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Maple Leafs, Rangers, Canadiens all billion dollar organizations according to Forbes

Jared Clinton
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Author: The Hockey News

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Maple Leafs, Rangers, Canadiens all billion dollar organizations according to Forbes

Jared Clinton
By:

American business magazine Forbes released its annual franchise value rankings, and the Toronto Maple Leafs have been joined by the New York Rangers and Montreal Canadiens as the NHL’s billion dollar organizations.

My, what a difference one year and a massive TV contract can make. In 2013, when American business magazine Forbes released their NHL franchise valuations, only one team was said to be a billion dollar organization: the Toronto Maple Leafs ($1.15 billion). That the Leafs were – and still are – the most valued team in the NHL comes to little surprise what with a fan base that continually shells out top dollar regardless of the outcome. It is hockey mecca, like it or not. But Tuesday, when Forbes released its rankings for 2014, two franchises, the Montreal Canadiens and New York Rangers, found themselves in the billion dollar club thanks in large part to a friendly bump from the NHL’s league-wide television deals plus some added money from local television contracts. Even with the bump up to the almighty billion, it’s neither the Canadiens nor Rangers that lay claim to the biggest movers on the Forbes list. Rather, that honor is bestowed upon the New York Islanders, seeing their Forbes valuation go from $195 million in 2013 to $300 million in 2014’s edition. The 54 percent increase in value is due in large part to the sale of the Isles, increased in-arena revenue, and the teams upcoming move to the Barclays Center in Brooklyn. I guess you could say things are going the right way for the Islanders lately. The average increase in value for the teams was nearly 19 percent, but the big movers, aside from the Islanders, were the aforementioned Rangers and Canadiens (29 percent), as well the Chicago Blackhawks (32), Los Angeles Kings (29), Tampa Bay Lightning (28), and St. Louis Blues (27). It’s not surprising that several teams who’ve made the biggest increases are those that have star players or have seen the most success in recent years. One of the best things about the annual rankings are the facts it brings to light about what is going on behind the scenes to make up for the increased valuation. Take, for instance, the Rangers going from $850 million to $1.1 billion. A big reason for the bump is the 12 home games during the playoffs which, according to Forbes, was worth $20 million in extra revenue for the team. You think owners care about the playoffs? Speaking of playoffs, the Rangers Stanley Cup Final opponent and eventual Cup champion Kings have earned roughly $100 million in sponsorships thanks to the two victorious seasons. And while they’re still far from Cup contenders, the Columbus Blue Jackets benefited dearly from their playoff appearance, seeing a reported 2,000-seat increase in season ticket sales from 2013-14 to 2014-15. In addition, interesting facts came to light about a few teams and the money they’re generating from television. The Blackhawks, first, and the Bruins, second, were tops in the league when it came to average local American TV audience. Add to that the fact that the Bruins own 20 percent of their network, NESN, and you’ve got a nice bump in revenue. Juxtaposed to the ‘Hawks and Bruins are the San Jose Sharks, whose local TV deal is in such bad shape that Forbes writes commissioner Gary Bettman stepped in to try to get it altered. Forbes’ valuations weren’t all good news, however, as there was one outlier among the group: the Florida Panthers. The Panthers were the only team to see a decreasing valuation, dropping by 21 percent on this year’s list. The reason for the drop, writes Forbes’ Mike Ozanian, was the mistaken sale price of the Panthers at the time the 2013 list was released. At the time, Florida was valued at $240 million, and their sale was believed to be in the neighborhood of $250 million. The good news, Ozanian writes, is that were his 2013 valuation to have been more accurate it would have resulted in a 19 percent increase in value for the Panthers. If there is any major cause for concern, it’s the NHL’s reliance on the major markets. According to Forbes’ rankings, six teams – Toronto, Montreal, Chicago, Boston, Vancouver, and the Rangers – make up for more than three quarters of the NHL’s operating income. While these numbers are far from concrete, and you need look no further than Florida’s erroneous valuation in 2013 for proof of that, they bring to light which franchises are actually doing much better, or worse, than what the product on the ice leads us to believe. And, if nothing else, it shows Mike Illitch that his $8 million purchase of the Detroit Red Wings, now valued at $570 million, is looking pretty good 32 years later.

NHL Franchise Valuations (Forbes)

Team Valuations
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Maple Leafs, Rangers, Canadiens all billion dollar organizations according to Forbes