Forbes Magazine’s annual NHL team valuations have been published and the Canadiens are listed as the league’s third most valuable franchise, worth $445 million US, up from their 2010 value of $408 million.
As was the case last year, the Habs are third in the league behind the Maple Leafs ($521 million) and the Rangers ($507 million).
Forbes adds that the team’s annual revenue was $165 million, up $2 million from last year. They had an operating income (earnings before interest, taxes, depreciation and amortization) of $47.7 million, which is down from $53.1 million the previous year, perhaps due in part to the shorter playoff run in 2010 than 2009, but largely to the escalation in salaries they paid. The player costs for this year’s study are $64 million, for last year they were $55 million. (Neither of those figures matches what some of the websites that track player salaries list as the Habs’ payroll, for some reason).
Forbes’ profile of the Canadiens reads: “By selling out the Bell Centre every year since the 2004-05 lockout, the Canadiens continue to be among the most profitable teams in the NHL. Montreal earns nearly $3 million per game at the arena from tickets, suites and concessions. The Canadiens also boast a lucrative local television deal and post among the league’s highest ratings every season. The Molson family repurchased 80% of the Canadiens in 2009 from George Gillett (Molson Breweries retained 20% of the team and the Bell Centre when it sold the assets in 2001). The enterprise value of the team, arena and a concert-production business was $575 million. The Canadiens have won a record 24 Stanley Cups.”
But all is not rosy in the NHL, the magazine believes.
Higher player costs is a main point of the Forbes study of the NHL’s business. Team values are at an all-time high, writes Michael Ozanian in the main essay, $240 million, 5 percent more than last year. But player costs increased 11 percent league-wide which, he says, brings about the drop in operating income.
“Last season 18 of the league’s 30 teams lost money even before they had to pay bank loans or write down assets, compared with 16 the prior year,” he writes.
And the consequence of that could mean trouble next fall: “The league’s salary cap, set at 57 percent of revenue, is too high for some teams to be profitable,” he writes. “As a result, expect the National Hockey League to undergo a cantankerous labor negotiations when the owners and players union begin to hammer our a new collective bargaining agreement to replace the current six-year deal that expires in September. The NHL must move much closer to the 48 percent model the NFL agreed to before this season or the 50-50 revenue split National Basketball Association’s owners and players recently agreed to.”
It’s too soon to tell whether this will translate into a work stoppage next fall. These are Forbes’ figures, not the ones that will be in front of the owners and players at the bargaining table. In fact, last month Larry Brooks of the New York Post reported the NHLPA is contesting the NHL’s revenue figures.
Keep in mind the players took a 20 percent pay cut at the end of the lockout six years ago and was forced to accept the salary cap. If Forbes is right and the NHL demands another salary rollback this time, how will the players react?