Wednesday, August 01, 2007

Dazed and Confused

Taken from MC79's blog (link to the right), copyright Edmonton Journal

This written prior to the 2005-2006 NHL season
Nichols acknowledged that revenues league-wide are projected to fall to $1.74 billion from $2.1 billion US in 2003-04. He reckoned the Oilers, who pulled in about $85 million Cdn in gross revenues the last NHL season, will derive something closer to $70 million in 2005-06.

Some sponsors have fallen away, or committed funds elsewhere, at least for this year, Nichols explained. And the small-market equalization fund that delivered about $2.5 million to the Oilers most years does not exist under the new CBA.

- The Oilers payroll was up from 2003-2004 season. We're down 2.5M from NHL equalization funds, and down revenue from the Heritage classic (although that was likely made up from higher ticket prices). Unless individual sponsors lost were paying the Oilers in 8 figures, I'm lost on how the Oilers were potentially making 10-15M less in gross revenues.
-Today, Sponsorship revenue is likely at franchise high levels.
- How did the Oilers manage to still break-even in the 2005-2006 regular season with potentially up to 15M less in revenue?
- Does this suggest the Oilers were a money making machine in 2003-2004, with potentially 15M more in gross revenues?
- If the Oilers were putting in 85M in revenues in 2003-2004, what does that suggest for the 2006-2007 season, factoring in the Significant Canadian dollar appreciation, 21.6% increase in ticket prices, increases in luxury box prices, general advertising revenue, etc.
- Mind you, some costs would also go up - although fair to say revenues grew faster than expenses.
- Patrick Laforge's ''a 39M cap would mean the world to us'' cry back in January in addition to Lowe's concern on 630 CHED of the rising cap is IMO, adhering to the rule of, ''Do not bite the hand the feeds you.''

The Oilers finances, from time to time, are published in the local dailies. There is too much contradiction, but it would seem to me the Oilers are profitable venture to the EIG, whom have shown (based on logical assumptions) up until this summer, more interested in pocketing profits rather than winning hockey games.

Daryl Katz has done the city of Edmonton good without even (thus far) purchasing the team. His offer and press release filled with strong commitments , the EIG can no longer hide behind the small-market, revenue strapped, hockey club label.

It will be an exciting day on August 7, the day the EIG votes on whether they will sell the team to Katz. This Oilogosphere blogger is one of those voices that is hoping for a change.

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