The Carolina Hurricanes operated at an $11.5 million loss last season, dead last in the NHL. While the value of the team grew 8% to $168 million (22nd in the league), that hefty operating loss has to be troubling to owner Peter Karmanos, who has already stated that he doesn’t have confidence in the current marketing efforts for the team.
The entire Southeast Division of the NHL is a black hole from a financial perspective — the ‘Canes actually made the most revenue of any team in the division, yet had higher expenses leading to that loss. With the — how you say? — “global financial panic” taking hold, will professional ice hockey be able to stick it out in North Carolina and compete with the honest hard-working American sports for a shrinking entertainment dollar? Karmanos selling the team in a buyer’s market seems unlikely, but could the Hartford Whalers try to make it in a stronger hockey town? (Like, I don’t know, in a widely-speculated NHL European division maybe?)
[Canes Country: Forbes Ranks Carolina Profitability Last in NHL]
4 responses so far ↓
1
Back to Hartford, baby!
2
I find it difficult to believe the team had its highest revenues ever yet had such a huge loss. The teams do not give out these numbers, so it would be interesting to see how Forbes came up with them.
Anyway, I would counter your post with this article: http://www.bizjournals.com/triangle/stories/2008/09/29/story2.html
“As the team heads into a new season, President and General Manager Jim Rutherford is optimistic about the franchise’s finances. “If we meet our projections on gate receipts, we’ll be very close to break-even,” he says.”
3
Jonathan, thanks for the link. I also saw that the ‘Canes won’t confirm Forbes’ numbers, so I’m really curious about where they came from and how close to reality they are.
The quote from Rutherford you included was from a month ago — I wonder if he’s still optimistic about “meeting projections on gate receipts.” My hunch is that in this economy, with spending and credit on the decline, hockey tickets will be among the first belt-tightening measures we take.
I’m certainly rooting for them, but if I were Gary Bettman planning a European division behind closed doors, I wouldn’t expand to accomodate it — I’d relocate a lot of Southeast teams.
4
While the economic situation is a good point, it won’t necessarily have a huge affect on the sport this season because season tickets and mini plans were locked in well before everything hit the fan.
There’s also the theory that I always see amusement parks raise that when times get tough people stop traveling and find ways to be entertained close to home. Whether that could be extended to sports, well… We’ll see.
Either way, even if the Forbes numbers are in fact accurate, sports owners are in it for the resale value (in addition to any passion they may have for the sport). If the franchise value went up $12 million last year, then that’s a good thing.
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