Wednesday, May 30, 2007

A Tale of Two Businessmen

The playing field?....the National Hockey League

The principals?...Tom Golisano, owner of the Buffalo Sabres, and Ted Leonsis, owner of the Washington Capitals.

Resolved, "Is the National Hockey League Healthy, or Is It Not?'"

First, Mr. Leonsis . . .

"The NHL grew its revenues again -- two years in a row -- post the lockout . . . Due to the increase in revenues in the league this year, the salary cap will most likely go up so the players will be happier as they share in the growth of additional revenues. Franchise values are up if Nashville (the lowest grossing team in the league) sells for $220 million. That sets a floor on franchise values, doesn't it? We paid $85 million for the Washington Capitals as a point of perspective. New, smart people want to come into the league and banks are interested in financing new owners so the league must be healthy."

Mr. Golisano (as reported by Tim Graham of the Buffalo News), your rebuttal?

“Would it be considered a success when you have a team that sells out every game and sells out all the suites but would lose money unless they were in the playoffs? That’s a thing an organization like the Buffalo Sabres must be aware of. If they move the salary cap up and we go with it, there’s a good possibility we would lose money unless we reached the second round of the playoffs. That’s an unhealthy situation.”

Are there two National Hockey Leagues out there? The Peerless knows there are not, and there might be extenuating factors in at least one of these arguments (in the case of Mr. Golisano's, a negotiating "shot-across-the-bow" to poor mouth his team's finances in advance of negotations on new contracts with Daniel Briere and Chris Drury, both unrestricted free agents). But it is interesting to ponder the seeming contracdictions in these arguments, especially since one must presume that the Buffalo owner -- who sold out his arena for the season, by the way -- is one of those new, smart people who wanted to come into the league.

1 comment:

Hooks Orpik said...

One number: 0.72

That sounds like a blood alcohol rating of a Hollywood star at the time of a DUI, right?

No, sadly it's Versus rating for Game 1 of the Stanley Cup final.

Sure the markets aren't great for television and Versus is 'only' in 70 million homes but if the sport was that healthy, me thinks more than 523,000 Americans would be tuning in for one of the best and most important games in recent times.

The increase in league revenues is pretty much the same small but rabid fanbase that's paying more for tickets. That's the primary growth. It's getting too much, look at the $100+ tickets for upperbowl seats for playoffs in Detroit, producing unheard of non-sellouts for them.

Those that are fans are there. But there's virtually no such thing as a casual sports fan that likes/wants to watch hockey, especially with it being off of ESPN (largely the sport fans consciousness in America).

But hey, watch the owners fall over themselves to pay ridiculous amounts for free agents (Buffalo 3 years $10 million for Jaro Spacek, anyone?)