Leafs, Rangers are NHL's most valuable teams
There is parity on the ice in hockey. Since a lockout canceled the National Hockey League's 2004-'05 season and ushered in the salary cap era, a different team has won the Stanley Cup every year. Two big-market teams (Anaheim Ducks, Chicago Blackhawks), one mid-market team (Detroit Red Wings) and two small-market teams (Carolina Hurricanes, Pittsburgh Penguins) have won the championship. You can root for hockey almost anywhere in the U.S. and Canada and have a shot at seeing a local team capture the Cup.
But when it comes to the P&L statement, the NHL has become a two-tiered league. During the 2009-'10 season the 30 teams combined to generate $160 million of operating income (earnings before interest, taxes, depreciation and amortization) on revenue (net of proceeds required for arena debt) of $2.9 billion. But seven teams (the Toronto Maple Leafs, New York Rangers, Montreal Canadiens, Red Wings, Philadelphia Flyers, Black Hawks and Vancouver Canucks) combined to earn $241 million, with none making less than $13 million. Meanwhile, 16 teams were in the red, with the six biggest money-losers (Phoenix Coyotes, Florida Panthers, Washington Capitals, Atlanta Thrashers, Buffalo Sabres and Tampa Bay Lightning) dropping an aggregate of $63 million.
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The big disparity in profit can almost always be explained by local television rights and arena economics. The Maple Leafs, Canadiens and Rangers each generate more than $25 million a year from their cable rights fees and more than $40 million from premium seating (luxury suites and club seats). In contrast, the Coyotes, Lightning and Thrashers each pull in less than $10 million from local television and under $15 million from premium seating.
The gap in profits has greatly affected team values. The average NHL team is worth $228 million, 2.2 percent more than a year ago. (Note: Our valuations are enterprise values based on a team's current television and arena situations, and include the revenue team owners get from all events at their buildings, but not the value of the real estate). But there is a big difference among the 30 teams. For example, the Molson family led an investor group that purchased the Canadiens for $575 million last November, while Jeffrey Vinik bought the Lightning for just $93 million in March. Forbes values six teams (Maple Leafs, Rangers, Canadiens, Red Wings, Philadelphia Flyers and Boston Bruins) in excess of $300 million and four teams (Nashville Predators, Lightning, Thrashers and Coyotes) at less than $150 million.
The value of two money-losing teams did rise thanks to improved financial prospects. Capitals owner Ted Leonsis purchased the 56 percent of Washington Sports and Entertainment that he didn't already own this spring from the Pollin family. The main assets of Washington Sports were the NBA's Washington Wizards, Verizon Center (home to the Caps and Wizards) and a local Ticketmaster outlet. With these assets and revenue streams under one umbrella, Leonsis expects the new entity to be profitable in 2010-'11. The value of the Capitals is up 7 percent to $197 million.
The Panthers have been losers on and off the ice most years since joining the NHL as an expansion team in 1993. Cliff Viner bought control of the Florida Panthers in November and has installed a three-year plan to turn around the money-losing team, which has not made the playoffs since the 1999-2000 season. Viner has pushed hard on new marketing initiatives and secured 10,000 full season tickets for the 2010-'11 season. The team had a record-breaking off-season with sponsorships, adding 25 new partners, including Humana, Isle Casino and Pep Boys and did major renewals with ADT, Ford Motor and Patron. The value of the team increased 6 percent to $168 million.
Several teams are looking for investors. Among them: the Coyotes (still owned by the NHL after the league bought the bankrupt team in 2009), Hurricanes, Predators, Thrashers, St. Louis Blues, Dallas Stars and Los Angeles Kings. Bankers say that, of these teams, only the Stars and Kings will likely fetch more than $200 million.
But there are at least a half-dozen teams that have a decent shot at winning the Stanley Cup.
The top five:
1: Toronto Maple Leafs
2. New York Rangers
3. Montreal Canadiens
4. Detroit Red Wings
5. Boston Bruins
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