The NHL and NHLPA are once again at a stalemate in CBA negotiations. The owners have been looking for player concessions across the board, as they try to fix a system which saw 18 teams lose money in 2011.
Earlier today, Forbes.com released the 2012 edition of The Business of Hockey, with some surprising numbers that leave us questioning how much this system really needed fixing.
Lets start with the team values. This year's numbers show that the least valuable team is the St. Louis Blues, valued at $130 million. In 2011, the least valuable team was the Phoenix Coyotes at $134 million. So the least valuable team in 2012 was $4 million less than 2011. It's not a number to be proud of, but it's not that significant either, especially considering that it's the St. Louis Blues. The Blues have emerged as a powerhouse in the West. Over the next few years we can expect the team's value to sky rocket as the ticket prices rise and the team consistently makes the playoffs.
In 2011, the most valuable team in the league was the Toronto Maple Leafs at $521 million. The Leafs maintained top spot in 2012, rising to an incredible $1 billion worth, a 92% increase.
The average NHL team is worth $282 million. In 2011, the average was $240 million. That's an increase of 17.5% on average.
The one thing the owners have going for them during these negotiations is that too many teams are losing money. In 2011, the team that lost the most was the Phoenix Coyotes at $24.4 million. In 2012, they lost the most at $20.6 million. It's still a significant loss, but at least it's trending in the right direction. In 2011, the Maple Leafs had an income of $81.8 million. In 2012, they had an operating income of $81.9 million. These numbers are exactly what the NHL needs; both the most fortunate and unfortunate teams are improving, with the latter at a greater rate.
How do you interpret the NHL valuations when compared to 2011?
In 2011, the average team (excluding the Maple Leafs, New York Rangers and Montreal Canadians to avoid skewing the data) had an operating income of -$1.64 million. In 2012, still excluding the big three, the average was $1.58 million. Now, don't get me wrong: These are not attractive numbers, but at least they're heading in the right direction, especially when you consider the revenue sharing from the three teams I excluded.
In 2011, 18 teams lost money. In 2012, that number was reduced to 13. Again, not attractive, but heading in the right direction.
So, does the NHL have problems? Yes. Does it need fixing? Yes. But if the financial numbers were improving under the 57/43 regime, they will skyrocket under the 50/50.
The players have already made major concessions in these negotiations. The owners could accept the latest player offer and the business would flourish. The average operating income would skyrocket, and the teams in the red would near zero. But they're asking for more, and it's not worth it.
By asking for more the owners are only angering the fans and players further while dragging out the lockout and putting the entire season in jeopardy. The 2012 numbers show that the league is trending in the right direction, but fans are losing interest without hockey. There's no telling what the trend will be if the whole season is missed.
The point is, the owners can keep pushing, and they may eventually get the players to concede the rest of the way, but it won't be worth the lost revenue and the loss of fans.
If they focus on reaching a deal now, the players will likely concede a few more inches. Hockey can start by the end of December, the owners will be getting a significantly larger piece of the pie, and most importantly, they can salvage the financial trend by bringing hockey back to fans before interest is lost for good.
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