July 30, 2010
It's been a good time to be a Chicago Blackhawks fan. The renaissance of the franchise culminated in a Stanley Cup championship in June and despite being cap-strapped and having to say goodbye to some beloved players, there's still a good core on the roster for fans to expect Chicago to compete over the next several years.
Even with all the success on the ice and in the community, the business side of the Blackhawks is still slowly, make that very slowly, rebounding from the disastrous days of "Dollar" Bill Wirtz.
Melissa Harris of the Chicago Tribune has a fascinating read Friday about the business side of the Blackhawks. In the article, she details how ticket prices will jump 20 percent next season and move Chicago from second-cheapest in the NHL to top 10 most expensive. She also points out how a Stanley Cup, a sold out United Center and a fan base eating up as much Blackhawks merchandise as possible still hasn't stopped the franchise from losing money.
In fact, the Blackhawks ran out of cash last season. Several times.
"In a follow-up interview this week, Wirtz said that the Blackhawks ran out of cash several times last season. Each time, he received a memo, known as an internal capital call, in which the team requested money from Wirtz Corp., the Blackhawks' parent company, to cover operating expenses. And at the end of the season, Wirtz said he double-checked that the playoffs did not cover those losses; the franchise remained in the red, the team's accountant told him.
"We have multiple businesses and obviously we want every one to stand on its own," Wirtz said. "And what you don't want to do is manage one business from the profit of the other one."
But Wirtz pledged he would never revert to the penny-pinching ways of his father."
There's definitely no penny-pinching going on. Among those set to receive Stanley Cup rings next season include the team's interns. Expect to see some on eBay to help pay off college loans this fall.
The hole that Chicago was in before Bill Wirtz passed away in 2007 was deep. Wirtz told the Toronto Star that between 1997 and 2007 he lost $191 million, and $31 million during the 2006-07 season. Guess that idea of "not putting games on television" plan wasn't such a good one after all.
Even with two straight playoff runs, the revenue generated still wasn't enough and the Blackhawks continued losing money, but according to Rocky Wirtz, it's getting less and less. A Stanley Cup championship and the monstrous revenue that it brings in certainly helps put a small dent in their losses.
Revenue sharing is something that's hurt the Blackhawks. As Harris notes, regular season ticket revenue is Chicago's to keep, but for playoff games, the team has to give the NHL at least 50 percent of what a regular-season sellout would bring in, thus the need to raise prices come April.
Because the Blackhawks are privately owned, financial records cannot be accessed so it's unknown exactly how much the losses were, but Wirtz told Harris with the success of the team now, getting out of the red and into the black is a goal that can be reached and the franchise is closer to getting it's head above water.