Doesntmakesense Posted July 2, 2019 Share Posted July 2, 2019 I am a marketing student going for my MBA and we were given an assignment to break down the balance sheet of the Vancouver Canucks (as an estimate). So far I have the following research and numbers confirmed: Home Games : 41 (average ticket price $125) (average attendance 17,125) Home Game Revenue Expected: 41 x 17,125 x $125= $87,765,625 TV/Radio Revenue (Canucks Share): $11,000,000 Canucks Merchandise Sales: $9,000,000 Arena Food/Drinks team share: $14,000,000 Team Promotions/Extra Revenue: $7,000,000 Total Revenue: $128, 765, 625 Now for the expenses: Team Payroll: $81, 500,000 Arena Maintenance: Arena Workers Salaries: Flights: Hotels: Food: Medical/Insurance: Team Office Salaries: Canucks Marketing Materials/Ads: Cost of Food/Cost of Goods: I am very confused how owners find extra income to pay millions to their coaches, like Bab in Toronto. It was much better for the owners to pay $1 mill or less for coaches, there is no reason why coaches salaries are going up. The coaches salary is a direct hit on the owners wallet, it is dumb to accept $6 million throwing away for a coach when you are getting nothing back for it. And this is just the start of the expense of a hockey team, what about the first class air travel, premium hotels etc? Can this be reduced to regular air travel, reduction on hotels, food vouchers etc? I plan to be a hockey team owner my self one day, at 35 though I am struggling to understand how to afford all of the expenses above without significantly cutting costs along the way as a potential future owner. Thoughts are welcomed. Link to comment Share on other sites More sharing options...
Nuxfanabroad Posted July 2, 2019 Share Posted July 2, 2019 Start up a new league in Canada, please. Go to war w/Bettman. We're all behind you! 2 2 Link to comment Share on other sites More sharing options...
iceman64 Posted July 2, 2019 Share Posted July 2, 2019 Most of the expenses you mentioned are simple costs of doing business, i.e. write off's at tax time. Hotels, meals, flights, etc etc... Link to comment Share on other sites More sharing options...
iceman64 Posted July 2, 2019 Share Posted July 2, 2019 Just now, Nuxfanabroad said: Start up a new league in Canada, please. Go to war w/Bettman. We're all behind you! The reaction to Bettman at the draft was f'n priceless! 1 Link to comment Share on other sites More sharing options...
DarthMelvin Posted July 2, 2019 Share Posted July 2, 2019 Beer... Link to comment Share on other sites More sharing options...
Dekey Pete Posted July 2, 2019 Share Posted July 2, 2019 Aren't player salaries paid in USD? Since your ticket revenue is $125 avg (in CAD I assume) you need to convert the salaries to CAD as well. That chops into your other expenses even more than you had originally anticipated. I don't think most people invest in sports teams to make a profit. I'd be willing to bet it's more about the prestige of owning your own team, the contacts you make and how it affects your other business ventures. 2 Link to comment Share on other sites More sharing options...
-AJ- Posted July 2, 2019 Share Posted July 2, 2019 Two thoughts: 1. It looks like you're estimating an income statement instead of a balance sheet. 2. I'd guess that there's a substantial amount of income from promotions with Rogers and other big corporations. Recall that the Canucks named their entire arena after Rogers and how much Rogers must be paying them for that. 1 Link to comment Share on other sites More sharing options...
Dekey Pete Posted July 2, 2019 Share Posted July 2, 2019 Also that's just the CAP HIT, not actual salaries paid in $. I suppose it works for a simplified analysis though. Link to comment Share on other sites More sharing options...
BCNeil Posted July 2, 2019 Share Posted July 2, 2019 I think your average ticket price is high. $125 is like $165 canadian. Link to comment Share on other sites More sharing options...
-AJ- Posted July 2, 2019 Share Posted July 2, 2019 4 minutes ago, The Sedge said: Aren't player salaries paid in USD? Since your ticket revenue is $125 avg (in CAD I assume) you need to convert the salaries to CAD as well. That chops into your other expenses even more than you had originally anticipated. I don't think most people invest in sports teams to make a profit. I'd be willing to bet it's more about the prestige of owning your own team, the contacts you make and how it affects your other business ventures. Good points. I also wouldn't be surprised if the Canucks have invested in forward or future contracts to mitigate the effects of exchange rates. They might also have non-cash things like amortization hitting their books and lowering their taxes. In the end, things like paying staff boil more down to cash flow than income, since the cold hard cash is what has to hit the bank accounts of employees. Link to comment Share on other sites More sharing options...
Rick Blight Posted July 2, 2019 Share Posted July 2, 2019 Playoff revenue - be sure to subtract 35% for league revenue sharing Impact of overall league revenue sharing Property tax Business tax Training camp/ development camp expenses Exhibition game expenses revenue Farm team impact Suggest you familiarize yourself with pages 389 - 398 of the CBA that covers: HOCKEY RELATED REVENUES REPORTING PACKAGE 20XX-XX LEAGUE YEAR Link to comment Share on other sites More sharing options...
joe-max Posted July 2, 2019 Share Posted July 2, 2019 Do not underestimate energy and maintenance costs. I know of really small venues with one rink and nothing else really, and just running them costs between 500,000 and one million per year. Link to comment Share on other sites More sharing options...
Lancaster Posted July 2, 2019 Share Posted July 2, 2019 There are also some expenses/supplies that are used in NHL games but also used for other events. Probably some bulk discounts for food supply as concessions are served in both NHL games, fairs, concerts, etc. Link to comment Share on other sites More sharing options...
Tre Mac Posted July 2, 2019 Share Posted July 2, 2019 Don't forget that fat cheque the Canucks write to the sunbelt teams every year lol. 1 1 Link to comment Share on other sites More sharing options...
Alflives Posted July 2, 2019 Share Posted July 2, 2019 Just now, Tre Mac said: Don't forget that fat cheque the Canucks write to the sunbelt teams every year lol. I found it ironic (but fun still the same) the Leafs gave the Canes a first round pick so the Canes could use the Leaf’s equalization money to buy out Marleau. 1 Link to comment Share on other sites More sharing options...
Nuck1991 Posted July 2, 2019 Share Posted July 2, 2019 also dont forget to add erikssons 6m for another 3 years. Link to comment Share on other sites More sharing options...
Nucksfollower1983 Posted July 2, 2019 Share Posted July 2, 2019 (edited) 1 hour ago, Nuck1991 said: also dont forget to add erikssons 6m for another 3 years. that would be included in the team payroll portion of the expenses break down. no one likes Eriksson's contract but seriously man grow the f up. Edited July 2, 2019 by Nucksfollower1983 1 Link to comment Share on other sites More sharing options...
Chris12345 Posted July 2, 2019 Share Posted July 2, 2019 2 hours ago, -AJ- said: Two thoughts: 1. It looks like you're estimating an income statement instead of a balance sheet. 2. I'd guess that there's a substantial amount of income from promotions with Rogers and other big corporations. Recall that the Canucks named their entire arena after Rogers and how much Rogers must be paying them for that. Well put. Not to get technical but the value is on the balance sheet. The income statement is bad. Canadian revenue against US expenses in an unpredictable business. You want to own the rink and the land around it aka condos and concerts just like the Canucks. Other than the fan aspect, I would assume that's why the they own them. Link to comment Share on other sites More sharing options...
the grinder Posted July 2, 2019 Share Posted July 2, 2019 get your self a blue berry farm.. break labour laws , hire cheap labour to build you a empire of crappy over priced condos and then own a team badda bing 1 Link to comment Share on other sites More sharing options...
Arrow 1983 Posted July 2, 2019 Share Posted July 2, 2019 2 hours ago, Doesntmakesense said: I am a marketing student going for my MBA and we were given an assignment to break down the balance sheet of the Vancouver Canucks (as an estimate). So far I have the following research and numbers confirmed: Home Games : 41 (average ticket price $125) (average attendance 17,125) Home Game Revenue Expected: 41 x 17,125 x $125= $87,765,625 TV/Radio Revenue (Canucks Share): $11,000,000 Canucks Merchandise Sales: $9,000,000 Arena Food/Drinks team share: $14,000,000 Team Promotions/Extra Revenue: $7,000,000 Total Revenue: $128, 765, 625 Now for the expenses: Team Payroll: $81, 500,000 Arena Maintenance: Arena Workers Salaries: Flights: Hotels: Food: Medical/Insurance: Team Office Salaries: Canucks Marketing Materials/Ads: Cost of Food/Cost of Goods: I am very confused how owners find extra income to pay millions to their coaches, like Bab in Toronto. It was much better for the owners to pay $1 mill or less for coaches, there is no reason why coaches salaries are going up. The coaches salary is a direct hit on the owners wallet, it is dumb to accept $6 million throwing away for a coach when you are getting nothing back for it. And this is just the start of the expense of a hockey team, what about the first class air travel, premium hotels etc? Can this be reduced to regular air travel, reduction on hotels, food vouchers etc? I plan to be a hockey team owner my self one day, at 35 though I am struggling to understand how to afford all of the expenses above without significantly cutting costs along the way as a potential future owner. Thoughts are welcomed. LOL total revenue $128 mill more like $250mill plus Profits between $10-15 mill this is probably low 10%-15% non playoffs playoffs $20-$50mill plus, full cup run probably closer to $100mill. And then there is all the other events. Canucks memberships Licenses Trademarks The list would go on and on for revenues either direct or indirect. 1 Link to comment Share on other sites More sharing options...
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