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The Wild Lost Money? And ECHL Conference Differences

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Wait, hold on, did I hear that right?

Goooo Wild or whatever!

The Minnesota Wild, who have never NOT sold out a game (mmm double negatives), LOST money last year? 

From TwinCities.com (found via Puck Daddy Headlines): “Leipold, who admits the Wild lost money last season when they failed to make the playoffs for the second consecutive season, shrugs off the possible end to the streak.”

Now, I’m no accountant – but is it just me, or is that just horrific business management?  Basically, you did as good as you could possibly do (minus making playoffs, which should be gravy anyway – pretty sure you’re not supposed to build a business strategy that counts on non-guarantees) and still ended up in the red.

Every single seat sold every night.  And that’s not enough to make money.  Why own the team then?  How’s about charging more and finding the tipping point?  Not exactly pushing the supply demand thing very far there…. (says Fat Cat Capitalist Bourne).

Enlighten me, anyone.  How is it possible to sell every conceivable printed ticket and not end up making bank?

*****

You know what’s pretty crazy?  The difference between playing in the Eastern / Western conferences in the ECHL.  Basically, it breaks down like this:

Nearly every AHL team is on the east coast – there are some minor exceptions, but the bulk of them are out that way.  Often, call-ups are a last minute thing.  So it’s easy for an AHL team to call-up a nearby ECHL team and have some lucky kid hop in his car and drive the hour or two.  So if you want to get a lot of AHL opportunity as a young guy with no two-way deal, it makes a lot of sense to be out there.  More pro scouts out East too.

The cities in the ECHL’s Eastern Conference are, um, (tactfully put) “suspect”:  Wheeling (of the song written performed by ECHL/AHLers “Death is Better Than Wheeling“), Johnstown, Trenton, Elmira…. the list goes on and on.  And most of the arenas are fairly average, as far generalizations go.

The Western Conference, on the other hand, generally has sparkly, nice new buildings.  And the cities?

They’ve lost a few of these teams in the last year or two, but when I played there it was:

Las Vegas, Phoenix, Victoria, Long Beach, Salt Lake City, Boise etc. etc.  Great places to spend your winter.

Since it was harder to get called up from there, those teams generally have committed affiliates with lots of two-way contracts, and lots of older players on one-way ECHL deals who were comfortable staying where they’re at.

They had the guys who want to still play hockey and live somewhere nice (some may be on the downside of their careers), so you get players like the brothers Ferraro (Peter and Chris), Marty Flichel, Kimbi Daniels and so on.

It makes the hockey totally different – the Eastern Conference is younger, faster and more reckless, while the Western Conference is older, smarter, and more NHL style, because it attracts guys who just want to settle down in a nice city for the winter and play puck.  Just thought I’d pass along that strangle little nugget for everyone.

*****

 If you’re in the mood for little tidbits like that, check out Puck Daddy today – I did a Top Ten of “Things I Woudn’t Know If I Didn’t Play Hockey.”  Fun.

I’m finally getting into a routine of creating columns and blogging – if you haven’t noticed, most posts will probably be shorter, but they’ll link to my daily post wherever it is around the ‘net.  Thanks for your continued support of Deadspin Bourne’s Blog!  Somehow we’re setting personal traffic records in pre-season, weee… welcome our new friends!

Comments

19 Responses to “The Wild Lost Money? And ECHL Conference Differences”
  1. ms.conduct says:

    Maybe Leipold meant that they lost money they could have gotten if they made the playoffs, not lost money over all.

    Seems like the beat writers would have been on that like a duck on a junebug if the wild had REALLY lost money. They’re sure as shit not spending it in Houston…

  2. NHL Hockey owners never lose money like you and I lose money. Here’s how they figure it. Two years ago, I made 50 million dollars. Last year, I only made 45 million. Hence; I lost $ 5 million dollars. They all do it the same way.

  3. AiH says:

    Has to be all those trips to Alberta and B.C. – the Wild got killed by the airport currency exchange rates.

  4. Firestorm says:

    Re: Wild losing money:

    I believe the standard in the NHL is that ticket revenue accounts for about 50 percent of a team’s total revenue. The rest comes from media rights, TV contracts, sponsorships, corporate boxes, merchandise, et al.

    So even though Wild fans are spilling out of the building, the team isn’t generating enough revenue to cover salaries and expenses.

    That’s why it’s a non-starter when the discussion comes up about teams in Winnipeg or Quebec City (or even staying in Edmonton). You can certainly sell tix in those cities, but that’s only half the story. You need corporations that can buy luxury suites, be game sponsors, buy rink board advertising and so on.

    It’s why Bettman keeps pushing the southern cities. If the NHL has a truly national presence in the US – north/south/east/west – it has a better ability to sign a national TV deal that’s worth a lot more than a few thousand tickets sold in mid-major or small TV markets.

    Think of baseball or football – a lot of those teams are making money before they sell a single ticket. You can see a baseball stadium full of empty seats and still have the owner smiling. That’s where the NHL wants to be.

  5. artandhockey says:

    @ firestorm… right on, a solid explanation!

  6. JohnB says:

    The Johnstown Chiefs closed down last year and moved to Greenville, SC. This will be Greenville’s second run at an ECHL team. Neil Smith still owns them. They have affiliations with the Rangers and Flyers.

  7. mark says:

    Leipold is destroying the wild like he did the Preds. He completely changed the marketing of the team, and I know it upset quite afew season ticket holders, including me. Every game is a sell out. Don’t change your marketing plans.. it appears to be working pretty good..

    Maybe the money on the new mascot or all the new ads/posters/billboards caused the loss?

  8. jtbourne says:

    Firestorm – I understand that they need suite sales and sponsorships to get ahead, but you would think by constantly selling out it would be an attractive place for major corporations to sponsor. It’s not like the Twin Cities is a small area lacking big business. I’d be stunned if they couldn’t fill those suites with the amount of interest there is for that hockey team there. Maybe they just have crappy sales people? Bogged down by the recession? Are doing what Jeff Stockton suggested?

  9. minnesotagirl71 says:

    I heard somewhere the team lost $2 million last year. According to HFBoards.com “Leipold says that for a team to make a profit in the NHL, reaching the playoffs is imperative. Leipold, who lives in Racine, Wis., said the Wild “are not losing that much money” and added: “We’re fortunate. We’re fine.” He knows that winning helps improve any team’s bottom line.”

    I think the Wild sold far fewer suites last year than in previous years – which hurt, I’m sure. There were lots of dark empty areas in the suite level. The Wild players own a handful of suites and give the tickets away each game.

    Even though they’ve missed the playoffs for the past couple of years – the Wild have 200+ fans going on the Finland trip. I wonder how many Carolina has….

  10. Firestorm says:

    @jtb:

    Surprisingly, Minneapolis is home to a number of Fortune 500 companies,  so your point that “big industry” exists in Minnesota is valid.

    But after Target and Xcel Energy, most are connected to the financial industry (Who knew that “Thrivent Financial for Lutherans” was a Fortune 500 company?)

    As you may have heard, the financial industry hit a bit of a bump in the last couple years. Those guys are not exactly flush with sponsorship dollars these days. And corporations are increasingly held to account for their spending. Investors ain’t buying the whole corporate jet/luxury suite lifestyle that was common before the recession.

    So maybe the Wild have crappy sales people. Or maybe the industries they have in the Twin Cities just can’t make the business case for putting a million-dollar sponsorship into a pro hockey franchise right now.

    And if tix only represent half your revenue, when corporate bucks disappear the team is going to lose money.

    (Sidebar discussion: Gotta love my man Ron Artest’s defense of Pluto this week. Should name your Twitter rankings after him:

    “Pluto is not even a planet any more, which I’m very disturbed about,” Artest continued. “When I grew up, Pluto was a planet. And now I’m 25 and I turn around and Pluto’s no longer a planet. I gotta find that guy (who changed its planetary classification) and elbow him in the nose. I love Pluto. Everybody loves Pluto.”

  11. Messier's Barber says:

    I volunteered for an eastern conference echl team at the begining of last season and all the office guys did was complain about how much harder it is for an eastern team to win the cup because there are a few more teams. Then I moved to SLC and found that it was a whole different game. The West is far better. And Bourne, all I could think about while sitting in the half empty E-center was how awesome it must have been to be there for the gold medal game. You got any good stories about playing here? I know you know that SLC isn’t as bad as outsiders make it out to be. And I’d love to read an article about some wild Vegas road trips. Thanks man love the stuff on here and puck daddy.

  12. neil says:

    Wait… So Greg Zanon made more money last year than the guy who owns the team?

  13. Matt the Aussie says:

    Hey jtb, just found your blog and I’ve been really impressed with your writing style and your choice of topics. I will be sure to keep reading your blogs and your articles. :)

    I also wonder how a team in such a hockey-mad community as Minnesota can lose money. I think with Backstrom back in form and Havlat actually producing, this would be a playoff team no question. Hopefully they can turn it around soon.

  14. MattyJ says:

    In the late 90′s and early 00′s I lived in San Diego. The GM/Coach of the WCHL, then ECHL, San Diego Gulls was a really grass-roots kind of guy in the community, helping out with pickup and whatnot during the summer. It was awesome to hear his stories, especially about his one NHL game. Anyway, he said pretty much what JTB says. He got stacks and stacks of FAXes from all over the place during the summer, people wanting to play in San Diego. Mostly guys in the twilight of their careers, or younger players that knew they couldn’t make the NHL. At that level, who *wouldn’t* want to play in San Diego?

    I miss minor hockey. The guys playing in the west do it because they enjoy it and it shows. I’d drive 50 miles to Stockton to watch the Thunder before I’d drive to my closest NHL arena (Sharks.) Hell, I wouldn’t go to a Sharks game if I lived inside The Tank.

  15. TN Hockey says:

    Craig Leupold is a Telemarketer. Tell me you believe ANYTHING out of his mouth.
    Ask me why I love this 2Face Backstabber as much as I do. (after checking my ‘name’)

    BTW, a double negative is indeed proper “King’s English”. Back in the early days of this country, a double negative was used to express something Very Negative. Seriously, it isnt just redneck logic or publik skool edukayshun in action.

  16. pat says:

    As firestorm mentioned the majority of the revenue doesnt come from ticket sales. I read that the average revenue (concessions, ticket sales, merchandise) is roughly 400k per nhl game. Mulitply that by 41 (you only play half your games at home) and you’re only clearing 16.4 million a year which is about half the cap floor for the league.

    So you’re beloved islanders need sell out every game (which they don’t) and then find alternative sources of income to basically double their money to hit the cap floor (which they aim for consistently) just to break even (which they don’t). This doesn’t include all the rest of the staff that doesn’t count against your cap (gm’s presidents, scouts, farm system players, coaches, travel expenses, rink staff etc) The major alternative source of income for most teams is tv deals.

    The Yankees own YES network and the deal they have with the network is that they will receive about $200 million a year (who get that money from advertising) that’s how they afford to have such monster payroll every year.

    This is why Bettman doesn’t really want to move a team to Winnepeg. Who wants to pay huge money to advertise during games in a metropolis of around 800k people. It’s tough to fill that gap. Conversely southern teams run into different issues. Although they are in larger metropolis’, the interest in the teams per capita is much lower therefore what’s the advantage of a company advertising in these areas if they feel like no one is going to watching that game and hence, their advertisement.

    Minnesota is kind of a unique situation in my eyes because of the size of the metropolis and the interest in the team in that metropolis. I will say that I’ve read that the red wings basically need to make it to the stanley cup every year to make any money (but their local economy has been hit harder than most). They struggle to fill up Joe Lewis on a consistent basis. It was depressing nonsoldout playoff games their over the past couple years

  17. St. Cloud Gopher says:

    Firestorm and pat are right on. The majority of teams ARE reliant on a playoff push to break even. Football and baseball (with their ridiculous revenue sharing) are different. But hockey, which already has a weak TV deal, can’t ask for much when it comes to advertising. And the Wild, for instance, are broadcast locally on FS-North and KSTC. They finally went full HD last year (except for KSTC, which is below standard-def quality) and had 90% if not all of their games on TV (except for those that live more than 90 miles outside of the Twin Cities because they don’t have that channel).

    This is why the next TV deal (after this year I believe, maybe 2011) is so important. There is an absolute NEED to get back on ESPN/ABC. NBC does a decent job, but the Disney channels offer so much more. Add to that the atrocity that is VERSUS (who are starting to figure it out, but try to sell an ad when the money knows half the country doesn’t get the channel and the other half can’t find it) and there is no way the NHL survives without an ESPN deal. The other option is for the NHL Network to go national on an expanded-basic level. But, since the NFL can’t even pull that off, I’m doubting Bettman and crew can.

  18. Kennedy says:

    One thing to remember is that loss for a pro sports franchise is not necessarily a bad thing. The team is owned by a company that is in turn owned by another company. So a $10MM loss may get written off against a $35MM profit somewhere else.

  19. JIllian says:

    That sounds like a great assessment of the ECHL and yes the eastern teams do complain about there being too many teams and it being harder to win a championship, but if memory serves me, and Eastern Conference team has won the last 3 seasons in a row… and those teams in the eastern conference have won the most championships in the total of the Kelly Cup, I do believe.

    I also know that Anaheim called up boys last year directly from Bakersfield (ECHL) bypassing their AHL club completely. So there is another bonus for the westerners.

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