New York Rangers: What Missing the Playoffs Will Cost Them
I’d argue that the Rangers really couldn’t give a damn about their fans, but we’ll leave that debate for another day. Instead let’s take a look at a New York Times article that investigates what’s at stake financially if the Rangers lose one of the next two games and miss the playoffs.
The following quotes are from this NY Times article .
State of the Rangers:
"Madison Square Garden Inc., which owns the Rangers, will certainly survive if the team misses the playoffs because the Rangers are only one part of a $1 billion enterprise that includes the Knicks, the Liberty and other sports properties; Radio City Music Hall and other theaters; and the MSG Network."
"But because all N.B.A. and N.H.L. teams must keep dates open at their arenas in case they make the playoffs, the elimination of the Knicks and the Rangers from the postseason means the Garden would remain empty for many more nights in April and May."
"The loss of playoff revenue would also come as Madison Square Garden spends about $800 million to renovate the 42-year-old arena. Home playoff games would not only generate a few more million dollars to help pay for the work, but would also give the Garden’s salesmen more ammunition to sell season tickets, suites and advertising for next season."
How Much the Rangers Would Earn per Playoff Game:
"Tickets for the first round of the playoffs cost roughly 25 percent more than regular-season games, so the team would generate about $2 million in ticket revenue for each first-round home game. As the eighth seed, the Rangers would host up to three home games, worth as much as a total of $6 million."
- "But like all playoff teams, the Rangers would give about half of that money to the N.H.L. In each round, the clubs still playing must pay the N.H.L. a low six-figure fee to help cover the league’s costs to produce the playoffs, including expenses for travel, marketing and officiating. The fees increase each round."
- "The Rangers would also contribute part of their playoff ticket revenue to the N.H.L.’s revenue-sharing program, which redistributes money to the financially weaker teams."
Profit Earned from Food and Merchandising:
"The Garden, though, would keep all food and beverage sales because it runs the concessions. Fans spend $18 to $26 a person at N.H.L. playoff games, said Chris Bigelow, the president of Bigelow Companies, a consultant to stadium operators. The Rangers would be on the high end of that range."
"Roughly half of the revenue from food and beverage sales covers the Garden’s expenses for buying the hot dogs, pretzels and soda, and for hiring the workers to serve them. The Garden’s profit, then, is equal to 18,200 fans multiplied by about $13, or about $235,000 for each playoff game."
"Fans spend about $5 a game on T-shirts, hats and other merchandise during the N.H.L. playoffs, Bigelow said. They might be reluctant to buy a $25 T-shirt if they expect the Rangers to be knocked out in the first round — a strong chance if they end up playing the Washington Capitals — though sales could jump if they upset the Capitals."
"Even then, the team receives only a small portion of merchandise sales, with the rest going to the league."
"The MSG Network can sell more ads for each televised playoff game. But like other cable networks, MSG sometimes loses games if NBC or Versus broadcasts them nationally, a possibility because of the interest in the Capitals."
"Either way, the MSG Network is owned by Madison Square Garden Inc., so its revenue would be shared with the corporate parent."
"The Rangers in recent years have not raised ticket prices in seasons after they do not make the playoffs."
In total, the Rangers, if they played three home games at The Garden in the first round would earn: about $3 million in total ticket sales, about $700,000 in food sales, a negligible in t-shirt sales ect., and an undisclosed amount in ad sales.
So they’re looking to lose about $4 million minimum by not making it to the first round of the playoffs. In all likelihood that number is exponential in advanced rounds. So they would lose at least $4 million during the first round and even more for other rounds.
The thing is, they aren’t losing this money; they just aren’t earning this money. But it’s out there…if they can just win two more games.
My question is, what is $4 million to an ownership that didn’t seem to be effected when they paid $10-plus million to some woman who sued former Knicks president Isiah Thomas? Hopefully times have changed and this will force them to reconsider Glen Sather’s future with the organization. We can only dream.
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