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Dealing with Revenue Loss

from Newsday,
With a labor agreement finally in place, the NHL appears to be in an economic position to move forward. But the process will require enormous creativity and commitment on all levels, sports business experts agree. Sal Galatioto of Galatioto Sports Partners, a Manhattan-based investment bank that provides advisory services and capital to the sports industry, said the league has a far better chance of surviving. "The economic system made no sense," said Galatioto, a former sports finance executive with Lehman Brothers. "Most owners, perhaps 24 or 25, lost less money by not playing. Now you basically have cost certainty with a commonality of revenues. If revenues go up, players and owners benefit. Now if you run your business right, you can make a profit, half of the equation is fixed. The rules changes are the other part: Hockey had became soccer on ice." Galatioto expects the Canadian teams to rebound quickly, as well as teams in New York, Philadelphia and Detroit, because of a strong and loyal fan base. "But some marginal markets - Carolina, Phoenix, Florida, Atlanta - will have a tough time," he said, and suspects that franchise sales and relocations, possibly even to Canadian cities such as Hamilton, Winnipeg or Quebec, could eventually occur.


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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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