Kukla's Korner Hockey
by Paul on 11/30/11 at 04:01 PM ET
from Mike Ozanian of Forbes,
More business is boosting National Hockey League team values but climbing player costs are eroding the sport’s profitability.
The average hockey team is now worth $240 million, 5% more than last year due to a 5% increase in revenue during the 2010-11 season, to an average of $103 million per team. The sport’s popularity on television (NBC’s broadcast of the Bridgestone NHL Winter Classic was the most-viewed NHL regular season game in 36 years with an average of 4.5 million watching during prime time) and online (average monthly unique visitors to NHL.com plus all 30 NHL team Web sites has increased to a record 22 million) is up, as is the revenue from those platforms.
Sponsorship and merchandise sales have also been increasing thanks to new deals, like the one with Tim Hortons that gives the quick-service donut chain title sponsorship of the 2012 NHL All-Star Game in January, and the extremely well done reality series 24/7 Penguins/Capitals: Road to the NHL on HBO that was a big hit. And the NHL recently extended its European reach with separate regional broadcast deals for U.K./Ireland, Czech Republic, Germany and Austria, among other new territories.
But margins are getting squeezed. During the 2010-11 season the league posted operating income (earnings before interest, taxes, depreciation and amortization) of $126 million, 21% lower than the previous year. Main reason: Player costs increased 11%, to $59 million. Last season 18 of the league’s 30 teams lost money even before they had to pay bank loans or write down assets, compared with 16 the prior year.
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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.
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