sw61776 Posted November 12, 2004 Share Posted November 12, 2004 TSN.ca Staff with Forbes, Star-Tribune files 11/12/2004 A report released in the latest issue of Forbes Magazine suggests that the National Hockey League is losing money - but not nearly as much as the owners claim. The article, written by Forbes senior editor Michael Ozanian in the Nov. 29 issue, says that 17 teams lost money, and the average team lost $3.1 million US for total league operating losses of $93 million US (before interest, taxes, depreciation and amortization) on revenue of $2.2 billion US during the 2003-04 campaign. The NHL has claimed $224 million US in losses for last season. The article also states that the NHL lost $123 million US on revenue of $2.1 billion US for the 2002-2003 season, a stark contrast from the $273 million US in losees reported by financier Arthur Levitt in February. "Forbes is once again pulling numbers out of thin air," NHL chief legal officer Bill Daly told the Minnesota Star-Tribune. "I would suggest that they would have been far better advised to read the Levitt Report, as its author had complete and unfettered access to all 30 of our clubs' financial information." According to Forbes, the difference between what the league is stating as losses and the magazine's own figures has to do with inconsistencies on what's included as revenue. As an example, Forbes cites that the NHL included only half of the $17 million US the New York Islanders got last year for their cable broadcasts. The magazine states that for the team's ownership - who paid $188 million US for the Islanders and their cable deal in 2000 - the economic value of owning the team would include the entire cable deal. In the article, Ozanian said Forbes spoke with bankers, broadcast sources and league sources while studying arena leases, ticket sales and prices. Levitt's study - which endorsed the NHL's central accounting - said that only 11 of the NHL's franchises actually turned a profit for the 2002-2003 season, while the remaining 19 reported losses averaging $18 million US a team. Of those 19 teams, four suffered operating losses of over $30 million US, two were in the $20-29.9 million range, six were between $10-19.9 million, another six suffered losses of $5-9.9 million, and once took losses of less than $5 million. Of the 11 other teams, only two saw profits of over $10 million US, with four in the $5-9.9 million range, and five with just under $5 million in the black. According to Forbes, the Toronto Maple Leafs led the league in operating income with $14.1 million last season, followed by the Minnesota Wild's $11.5 million. Files from Forbes and the Minneapolis Star-Tribune were used for this report. Forbes Quote Link to comment Share on other sites More sharing options...
rbdf Posted November 12, 2004 Share Posted November 12, 2004 to be honest, I can't beleive the isle's cable deal is paying them $17 mil/year. Buffalo's bankruptcy last year showed they were receiving $5 mil from adelphia under a deal that was considered a "gift" to the team as adelphia and the sabres were owned by the same family - market value was apparently more like $3 mil. I know, your talking buffalo vs. long island/ny metro area, but still, that just seems like way too much - maybe it was a two year deal and that's why they only included half in their revenue - there are accounting rules and basic principals that must be followed like matching revenue to the period it is earned in. aahhh, who knows. I just want them to sort this crap out and get back on the ice. Quote Link to comment Share on other sites More sharing options...
devilsadvoc8 Posted November 12, 2004 Share Posted November 12, 2004 (edited) to be honest, I can't beleive the isle's cable deal is paying them $17 mil/year. Edited November 12, 2004 by devilsadvoc8 Quote Link to comment Share on other sites More sharing options...
Don Posted November 12, 2004 Share Posted November 12, 2004 Forbes did a similar evaluation last year BEFORE the lock-out and just about everyone disregarded it because they don't have access to the books are are just guessing at the numbers. They can ballpark things based on ticket prices and attendance numbers, but they off on expenses and WAY off on revenue. The report was universally rejected last year, but will likely be supported by the players this year. Even though it still says that the NHL is hemmorraging money. Remember, Levitts asked the union to come in and investigate the numbers and scrutinize what is in the report. He welcomed their criticisms and if he missed things he was willing to make changes. Instead the union rejected the opportunity. Quote Link to comment Share on other sites More sharing options...
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