What is Lord Stanley’s Cup worth to a National Hockey League team? For the Chicago Blackhawks, who defeated the Boston Bruins 3-2 last night at TD Garden to win the 2012-13 Stanley Cup in six games, about $50 million.
The Blackhawks, who also captured the Cup in 2009-10, were already the league’s fourth-most valuableand sixth-most profitable team, worth $350 million and posting operating income (in the sense of earnings before interest, taxes, depreciation and amortization) of $20.5 million during the 2011-12 season.
Although team owner Rocky Wirtz says the Blackhawks are losing money, it is only because his math omits revenue from United Center Joint Venture, which operates the arena Wirtz co-owns with the NBA’s Chicago Bulls. (I wrote eight years ago about how a report on league finances compiled by former Securities & Exchange Commission Chairman Arthur Levitt Jr. excluded suite revenue from the United Center in the hockey team’s revenue).
This explains why the Blackhawks have among the lowest general ticket pricesof any big-market NHL team, have among the priciest suites (about $200,000 per year, on average) and have among the highest prices for concessions and parking. Blackhawk fans can be expected to pay more next season.
Another off-balance sheet beauty: Comcast CMCSA +0.78% SportsNet Chicago, the regional sports network of which the Blackhawks own 20%. The RSN earns money from both advertising and carriage fees yet pays the hockey team less than $8 million a year in rights fees. This past regular season the Blackhawks had the NHL’s fourth-best average local cable rating (5.5), 77% higher than the previous season. But CSN Chicago had an average affiliate fee of just $2.75 last year according to SNL Kagan, significantly lower than its sister RSNs in Washington D.C. ($4.02), Philadelphia ($3.18) and Bay Area ($3.05). That will change soon.
Most of the $50 million in added value will come from additional revenue from United Center JV (suites, concessions, advertising) and more advertising and carriage income from CSN Chicago. That is why Wirtz will likely still claim the team is losing money even if Johathan Toews and Patrick Kane lead the Blackhawks to another Cup. But you would have to pony up $400 million or so to snatch the team from him. (Forbes)
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