NHL franchise values, pay scale key factors in lockout
By Stu Hackel
The owners and players are continuing their negotiations with the help of federal mediators, and we're not going to hear anything about what is going on or even where it's going on until the process is over, one way or another. There's a gag order on both parties, thankfully, since every previous self-imposed attempt to keep things quiet has failed. Usually, the less heard about what's going on, the better. We mentioned long ago that when you don't hear anything about negotiations, that can be a sign that progress is being made, but when things aren't going well, you'll hear about it, either at formal press briefings or leaked to the media, and we've had lots of briefings and leaks until now.
If you want to know more about the mediation process, Eric Macramalla provides it here at TSN.ca.
UPDATE: Mediation concluded after two days with the sides remaining apart, unable to close the gap on their differences. Here's TSN's report.
By the way, if you think this is a battle strictly between billionaires and millionaires, you might want to read Pat Hickey's story in The Montreal Gazette about Mathieu Darche, who for many years as a pro shuttling between the NHL and minor leagues made around $75,000 and only got his first one-way NHL contract for $500,000 per season when he was 33 years old. Darche, who turned 36 on Monday and is a free agent now, has never made a million a season. He told Hickey that there are 200 NHL players who, going into the lockout, had signed contracts for less than $1 million. It's a good story and provides some valuable insight into a sizable portion of the player pool: the guys who don't often show up in the headlines and, just like many of us, have to keep an eye on their spending habits.
Of course, there are players making a boatload of money, and the latest issue of Forbes, which contains the magazine's annual valuations of NHL franchises, also lists the highest-paid players, and that includes their salary plus endorsements. Sidney Crosby ($12.7 million) and Alex Ovechkin ($12 million) are the top two, but Forbes says that Crosby's number is still $4 million less than the athlete ranked No. 100 in their annual look at the world’s highest-paid athletes.
On the "billionaire" side of this dispute, Forbes reported for the first time that one franchise is said to be worth a billion dollars -- The Maple Leafs. Just imagine what they'd be worth if they were good.
The Forbes team valuations have always been disputed by the league and the clubs, and this year is no exception. Since the NHL doesn't open its books to Forbes, these rankings can't be accurate, but for better or worse, they are the best available data we have.
“I suppose we should be flattered that we’re on the top of the list, but we’ve no idea where they get their numbers,” Maple Leaf Sports & Entertainment president Tom Anselmi told Kevin McGran of The Toronto Star. The Leafs were part of the recent sale of the majority share of MLSE (which includes the NBA's Raptors, MLS's Toronto FC, the AHL’s Marlies and the Air Canada Centre) that was held by the Ontario Teachers Pension Fund for $1.32 billion, and Forbes estimates that MLSE is worth $2.05 billion with the hockey team's value at $1 billion. Last year, Forbes had the Leafs at a mere $521 million, so the near doubling of their value shows that a team is worth what someone is willing pay for it.
At the bottom of the Forbes list are the Blues, who were valued at $130 million. The team was recently bought by local beer distributor Tom Stillman for $120 million (that includes the AHL Peoria Riverman, a percentage of the Peabody Opera House, and the lease to operate the Scottrade Center) who has made cost-cutting moves in an attempt to become profitable. The fans fill the building, but St. Louis is not a flourishing city economically. It's not a lucrative hockey TV market and the region's business community is not especially large, which helps keep the team in the red.
It's that wide disparity between the wealthiest teams and the ones on the bottom that Forbes says is fueling the lockout. They say 13 of the NHL's 30 clubs lost money lost season, although as we discussed earlier this month in the case of the Florida Panthers (a franchise that Forbes annually says loses millions), Johnathan Willis of The Edmonton Journal’s Cult of Hockey blog uncovered that their parent company is hugely profitable, that the hockey club drives that profit, and that some teams' finances can be manipulated to show losses.
Regardless, the owners and players entered into mediation deeply dug in and Luke DeCock of The Raliegh News & Tribune writes, "The only Federal agency that might be able to get some traction is the Army. The two sides are so entrenched in their positions, heavy artillery might not even be able to dislodge them, but it might have the best shot."
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