Part five in my overview of the NHL’s money-losing franchises in hopes of better understanding the factors why those clubs lost money.
In my last installment, I examined the NHL clubs which frequently (three-four seasons) posted losses between 2005-06 to 2010-11. Today, I’ll look at the teams which appeared infrequently (one to two seasons) in the loss category over that period.
Between 2005-06 to 2010-11, the Pittsburgh Penguins, Philadelphia Flyers, Boston Bruins, Chicago Blackhawks, Ottawa Senators, Dallas Stars, Calgary Flames and Los Angeles Kings made brief appearances on the list of NHL money-losing teams.
It seems unusual that the Pittsburgh Penguins, only two years removed from a Stanley Cup championship, playing to full capacity during a season in which they were among the league’s top teams, would be among the money-losing franchises the two seasons following that championship, yet that was the case (-1.6 in ’09-’10, -0.2 in ’10-’11).
The following season, the Penguins moved into a larger venue (which they also sold out), were fourth overall in payroll, and while their FCI rose by 11.4 percent to $326.14 (just over the league average of $313.68), they were still 14th overall. Their losses for that season, however, declined from -1.6 to -0.2. Inability to advance deep in the playoffs in both seasons also probably played a part in those losses.
The Philadelphia Flyers (‘07-’08, ), Ottawa Senators (’08-’09 and ’09-’10), Chicago Blackhawks (’06-’07), and Boston Bruins (‘06-’07, ’07-’08) brief appearances on these lists seems linked mostly to sub-par seasons (either during the season they posted the losses, or a carry-over of poor performance the season prior), which had an effect upon the gate. As their on-ice fortunes improved, they returned among the money-makers.
The Flyers saw a dip in attendance in ’07-’08, the result of missing the playoffs the previous season. They also didn’t increase their FCI that season,and carried the second-high payroll in the league. The following season, in which they made the playoffs, increased their FCI and packed their arena, pushed them back into the black.
As for the Senators, Forbes.com described the factors behind their losses in ’08-’09:
No playoffs, a $3 million higher payroll and a falling Canadian dollar (since rebounded) caused the Sens to lose money last season for the first time since the NHL resumed in 2005 after the lockout.
They made the playoffs the following year, but as Forbes.com explained:
(T)heir average attendance still fell 3.6%, to an average of 18,269 per game. Since they do not have a lucrative local television deal the Senators cannot afford to see attendance fall. And with $130 million of debt and no NBA franchise sharing Scotiabank Place, owner Eugene Melnyk’s team must do some damage in the playoffs to make money.
The Blackhawks hit rock bottom in ’06-’07, as fans voted with their feet after years of neglect by indifferent owner William Wirtz. After Wirtz passed away, his son, Rocky, took over, and the club’s fortunes – one and off the ice – significantly improved, putting the ‘Hawks on the happy side of par ever since. As attendance rose, so too did the FCI, to where in ’10′-11, the Blackhawks led the league in attendance, whilst charging the sixth-highest FCI, a significant increase over their rate in ’07-’08.
The Bruins were a rebuilding club which missed the playoffs in ’05-’06 and ’06-’07. As a result, during the seasons they posted losses, they were also near the bottom of the league in attendance, as poor performance and the high fan cost index (FCI) drove away a large number of their followers.
For 2008-09, the Bruins were a playoff club and making money again ($11.6 million – 8th overall). They’ve remained among the money-makers ever since.
The Stars first appearance among the money-losers was due to significant changes on the ice and in the front office.
In 2005-06, the season following the lockout, the Stars – at that time still among the NHL’s elite teams – finished first in the Pacific Division and second overall in the Western Conference. As a result, they were fifth overall in operating income ($10 million).
By 2010-11, however, the Stars had missed the playoffs three consecutive seasons, the club was up for sale, a number of their best players were traded, lost to free agency or retired, and attendance plunged to 23rd overall. Payroll was also slashed as the Stars, among the highest spenders coming out of the lockout, by ’10-’11 had one of the lowest payrolls in the NHL. Their FCI, meanwhile, was the lowest in the league. Little wonder they wound up in the red that season.
Despite playing in the second-smallest hockey market during those seasons, the Flames sold out the Saddledome and were among the top ten teams in FCI both seasons, but also carried the second-highest payroll in the league in those years. In the following seasons, however, they simply increased their fan cost index (’06-’07 to ’07-’08, ’08-’09 to ’09-’10), which factored into moving them to the plus side of the ledger. Improvement in the value of the Canadian dollar from ’08-’09 to ’09-’10 was also another contributing factor.