NHL's Most Successful Teams in 2008

Last Thursday, BizJournals came out with their "most successful" teams in the 2008 calendar year. Here's how they did it along with the time frame they used:

"Half of a team’s score was determined by its level of success on the field, court or ice. Bizjournals’ formula considered each franchise’s win-loss record, average margin of victory (or defeat), and playoff results.

The other half was determined by a team’s relative success in business. The formula analyzed average home attendance, the percentage of available seats sold for home games, and the increase (or decline) in a franchise’s value from 2007 to 2008. The latter was based on annual estimates published by Forbes magazine.

The study was confined to the 2008 calendar year. Statistics for the 2007-08 NBA and NHL seasons after Dec. 31, 2007, were combined with 2008-09 statistics through Dec. 31, 2008. Playoff results for the NFL, NBA and NHL came from the first half of 2008, since their 2008-09 playoffs had not begun as of the end of the year."

Three NHL Clubs were included in the top and bottom 10. Below is the list of where NHL teams rank (overall rank in parentheses):

1. Montreal Canadiens (4)
2. Detroit Red Wings (7)
3. Pittsburgh Penguins (10)
4. San Jose Sharks (12)
5. Philadelphia Flyers (18)
6. Chicago Blackhawks (24)
7. Calgary Flames (27)
8. New York Rangers (31)
9. Minnesota Wild (33)
10. Washington Capitals (41)
11. Anaheim Ducks (47)
12. Buffalo Sabres (48)
13. Vancouver Canucks (53)
14. Dallas Stars (55)
15. Boston Bruins (60)
16. Edmonton Oilers (61)
17. Toronto Maple Leafs (64)
18. Ottawa Senators (68)
19. Colorado Avalanche (74)
20. New Jersey Devils (79)
21. Carolina Hurricanes (89)
22. Nashville Predators (90)
23. St. Louis Blues (94)
24. Los Angeles Kings (96)
25. Tampa Bay Lightning (97)
26. Florida Panthers (102)
27. Phoenix Coyotes (107)
28. Columbus Blue Jackets (114)
29. Atlanta Thrashers (119)
30. New York Islanders (121)

And a look at how NHL clubs stack up against the other three leagues' teams:



As you can see, the NHL is very average across the board, which is a good thing to me. As is evident here as well, the NBA is top and bottom heavy, just like their attendance ranks as we found out in our last NHL v. NBA attendance tussle. One other thing, is the MLB not doing as well as many think it is?

Along with winning (duh), BizJournals found that attendance was a very key part of being a successful franchise:

"Championship teams that played before full houses did best in bizjournals’ ratings."

So maybe I'm not wasting my time with all these crazy graphs...

Come on back tomorrow.

NHL Nearing A Business Peak?

The 2008 All Star Game in Atlanta

The NHL is on pace for another record season in terms of overall revenue, ticket sales, average attendance, and TV ratings (the last since the lockout). The economy has reached new lows and every expert is forecasting hard times for the sports industry. How much danger is our sport in? A little, I think.

First, lets take a look at the Hockey Related Revenues of the past decade (click to enlarge. NOTE: the pre-lockout revenues are totals of team revenues, thus making them estimate/ballpark figures. Exact figures were not available to me):



Since the lockout, the NHL's revenue has grown just over 16% to about $2.6 Billion. Everyone has heard Commissioner Bettman's projections for this year, starting at definite growth to recent reports indicating flat or slight loss of revenue. In this economy, staying at a flat rate around the current $2.6 Billion would definitely be a great accomplishment. If the league comes through with a 1% growth as I have projected, it would be another added success for the league. But, until the economy recovers (which may take 3-5 years), I do not see the NHL growing more than 1-2% in terms of revenue per year. At the same time, if the NHL were to flatten or drop in revenue for the next couple of seasons, it wouldn't surprise me the least because I think the NHL is reaching a business peak either now or in the near future.

Why do I think this? As it says right on the homepage of this site, 43% of the leagues revenue in 2007-2008 came from ticket sales. The NHL is a gate-driven league, and I don't think anyone is in a position to argue against this. Take a look at the NHL average attendance over the years (click to enlarge):



The league average attendance is at an all-time high, and if the pace continues for the rest of this season, the league will set a new record along with most likely passing the NBA in average attendance. But, say the season ended yesterday and the 17,338 average stood for this season. The NHL does not have much room to move to expand in terms of attendance, as the average capacity in the NHL is 18,446 (take average of NHL Arena capacities). Thus, unless teams are selling over 100% capacity (which some do), the NHL average attendance cannot go any higher than 18,446.

So, what can the NHL do to continue/keep its growth and revenue going? There are simple and raw ideas everywhere such as relocation, contraction, expansion, and taking a cut to get back on ESPN. I have three keys that I think will keep the financial stability of the league up along with possibly fueling the league for future growth when the economy turns around.

• Be Very Cautious with the Salary Cap
  

Since being implemented in 2005, the NHL Salary Cap has jumped nearly $20 Million from the original $39 Million in '05-'06 to this seasons $56.7 Million. Raising the cap at $5-6 Million a year is something I never understood. What is the big rush? It seems as though the league has forced some giant contracts with such rapid inflation of the cap. Next seasons salary cap will suffer because of these jumps, as the cap will either stay flat or drop.

Just google something about bad or worst sports contracts and you will get millions of opinions on the worst ones ever signed or how huge deals are killing sports. As a Ranger fan, I cringed when I heard the amount Wade Redden got this summer. The economy slow down which is no doubt having an influence on the cap might be the best thing for it, as a couple of seasons of the cap staying flat or dipping probably wouldn't be the worst thing to happen to the league. At the same time, don't get me wrong, a top NHL player making $7 Million a year compared to Manny Ramirez making over $20 Million a year isn't fair. But you have to consider the economies at scale.

• Get Creative with Television

As the late Jack Fallah would agree with me, Hockey and Television was not a good mix from the start. It has gotten better, much better, but at the same time Hockey and Television has never really taken off, with the exception of the mid-'90s on FOX. What do I mean by creativity? How about splitting networks, adding networks, or just getting back on FOX or ESPN? At the same time, I think the broadcasting of hockey could benefit from new technology. Mr. Fallah never liked how the camera would zoom too far in on the puck, not allowing him to see players away from the puck, which is where an important part of Hockey is played, and I would have to agree.

Look, the NHL on TV is like a marriage for business purposes. Of course it helps and the relationship is OK, but everything is not there. I do not have any magic answers, I just wish the NHL would get creative and serious in exploring their options for broadcasting the league.

• The Obvious, Fix Two Franchises A.S.A.P.

I saved the most obvious for last. To me, some money the NHL earns falls between the cracks because of how much the league has to support struggling franchises in certain markets. Every league has gone through situations like this, and some successful franchises this season were once in trouble no less than 5 to 10 years ago. But, with the economy struggling to early 1990's levels, stopping the bleeding would greatly benefit the league on the bottom line. There could be many ways to do this, and I'm not sure what would be the best and most efficient, but something has to be done.

In general, I think the league is looking up and is in good position to deal with the economic struggles. I see no real reason as to why playoff ticket sales will struggle (besides the markets being in the toilet), as many fans save up for this certain time of year. Bettman and company are saying the playoff tickets will be an indicator for next season. I somewhat agree with this, but retaining current season ticket holders will be an even bigger indicator. If many teams do not reach a flat level of retention, the NHL could experience its first drop in average attendance in three years.

Sources:

Attendance: Andrew's Stars Page
Revenues: Andrew's, Daniel Tolensky
TV Ratings: Andrew's

Attendance Statistics Galore (NHL/NBA Update)

As promised a couple of times over the week, here is a look at more NHL v. NBA attendance and NHL month by month attendance. Lets start with the latter.

I decided to look at the month by month attendance this time through the capacity filled lens seeing that the amount of games in each month varies. With the average attendance, December has been the best month so far for the NHL, so lets see if that holds true for capacity (click to enlarge):



Although January suffered a drop in average attendance and total fans from December, capacity jumped as January enjoyed almost a 150,000 more fans than October in just eight more games, which is close to 19,000 spectators a night.

I also took the average of all the NHL Arenas capacities, which is why you see the NHL Average Capacity. The overall capacity game out just below 94% as you can see, but I used the NHL Average Capacity to figure that. When I took the average of all the capacity percentages from the ESPN NHL Attendance page, I got an average capacity percentage of 94.73%. What to make of the difference? Nothing really, as taking the averages of each teams capacity percentage is generally more accurate than averaging each teams arena capacity and using that figure.

Seeing as February is almost at a close, I will update this when we move into March.

As I updated the NHL v. NBA chart in capacity, I figured that looking at the capacities of teams that share venues from the competing leagues isn't exactly fair because NBA teams have more seats to fill as a basketball court is smaller than a hockey rink, duh. So, I took a look at the average attendances of the same teams which share venues, and not much changed:



The switch happened in New York City, where although the Rangers fill the garden in terms of capacity more than the Knicks, more people file through the garden turnstiles when it comes to Knick games. The Kings still outdraw the Clippers, but cannot touch the Lakers as per usual in the capacity sense.

So even though the NBA is outdrawing the NHL in some of the major cities across North America, the NHL is actually out averaging the NBA. Take a look:



One thing the NHL has going for them is that it seems that some of the franchises are much more stable in terms of average attendance than some in the NBA. The NBA edges the NHL by one team in terms of very good average attendance (over 18,000), but the NHL fires back by dominating the middle of the pack (15 through 18,000) 13 to 9.

Do all these numbers really mean anything? Somewhat, yeah. Hockey is generally agreed upon fans as a sport that is much more exciting in person than on TV. These numbers basically support that claim, and the NHL should use them somehow because they know probably a lot more than I do.

Might be all for tonight.

Thursday News and Notes

Couple of quick headlines. I'm pretty busy today but I managed to tinker with my attendance spreadsheet so I can do some new graphs and such; but that will come later tonight.

- Remember the Maple Leafs raising ticket prices for next season on Tuesday? Ken Campbell has a good article at THN in reaction to that. The point of it? Essentially, the Leafs are covering potential gains for not being in the playoffs. Welcome to Leaf Nation...

- Apparently, the NBA is taking parts from last years NHL "One Play/Live Every Shift" promo campaign (Puck The Media).

Like I said, busy for now with a test early tonight, some attendance stuff later tonight.

- Update, 2:00 PM EST:

- Ed Willes makes his case to Gary Bettman to contracting to a 26 team NHL (Faceoff). For some reason, this one line from the article seemed to tickle my fancy:

Still, for all that, the league expends a disproportionate amount of energy propping up its weakest franchises.

I couldn't agree more. He suggests dropping four and moving two, but I don't know about that. If I were to contract I would subtract two and most likely move one or two. I don't know, this topic is really for the long summer days of the off-season where spending too much time in the sun leads to crazy ideas and rants.

More later.

NHL v. NBA Attendance Update; More Coyotes News

Seeing that a report recently caused some traffic to one of my NHL v. NBA attendance charts, I figured I would update it tonight. The previous chart showed that the NHL was outdrawing the NBA in terms of capacity attendance in five out of the ten markets the NHL and NBA directly (meaning they share the same building) share. This is still as of today, but in Denver the Nuggets of the NBA have recently taken an edge on the Avalanche; as they were previously virtually tied in capacity. Take a look:



As for the Los Angeles situation, I call it a moot point. The Lakers are obviously more popular than the Kings, but the Kings are at least even with or more popular than the Clippers. When I get some time this weekend, I'm going to take a look at comparing these teams averages, as NBA teams typically have more seats to fill in an arena due to the fact that an ice hockey rink is larger than a basketball court.

In other news; Glendale, Arizona is going to be giving the Phoenix Coyotes a break in the form of $15 million a year towards the new lease deal in order to keep the financially struggling club in town (Sportsnet.ca). Along with this, the report states that the Coyotes have received one formal offer to buy the club, and they hope to have a new owner by the 2009 Draft in Montreal:

"Sources also say principle owner Jerry Moyes has had three separate out of state groups show interest with one already making a formal offer. A league source tells Sportsnet they hope to have a new ownership group finalized by the 2009 NHL entry draft in Montreal."

After weeks and weeks of bad news after more bad news for the Coyotes, there is a glimmer of hope in the Desert.

- Update: 8:45 PM EST

According to Red Wings GM Ken Holland, tickets for the Blues and Wings in Stockholhm, Sweden for the NHL 2009 Premier sold out in less than an hour today (Freep)

Well, that was quick.

That's all for tonight, more tomorrow.

Late-Night Off-Topic News: NBA borrowing $175 Million

According to the Atlanta Journal Constitution, Sports Business Daily, and Sports Business Digest; the NBA is borrowing $175 million which is to be distributed among 15 of its franchises. Where are they getting this money? Check out this quote from Sports Business Daily:

The private-placement deal was arranged by JPMorgan Chase and Bank of America. In a private placement, non-banking lenders such as pension funds and insurers extend the cash, commonly at fixed rates for five- to seven-year terms and at rates higher than what banks offer for floating-rate loans.

Wow. As much as I dislike the sport of basketball and the NBA, this worries me as the NBA is the direct competitor to the NHL. Is the NHL is this bad of shape? From the vibe I've been getting covering the business of the league in only two-three months, it seems as though the NHL is more liquid than the NBA. With over 40% of the leagues revenue in ticket sales last season, how much credit is each team paying off?

Obviously, this is very much inside information, and nothing I could get my hands on without being arrested. Let's just hope the NHL doesn't fall into a similar situation.

Will the MLS pass the NHL and NBA in Average Attendance?

The Sedin twins kickin' it.

Messing around on the 'net today, I found an article from October of '08 stating that in 2009 the MLS will pass the NHL and NBA in average attendance per game. Naturally, this got my wheels turning, as this is very much a possibility.

Below is the chart that the blog Synthetic Turf provides for their argument:

I thought this might be possible with the relatively old news that Major League Soccer's new franchise this season, Seattle Sounders FC, have sold over 18,000 season tickets for this upcoming season of MLS, and expect to average around 20,000 a game. In 2008, the MLS averaged 16,459 spectators per game; down just about 2% from 2007. By looking at the chart above, Synthetic turf is projecting an average attendance below/around 17,500 per game for the MLS over the summer of 2009. Now I'm not sure what number he used for the new Seattle franchise to come up with a the projected number for MLS in 2009, but using the season-ticket sales number (18,000) for Seattle FC, I came up with the following three projections:

1. MLS '09 (down another 2%) - 16,885
2. MLS '09 (flat difference) - 17,229
3. MLS '09 (up 2%) - 17,574

Remember, that includes the additional 18,000 (which may be bigger) per game that Seattle Sounders FC will account for. Now MLS teams have either 19 or 20 home games depending on their schedule, or roughly half the home games NHL and NBA teams have. Seeing as I don't follow the NBA with enough detail, I won't compare them to the MLS; but I can speak for the NHL.

With all NHL teams having played past the statistical "halfway point" of 20 home games each, I will use this average. According to my excel graph, the NHL average for the first 20 home games, or 300 games this season, was 17,242 per game. Compared to my 2009 projected MLS numbers, only a raise in attendance (1-2%) for the MLS will put them over the NHL average attendance mark. But, this neglects the second half attendance boost the NHL receives, which as of tonight before the games were played was up from 17,242 by a little over 1.5%, or 17,512.

Could the MLS pass the NBA and NHL in average attendance per game? Absolutely. Is it fair to compare these numbers? Absolutely not. The amount of teams (30 for NBA and NHL; 15 for the MLS) along with the number of games (82 each for NBA and NHL; 30 league games each for MLS) make the attendance comparison unfair. If the MLS ever gets near the total fans for each sport (According to my spreadsheet, just under 10.4 million fans went to NHL games in the first "half"), then maybe we will talk.

- Update: 11:35 PM EST

According to TSN's Darren Dredger, an offer has been made to buy the Phoenix Coyotes. Someone must have been drinking somewhere...

More on this tomorrow (hopefully).