #pissoffawholelotofplayers

  15. finfan88shark - Sep 4, 2012 at 8:01 PM

    Sure they did! And my accountant says I lost money too.

  16. stakex - Sep 4, 2012 at 9:23 PM

    There are two reason that the league loses money:

    1. Hockey simply isn’t that big in the US, and thats where most NHL teams are. Canadian markets can make money no matter how good their team is… as proven by the Leafs. Doesn’t work like that in the US.

    2. On a similar note, the NHL has far too many teams in poor markets and little desire to move them. Phenoix is a great example. They have a hard time giving tickets away, yet the league is doing everything it can to keep them there. Why? Just sell the team to someone who wants to move them out of that horrible hockey market, and into a market where they might actually make money.

    ——————————————————–

    Thats really all there is to it. Its not that the owners are paying the players too much… its that there are teams in horrible areas that will never make money. Move them elsewhere, probably to Canada, and everything would be better.

    Another thing to note: Does this loss of $240 million also include money made from jersey/food/drink sales? Thats probably where a lot of teams make the most money, so I wonder if thats included in all this, or if this just factors in ticket sales – player cost.

    • somekat - Sep 5, 2012 at 9:48 AM

      1, wrong. Sure the Leafs make a ton of money. Just like the Knicks do. They never win, but make a ton. It has nothing to do with Canada. If it does, explain Edmonton. Why did they take the team from Quebec? The Leafs and Canadians are religions, the rest are in the same spot as the rest of the league.
      2, moving is only half the answer. There aren’t enough solid markets with a real interest to keep all of these teams. 2 should be moved, 2 should be contracted. Seattle and Quebec could support a team, send Florida to 1, Islanders to the other. Get rid of Pheonix, get rid of Columbus or Nashville.

      Problem solved.

      Unfortunately, the union being a scumbag union like every scumbag union, is more worried about getting as many jobs at as high a pay (deserved or otherwise) with not thought to the sustainability for the company, and will NEVER agree to losing that many NHL roster spots

      • stakex - Sep 5, 2012 at 12:08 PM

        1. You clearly have no idea what your talking about. Not only are the Oilers the 15th most valuable team in the NHL (not at all bad for a team thats been at or near last a lot in the last 10 years), but they actually made a profit last season. Check your facts before opening you’re mouth.

        Besides, you actually help prove my point: Canadian teams are loved, and can make money no matter what. Even if thats not completely true of all Canadian teams, its still something that would NEVER happen in the US.

        And its a FACT that hockey simply is not as popular in the US as it is in Canada… if you argue that, well then I might as well be talking to a brick wall.

        2. Not ALL teams have to be profitable. You just can’t have any that are losing a ton of money… and right now the two teams that are really putting a hole in NHL profits are Phoenix, and Columbus. If those two teams were moved to new markets (preferably into places where hockey actually exists) things would be better over night without even thinking about a contraction.

        You’re distain for Unions makes me laugh and shows how little you know about American labor and its history, but it also shows how little you know about the facts. Not only is the Union against it, but so are the owners and the fans. Its not going to happen, and its not because of the players Union.

  17. butlers91 - Sep 4, 2012 at 9:49 PM

    http://www.forbes.com/sites/mikeozanian/2011/11/30/the-business-of-hockey/

    The Business Of Hockey: Team Values Hit All-Time High

    • irishjackmp - Sep 5, 2012 at 1:35 AM

      The team values in that article are completely irrelevant. The losses/profits however are VERY relevant.

      If you looked at the article you would see that half the teams in the league are either losing money or breaking even. This cant continue as a business model. Yes, it’s the owners own fault for being stupid enough to give the players such a high percentage in the first place that they are in this predicament (57%) but they do have to address it.

      As for “values being at an all time high”, no, they aren’t. Basically, those values are nothing but a dart at a dartboard guess by the author. An asset is worth what someone i willing to pay for it. And if no one is coming forward offering to buy teams at those valuations then they aren’t worth it.

      • hockeydon10 - Sep 5, 2012 at 9:19 AM

        A couple things @irishjackmp:

        1) That article does not just deal with team values. I’d like to think one would actually look at the article, and not just the first column, and see that, but you’ve proven once again that people on the internet simply don’t work that way.

        2) If you add up all the profits and all the losses according to the Forbes site — you know, beyond the first column — Gary Bettman is a liar. The profits offset the losses by a significant margin. $127.4M in the positive to be exact. For one year.

        3) Anyone can cook the books. Owners use their sports teams as a write off to avoid taxes on their other businesses. Hell, I write off as much as I can to make it look like I earned less. Also, HRR doesn’t include everything a club brings in related to hockey operations. It only includes the items defined in the soon to expire agreement. This is just Gary trying to be clever with words.

        4) “The NHL” is not the same entity as “The Maple Leafs”, “The Red Wings” or “The Islanders”. It’s really hard to look at the Forbes list and believe Bettman means all teams totaled together when the numbers quite clearly point to the opposite.

      • somekat - Sep 5, 2012 at 10:01 AM

        @hockeydon

        Did YOU read the article, or just skim the parts you liked? Apparently, that is how you work on the internet. The number you posted, it specificallys says “earnings before interest, taxes, depreciation and amortization”. 18 teams lost money before even looking at that stuff. Most of the teams in the league (especially the ones not making money), have loans that are paid off each year. Think about your check, how does it look before taxes, compared to after? Obviously they have loopholes and lawyers to keep that at a minimum, but it’s not free, it’s in the 10’s of millions for EVERY team.

        Assuming teams are only paying 10M a year in taxes (which is ridiculous in most markets, they will be paying much more with payroll, and insurances, and corporate, and income, etc etc), they league, but th number you posted, would be over 150M in the red. This isn’t touching loans deprciation, or loan payments.

        Your logic is only half as flawed as your argument.

      • irishjackmp - Sep 5, 2012 at 7:24 PM

        Hockeydon,

        Yes, I read the article as you snidely asked, I subscribe to the magazine and have read it in great detail a few times.

        To refute your points…

        1) To add up all of the total losses and all of the total profits of the respective teams ans come up with a net positive of $127m an look at it as the NHL “made money” is absurd. If a majority to McDonald’s franchises are losing money but a small minority are highly profitable do you honestly think the McDonalds corporation looks at it as a substainable business practice? Don’t you think their individual franchise owners who are losing money would be in open revolt if the corporation didn’t move to address it???

        2) As for the league “cooking the books”, what is it about basic math that you don’t grasp? The NBA has a huge television deal while the NHL pales in comparison with their TV package (even when you factor in the juicy local TV deals teams like Toronto get). Yet, even though the NBA has an annual TV deal pays them $30million a year per team while the NHL gets paid about $6million per year, the NHL salary cap is $6 million a year higher than the NBA. Do you honestly think these NHL teams getting $25million a year less in national television revenue while paying out as much or more in salaries are profitable?

      • tealwithit - Sep 6, 2012 at 2:06 AM

        Also probably worth noting that those Forbes numbers aren’t completely accurate. They can be anywhere from $1-20 million off the mark.

  18. 1943mrmojorisin1971 - Sep 5, 2012 at 3:40 AM

    Oh, did they now? Alienating fans and losing an entire season is a sure-fire remedy.

  19. ram11273 - Sep 5, 2012 at 4:22 AM

    The fans are paying to see the players and yes we realize that each season prices go up along with the players salary. So, why is it that Gary Bettman is getting paid more than most players? I say the players should chip in n buy out his contract. We the fans want to see our favorite teams and favorite players out there. They are the ones entertaining us not the front office. Put a cap on the “behind the scenes cast” – that’s you Bettman! #NONHLLOCKOUT

  20. jeremycrowhurst - Sep 5, 2012 at 12:45 PM

    Woe is the NHL — losing money now for 95 straight years, since it was formed in 1917, according to league accountants, anyway.

    The corporate structure of NHL franchises is different from, say, football, because a significant number of NHL teams are owned by the same corporate entity that owns the arena. (By contrast, only one NFL stadium is privately owned.) There have always been teams that lost money, but still made the owners rich because they were set up to funnel the profits through the stadium. Where you have organizations that own the NHL team, the arena, and an NBA team playing in the same arena, it becomes very difficult to parse out the profits attributable to the teams versus the venue.

    The one constant throughout the history of the NHL is that there has been a lot of really bad management. Columbus brings to mind one of the best examples: for more than 40 years, one of the best hockey markets in North America was Cleveland — they had a very profitable series of teams from 1931 through 1972 in the AHL, but the NHL continually refused to grant them an expansion team. Then the WHA came in, and the Cleveland Crusaders drew away their audience and killed them. Bad management of the WHA killed the Crusaders (and later the rest of the league), at which point the California Seals moved to Cleveland and played as the Barons. They too had management problems, and ultimately failed because they weren’t able to buy the arena they were playing in, and the terms of their lease were too onerous for them to make money.

    It boggles the mind that the NHL continues to prop up teams in impossible markets, while ignoring the cities (and owners) who could clearly run teams profitably.

  21. woodsvikes - Sep 5, 2012 at 4:27 PM

    Yup the owners lost $240M last season… Ok so where exactly did you lose this money?? Ah, to players huh, umm well let’s do a little research here and see what we can come up with:

    In 2003-04, the last season before the only labor-erased season in the history of major North American pro sports, NHL teams paid $1.332 billion in player salaries, according to USA Today’s salary database. In 2011-12, NHL teams paid $1.699 billion in player salaries. Adjusting for inflation, salaries rose just over $84 million over the last eight years, an average of $2.8 million per team.

    While salaries are slightly higher than they were eight years ago, NHL revenues are not. In 2003-04, league revenues were $2.1 billion. In 2011-12, that figure reached $3.3 billion.”

    source: http://aol.sportingnews.com/nhl/story/2012-08-23/nhl-labor-talks-gary-bettman-lockout-sept-15-cba-player-salaries-zach-parise

    So that’s a difference of $1.2 billion in revenue increase from ’03-’04 to ’11-’12. Teams are paying out $367M more in contracts over the same period of time. So that’s $833M to the plus side… so if owners are so broke… where is all that money going??? It’s not going to the players, so who??

    • tealwithit - Sep 7, 2012 at 5:22 AM

      There’s a reason you don’t see the 2003-04 season used in comparisons with the 2011-12 season, no matter which side is being argued. Player salaries were out of control before the lockout – I think everyone can agree with that. As you may recall, the fans were on the owners’ side last time.
      Try using the post-lockout figures. HHR has grown by about 50%, while player salaries have grown by about 70%.

      • tealwithit - Sep 7, 2012 at 5:22 AM

        *HRR

  22. woodsvikes - Sep 5, 2012 at 4:29 PM

    Yup the owners lost $240M last season… Ok so where exactly did you lose this money?? Ah, to players huh, umm well let’s do a little research here and see what we can come up with:

    “In 2003-04, the last season before the only labor-erased season in the history of major North American pro sports, NHL teams paid $1.332 billion in player salaries, according to USA Today’s salary database. In 2011-12, NHL teams paid $1.699 billion in player salaries. Adjusting for inflation, salaries rose just over $84 million over the last eight years, an average of $2.8 million per team.”

    “While salaries are slightly higher than they were eight years ago, NHL revenues are not. In 2003-04, league revenues were $2.1 billion. In 2011-12, that figure reached $3.3 billion.”

    source: http://aol.sportingnews.com/nhl/story/2012-08-23/nhl-labor-talks-gary-bettman-lockout-sept-15-cba-player-salaries-zach-parise

    So that’s a difference of $1.2 billion in revenue increase from ’03-’04 to ’11-’12. Teams are paying out $367M more in contracts over the same period of time. So that’s $833M to the plus side… so if owners are so broke… where is all that money going??? It’s not going to the players, so who??

    • woodsvikes - Sep 5, 2012 at 4:30 PM

      Opps sorry for the re-post.

  23. dsnay - Sep 5, 2012 at 5:30 PM

    It’s watered down. Reduce teams and make it harder to get in playoffs

  24. babykaby - Sep 8, 2012 at 3:28 AM

    Lord knows I am not the sharpest tack in the shed, but don’t the owners agree to the outlandish contracts being offered by their GMs to the players? As far as I know there isn’t anyone holding a gun to the heads of these GMs demanding they offer players the amount of money and/or length of time they are being offered. Poor decisions are being made on what is being offered in player contracts. Example: Dennis Wideman. That said, a player has the right to get as much as he can. He signs a contract and in good faith expects it to be honored. It is absolutely ridiculous to expect a player to be willing to give a huge chunk of it back. If they don’t want to pay up, it should never have been offered. If it was me, I absolutely wouldn’t agree to it. Owners made this mess, they need to suck it up and learn the lesson. Also, they need to replace Bettman before the advancement they have made in growing fanbases is completely ruined. Hockey will not bounce back like football in the US.

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