How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

  1. You have chosen to ignore posts from Bruins-Fan-In-MD. Show Bruins-Fan-In-MD's posts

    How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 10:30 AM EDT

    How is this possible?  They can seat almost 5,000 more than the Bruins.  This is baffling to me:

    Blackhawks chairman Rocky Wirtz confirmed Friday that the family-owned team lost money last season, despite selling out every home game at the 20,500-seat United Center. He doesn't expect the team be profitable for "four or five years."

    "Just because you fill the place up and win the Stanley Cup doesn't mean you're in the black," Wirtz said. "But the nice thing is we have light at the end of the tunnel and we're going to be there."

    The Blackhawks plan to increase ticket prices an average of 20 percent, team officials confirmed.

     

  2. You have chosen to ignore posts from rolerhoky19. Show rolerhoky19's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 10:43 AM EDT

    In Response to How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    How is this possible?  They can seat almost 5,000 more than the Bruins.  This is baffling to me: Blackhawks chairman Rocky Wirtz confirmed Friday that the family-owned team lost money last season, despite selling out every home game at the 20,500-seat United Center. He doesn't expect the team be profitable for "four or five years." "Just because you fill the place up and win the Stanley Cup doesn't mean you're in the black," Wirtz said. "But the nice thing is we have light at the end of the tunnel and we're going to be there." The Blackhawks plan to increase ticket prices an average of 20 percent, team officials confirmed. Read more: http://sportsillustrated.cnn.com/2010/hockey/nhl/07/31/blackhawks.convention.ap/index.html#ixzz0vTEO1iHb
    Posted by Bruins-Fan-In-MD



    I would say when Drewski sees this (he is an accountant or in finance not sure which) he can provide a better answer. But one quick point, report a loss doesn't have to mean the team is losing money.  It means they are able to show expenses and operational cost were more then money that was brought in.  Keep in mind though teams can "depreciate" property etc, which really do not actively effect profit, but this is something you do for tax purposes. If you travel for work you can depreciate the value of your car, this doesn't actually cost you out of pocket, but will show up as a loss for accounting purposes.  The just bought out? 60? maybe more stanley cup rings at 25-50k each, as well as another handfull of less expensive rings that are given to lower tier staff, etc..

    With out seeing there budget its all speculation but they do play in one of the older stadiums, One of the biggest revenue generators are luxury boxes, as well as coorporate sponsorship.  And with the CBA many items are actually shared as "league wide" revenue items. The penguins see no money from the sale of crosby jerseys for instance, the players (league wide) see it as part of the collective revenue.
     

  3. You have chosen to ignore posts from OlsonicCreations. Show OlsonicCreations's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 10:45 AM EDT

    I'm shocked by this. It's hard to believe.

    Could he be lying in order to justify the ticket hike?
     

  4. You have chosen to ignore posts from SanDogBrewin. Show SanDogBrewin's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 10:55 AM EDT

    How has the Wirtz family run the Blackhawks in the past ? Why should anything change. I could see a lie perpetrated by Rocky Wirtz as suggested. How do you not get an original six team right with that fan base ? Terrible management
     

  5. You have chosen to ignore posts from duinne. Show duinne's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 10:59 AM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    I'm shocked by this. It's hard to believe. Could he be lying in order to justify the ticket hike?
    Posted by OlsonicCreations


    It's true. The Blackhawks had to borrow money from Wirtz Corp. several times this past year to pay their bills.

    The reasons why the Hawks are in the red are myriad, but they can be traced back to one source: Bill Wirtz. Bruins fans who think Jeremy Jacobs is cheap have no idea. Wirtz, among other things, refused to allow the Hawks to be shown on local TV for years, believing that people wouldn't buy tickets to see the games if they could watch them on TV. Seriously.

    Once Wirtz died and his son took over, things began to change in Chicago, but the changes were expensive. They renovated parts of the arena, hired better front office staff and business staff. They spend to the cap (actually they're way over right now), so player salaries increased.

    Unfortunately, revenue sharing in hockey doesn't help the Hawks, because they're a big-market team, and revenue sharing helps the smaller markets.

    For more details, here's a fascinating story about the Blackhawks' financial woes:

    http://www.bellinghamherald.com/2010/07/31/1550941/blackhawks-have-stanley-cup-and.html

     

  6. You have chosen to ignore posts from rolerhoky19. Show rolerhoky19's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:12 AM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : It's true. The Blackhawks had to borrow money from Wirtz Corp. several times this past year to pay their bills. The reasons why the Hawks are in the red are myriad, but they can be traced back to one source: Bill Wirtz. Bruins fans who think Jeremy Jacobs is cheap have no idea. Wirtz, among other things, refused to allow the Hawks to be shown on local TV for years, believing that people wouldn't buy tickets to see the games if they could watch them on TV. Seriously. Once Wirtz died and his son took over, things began to change in Chicago, but the changes were expensive. They renovated parts of the arena, hired better front office staff and business staff. They spend to the cap (actually they're way over right now), so player salaries increased. Unfortunately, revenue sharing in hockey doesn't help the Hawks, because they're a big-market team, and revenue sharing helps the smaller markets. For more details, here's a fascinating story about the Blackhawks' financial woes: http://www.bellinghamherald.com/2010/07/31/1550941/blackhawks-have-stanley-cup-and.html
    Posted by duinne


    Nice find, but to be fair, its not a "lie" its good business, the hawks are "losing" money while paying for services provided by other of wirtz's owned corporations.. They pay rent to a company he owns as well as having liquir contracts with another company he owns..

    In the end, the less profits you can show the better..
     

  7. You have chosen to ignore posts from Wheatskins. Show Wheatskins's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:26 AM EDT

    In Response to How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:

    The Blackhawks plan to increase ticket prices an average of 20 percent, team officials confirmed.
    Posted by Bruins-Fan-In-MD


    And this to see half the team that won the Cup.

    Can you imagine paying 20% more to see the Bruins without...Lucic, Bergeron, Stuart, Rask, Wheeler, Ryder and Boychuk?
     

  8. You have chosen to ignore posts from Raskman. Show Raskman's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:29 AM EDT

    Reports are they are walking away from Niemi for Turco that is about a million cheaper.  I'd say they're watching their pennies.

     

  9. You have chosen to ignore posts from duinne. Show duinne's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:30 AM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : Nice find, but to be fair, its not a "lie" its good business, the hawks are "losing" money while paying for services provided by other of wirtz's owned corporations.. They pay rent to a company he owns as well as having liquir contracts with another company he owns.. In the end, the less profits you can show the better..
    Posted by rolerhoky19


    Still, though, it's understandable that they'd want the Hawks to stand on their own. Propping up one business through another is never an ideal situation.

    The absense of TV revenue for all those years really put them behind the 8-ball. If they could put together a NESN-like situation that would help a lot. Not to mention if the NHL could get a real TV deal instead of the piddling one they have with Versus. That's where the real money is (see the NBA and NFL). 

     
     

  10. You have chosen to ignore posts from duinne. Show duinne's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:37 AM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    Reports are they are walking away from Niemi for Turco that is about a million cheaper.  I'd say they're watching their pennies.
    Posted by Raskman


    That's a salary cap problem, though, which is a separate issue. The Hawks will spend to the cap. The problem is - and the reason why they've had this huge fire sale this summer - is that they are HUGELY over the cap. They were over the cap with something like 14 players! 
     
     

  11. You have chosen to ignore posts from rolerhoky19. Show rolerhoky19's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:39 AM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : That's a salary cap problem, though, which is a separate issue. The Hawks will spend to the cap. The problem is - and the reason why they've had this huge fire sale this summer - is that they are HUGELY over the cap. They were over the cap with something like 14 players!   
    Posted by duinne


    Niemi's deal came in to high, he is free to negotiate with anyone now, (including the hawks still) I would doubt he gets that 2.75m price tag anywhere.
     

  12. You have chosen to ignore posts from NorthernBrewin. Show NorthernBrewin's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:42 AM EDT

    In Response to How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    How is this possible?  They can seat almost 5,000 more than the Bruins.  This is baffling to me: Blackhawks chairman Rocky Wirtz confirmed Friday that the family-owned team lost money last season, despite selling out every home game at the 20,500-seat United Center. He doesn't expect the team be profitable for "four or five years." "Just because you fill the place up and win the Stanley Cup doesn't mean you're in the black," Wirtz said. "But the nice thing is we have light at the end of the tunnel and we're going to be there." The Blackhawks plan to increase ticket prices an average of 20 percent, team officials confirmed. Read more: http://sportsillustrated.cnn.com/2010/hockey/nhl/07/31/blackhawks.convention.ap/index.html#ixzz0vTEO1iHb
    Posted by Bruins-Fan-In-MD


    Stranger things can happen.

    Toronto pukes it year after year, yet is the most profitable franchise in the NHL.

     

  13. You have chosen to ignore posts from Wheatskins. Show Wheatskins's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 12:46 PM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:


    Toronto pukes it year after year, yet is the most profitable franchise in the NHL.
    Posted by NorthernBrewin


    Not the same at all. As someone who grew up and still resides in Leaf nation, but has never been a Leaf fan, I can tell you that Leaf fans have become accustomed to pain and suffering.

    That is why they have parades after two game winning streaks. These parades are respites that relieves their suffering, but intensifies when the losing starts again.

    Leaf fans wear their pain and suffering like a badge of honour. And boy do they spend to show evidence of it. They will buy anything with a Maple Leaf logo on it, especially tickets to games.
     

  14. You have chosen to ignore posts from BadHabitude. Show BadHabitude's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 12:49 PM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : Stranger things can happen. Toronto pukes it year after year, yet is the most profitable franchise in the NHL.
    Posted by NorthernBrewin


    Ding!  ding! ding!  NorthernBrewin hits it!

    NOT STRANGE!!

    Why?  Ask why?

    Because that $%^& Wirtz and the idiots like him were not hockey people, but ran hockey like the circus or whatever other act that came into their building.

    HAD THEY GROWN HOCKEY IN ILLINOIS LIKE THEY SHOULD HAVE, THEY WOULD BE ONE OF THE MOST PROFITABLE TEAMS IN THE NHL.

    This subject really hits home for me, really ticks me off.  Chicago winters are colder than here and how many NHLers has IL produced?  A handful.  Right across the lake they are churning out pro hockey players by the bushel.  A few miles away - nada.

    Had Wirtz broadcast home games and encouraged local hockey, they would have had sellouts all the way along just like the Leafs do.  Look at a place that turns out hockey players in the US, Boston, Detroit, Minn and look at the revenues of their teams.

    Jokers like Wirtz and Jacobs and now Bettman are ruining hockey by running it like a sport that people watch - but don't do.  Grow it at the grass roots, think long term business plan and not short term immediate profit and nurture the sport and it will grow.  Your sunbelt teams should grow naturally, and if they did they would be more profitable.  Tampa is doing that, more rinks are being built now, and they will probably do well long term because once you get them playing, they will start watching.

    OK, they won't be able to get away with what the Leafs get away with, but I believe that if they have the grass roots long term it's better for the health of hockey and then the NHL.

    Look at baseball, the slowest most boring sport on earth and look at what they make.

    Golf?  golf?  Are you kidding?  Watching golf on tv is like watching pain dry.

    And although I like soccer, is it as exciting as hockey?  not even close, but why so popular?  Because so many people play.
     

  15. You have chosen to ignore posts from Drewski5. Show Drewski5's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 1:09 PM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : Still, though, it's understandable that they'd want the Hawks to stand on their own. Propping up one business through another is never an ideal situation. The absense of TV revenue for all those years really put them behind the 8-ball. If they could put together a NESN-like situation that would help a lot. Not to mention if the NHL could get a real TV deal instead of the piddling one they have with Versus. That's where the real money is (see the NBA and NFL).   
    Posted by duinne


    Case-in-point , the AOL / Time Warner merger.  Another good example, GE losing money on NBC for years.

    While its not a "bad idea", the advantages of cross-promoting are usually overstated.  This could cause an investor to over-value, and therefore over-pay.
     

  16. You have chosen to ignore posts from Drewski5. Show Drewski5's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 1:44 PM EDT

    Roller , you are absolutely correct.  Just because they reported a loss does not mean they are not profitable.  Because they are a privately held company (as opposed to a publically traded corporation), they have a lot of wiggle room regarding their bookkeeping.  Also, privately held companies hire accountants who are good at making the company look less profitable (taxation purposes), as opposed to public-company accountants, who strive to make the company appear more profitable (to attract stockholders).  Because they have a lot of wiggle room (re: bookkeeping) and because their goal is to make the company look less profitable,  showing a net-loss (which their parent company can use to off-set profits for their sister companies), may just mean the accountants are doing their job.

    I'd have to add-back the money spent on investments (depreciation, interest expense primarily) to their net loss and then look at this modified figure.

    I'd have to see the cash-flow statement before I'd start making hard convictions off their profil&loss statement.
     

  17. You have chosen to ignore posts from Raskman. Show Raskman's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 4:02 PM EDT

    I think the one point that most are missing is that NHL's teams books aren't easily cooked due to the salary cap and profit sharing.  Revenue is completely transparent because the cap is directly linked to it.  You just can't hide income. 
     

  18. You have chosen to ignore posts from rolerhoky19. Show rolerhoky19's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 4:26 PM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    I think the one point that most are missing is that NHL's teams books aren't easily cooked due to the salary cap and profit sharing.  Revenue is completely transparent because the cap is directly linked to it.  You just can't hide income. 
    Posted by Raskman


    Raskman,
    way off..

    Revenue and profit are 2 completely different things..Revenue is reported for the cba, team expenses are competely independent, individual team profit is a concern of the owner, not the league in most respects.

    Similarly, as I was stating their parent company owns their building and can charge above average rent to themselves to show a loss, they could charge above average cost for the liquor they are selling from the parent company to themselves.

    Not saying they necessarily are, but numbers are easy to skew and manipulate if you know how.
     

  19. You have chosen to ignore posts from TommyD603. Show TommyD603's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 5:08 PM EDT

    Also, all those front-loaded contracts that keep the cap numbers down. Hossa's cap number may be low, but he's still making big dough right now, and you've got a TON of those guys on the Hawks
     

  20. You have chosen to ignore posts from Raskman. Show Raskman's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 5:33 PM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : Raskman, way off.. Revenue and profit are 2 completely different things..Revenue is reported for the cba, team expenses are competely independent, individual team profit is a concern of the owner, not the league in most respects. Similarly, as I was stating their parent company owns their building and can charge above average rent to themselves to show a loss, they could charge above average cost for the liquor they are selling from the parent company to themselves. Not saying they necessarily are, but numbers are easy to skew and manipulate if you know how.
    Posted by rolerhoky19


    I believe with one half of the ledger completely tranparent and other half used in comparisons around the league that it would be extremely difficult for NHL teams to cook their books.  Not impossible, but difficult.  I do like the theory that front loaded contracts could contribute because the cap ceiling was based on a number that would keep the league profitable.  By teams getting around it you can see how teams could get in the red pretty easily.
     

  21. You have chosen to ignore posts from Wheatskins. Show Wheatskins's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/2/2010 11:27 PM EDT

    Speaking as an Accountant, I can tell you that since the Boston Bruins are a subsidary of Delaware North, which is a privately held company, the books can be cooked to any flavour Jeremy Jacobs wants.
     

  22. You have chosen to ignore posts from Drewski5. Show Drewski5's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/3/2010 10:10 AM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : I believe with one half of the ledger completely tranparent and other half used in comparisons around the league that it would be extremely difficult for NHL teams to cook their books.  Not impossible, but difficult.  I do like the theory that front loaded contracts could contribute because the cap ceiling was based on a number that would keep the league profitable.  By teams getting around it you can see how teams could get in the red pretty easily.
    Posted by Raskman


    You cant really compare expenditures from team to team.  This could have been as simple as they paid off the balance on a fixed asset, and booked all of the interest expense this year (as opposed to capitalizing it).  You have to take a look at more than just the P&L statement to get a good snapshot of profitability.  Without the balance sheet, and cash flow statements, the P&L can be extremely misleading.
     

  23. You have chosen to ignore posts from rolerhoky19. Show rolerhoky19's posts

    Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?

    posted at 8/3/2010 3:36 PM EDT

    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss?:
    In Response to Re: How do the Blackhawks sell out every seat (20,500), win the Cup, and still report a loss? : I believe with one half of the ledger completely tranparent and other half used in comparisons around the league that it would be extremely difficult for NHL teams to cook their books.  Not impossible, but difficult.  I do like the theory that front loaded contracts could contribute because the cap ceiling was based on a number that would keep the league profitable.  By teams getting around it you can see how teams could get in the red pretty easily.
    Posted by Raskman


    Cap numbers not based on keeping the league profitable, its based on what percentage of the revenue should go to the players.. Once you set a ceiling (no team will spend above x) the players and their union kicks back then that no team will spend below y..

    The cap helps control spending, but the league could be a "non for profit" and still generate millions in revenue..