nfreeman Posted October 30, 2008 Report Share Posted October 30, 2008 Check it out. Interesting stuff. I don't think the $8.9MM loss includes the benefit of revenue sharing, and there are probably a few other items that aren't captured, but OTOH it sure doesn't seem like the team is raking it in as some posters suspicious of Golisano have suggested. Link to comment Share on other sites More sharing options...
Two or less Posted October 30, 2008 Report Share Posted October 30, 2008 Yeah i was under the impression that we made money last year. When i read that this morning i was shocked. Link to comment Share on other sites More sharing options...
frisky Posted October 30, 2008 Report Share Posted October 30, 2008 I thought LQ said in the last PC with TG and DR, that they were breaking even. Link to comment Share on other sites More sharing options...
PASabreFan Posted October 30, 2008 Report Share Posted October 30, 2008 Check it out. Interesting stuff. I don't think the $8.9MM loss includes the benefit of revenue sharing, and there are probably a few other items that aren't captured, but OTOH it sure doesn't seem like the team is raking it in as some posters suspicious of Golisano have suggested. If you're talking about me, I never said he was raking it in now. I said when he sold the team, he would rake it in. The franchise's value has almost doubled since he bought it. I'll say it again -- when Golisano bought the team, he said he wasn't in it to make money on a yearly basis. I believe he said he wanted to approximately break even. The guy will do fine in the long run. I wish fans would stop worrying about the guy's bottom line. It is well padded. The "skinny" part of the article is a joke. The Sabres let Drury walk, huh? Link to comment Share on other sites More sharing options...
tom webster Posted October 31, 2008 Report Share Posted October 31, 2008 Yeah i was under the impression that we made money last year. When i read that this morning i was shocked. There is a huge difference between operating revenue and profit and loss. There is no doubt the team isn't taking in top end money but they have a positive cash flow and TG hasn't had to add any of his own money to make ends meet. TG has repeatedly praised LQ and DD for their work in helping the team stay in the black. DiPofi has also said that they will be close to break even ths year if they don't make the playoffs. They want us to believe that they operate close to break even and thats what they publicize. Link to comment Share on other sites More sharing options...
LabattBlue Posted October 31, 2008 Report Share Posted October 31, 2008 There is a huge difference between operating revenue and profit and loss. There is no doubt the team isn't taking in top end money but they have a positive cash flow and TG hasn't had to add any of his own money to make ends meet.TG has repeatedly praised LQ and DD for their work in helping the team stay in the black. DiPofi has also said that they will be close to break even ths year if they don't make the playoffs. They want us to believe that they operate close to break even and thats what they publicize. I'm no financial whiz, but what you say seems to make sense. There is no way Golisano is taking a 9 mil out of pocket loss. The "for sale" sign would be up faster than a blink of the eye. Link to comment Share on other sites More sharing options...
SabresFan526 Posted October 31, 2008 Report Share Posted October 31, 2008 I'm not surprised at all. You know what this tells me? It tells me that running a lean operation is not good enough to make a profit. At some point, having a good hockey team is key to making a profit. How? Because of the additional revenue a team makes from playoff gates in addition to the zero paychecks an owner makes to players as players are only paid from the start of the regular season to the end of the regular season. Most bonuses then come from the league for playoffs. So, the lesson is that to be profitable not only do you need to run a lean operation, you also must have a good team that will advance in the playoffs. This speaks even more to last offseason's front office debacle. And, I guarantee you that DR and possibly LQ used the bottom line to convince TG to invest more in the players so that they could have a good enough team to make the playoffs and be in the black instead of what happened last year. For small market teams, even in the salary cap era, making the playoffs may end up being the difference between operating profit and operating loss, so you have to put a good team out there. Link to comment Share on other sites More sharing options...
PASabreFan Posted October 31, 2008 Report Share Posted October 31, 2008 I'm not surprised at all. You know what this tells me? It tells me that running a lean operation is not good enough to make a profit. At some point, having a good hockey team is key to making a profit. How? Because of the additional revenue a team makes from playoff gates in addition to the zero paychecks an owner makes to players as players are only paid from the start of the regular season to the end of the regular season. Most bonuses then come from the league for playoffs. So, the lesson is that to be profitable not only do you need to run a lean operation, you also must have a good team that will advance in the playoffs. This speaks even more to last offseason's front office debacle. And, I guarantee you that DR and possibly LQ used the bottom line to convince TG to invest more in the players so that they could have a good enough team to make the playoffs and be in the black instead of what happened last year. For small market teams, even in the salary cap era, making the playoffs may end up being the difference between operating profit and operating loss, so you have to put a good team out there. Been sayin' that for years. A lot of fans don't get it. We must now form an unholy alliance. Link to comment Share on other sites More sharing options...
spndnchz Posted October 31, 2008 Report Share Posted October 31, 2008 I'm not surprised at all. You know what this tells me? It tells me that running a lean operation is not good enough to make a profit. At some point, having a good hockey team is key to making a profit. How? Because of the additional revenue a team makes from playoff gates in addition to the zero paychecks an owner makes to players as players are only paid from the start of the regular season to the end of the regular season. Most bonuses then come from the league for playoffs. So, the lesson is that to be profitable not only do you need to run a lean operation, you also must have a good team that will advance in the playoffs. This speaks even more to last offseason's front office debacle. And, I guarantee you that DR and possibly LQ used the bottom line to convince TG to invest more in the players so that they could have a good enough team to make the playoffs and be in the black instead of what happened last year. For small market teams, even in the salary cap era, making the playoffs may end up being the difference between operating profit and operating loss, so you have to put a good team out there. In a smaller market your comments make sense, but as for larger markets i.e. Toronto, they rarely have a decent team and had a plus 66 million operating revenue last year and forecasts a profit of $105 million by 2011 on revenue of $477 million. Link to comment Share on other sites More sharing options...
SabresFan526 Posted October 31, 2008 Report Share Posted October 31, 2008 In a smaller market your comments make sense, but as for larger markets i.e. Toronto, they rarely have a decent team and had a plus 66 million operating revenue last year and forecasts a profit of $105 million by 2011 on revenue of $477 million. I was referring only to smaller market teams. Larger market teams have a fan base that tend to be less price sensitive than smaller market teams and hence can achieve more revenue due to higher ticket prices and can command more revenue from TV Distribution deals as well. Because their revenue is higher they are much more profitable as the salary cap simply defines a virtual maximum for spending on a team. I use the term virtual because the cost structure will not be identical for every team aside from player payroll i.e. how many scouts, scout salaries, ticketing office salaries, business development salaries, cost of concessions, etc. The salary cap gives a somewhat equal footing in terms of cost structure for all teams, but it does nothing in terms of revenues. That's why for smaller market teams, revenue sharing isn't simply enough to be in the black. It just means they can break even or incur some small losses. The salary cap simply minimizes the losses a smaller market team can have. But, in order to really be profitable, small market teams really need to make the playoffs as that is where profitability is at its highest since there are no player salaries to account for and ticket prices can be charged at much higher rates. This is why its absolutely imperative in the salary cap era for smaller market teams to do everything in their power to use the salary cap to their advantage and field a good hockey team, have excellent coaching staffs, and be better at drafting and developing talent because the margin for error economically is so much smaller for small market teams than it is for larger market teams. From a business perspective, small market owners need to think of hockey economics this way. In order to be profitable, you have to make the playoffs. In order to make the playoffs, you have to have a good team. In order to have a good team you need good players and a good coaching staff. In order to have good players, you need to draft, develop, RETAIN, and acquire talent within the salary cap that will field a good team. If you have a good team, people will come and watch the games. And, if you make the playoffs, more people will want to come, increasing demand, thereby allowing you to increase ticket prices for playoff games in order to maximize revenue. Unfortunately, many owners think in terms of cutting costs to make profit, but given that the salary cap levels the playing field in terms of costs, there is only so much you can cut. You have to think in terms of generating revenue and the best way for small market teams to generate revenue is through tickets, merchandise, concessions, but most importantly, the playoffs. Playoff!?!? (in my best Jim Mora impersonation) Link to comment Share on other sites More sharing options...
PASabreFan Posted October 31, 2008 Report Share Posted October 31, 2008 I was referring only to smaller market teams. Larger market teams have a fan base that tend to be less price sensitive than smaller market teams and hence can achieve more revenue due to higher ticket prices and can command more revenue from TV Distribution deals as well. Because their revenue is higher they are much more profitable as the salary cap simply defines a virtual maximum for spending on a team. I use the term virtual because the cost structure will not be identical for every team aside from player payroll i.e. how many scouts, scout salaries, ticketing office salaries, business development salaries, cost of concessions, etc. The salary cap gives a somewhat equal footing in terms of cost structure for all teams, but it does nothing in terms of revenues. That's why for smaller market teams, revenue sharing isn't simply enough to be in the black. It just means they can break even or incur some small losses. The salary cap simply minimizes the losses a smaller market team can have. But, in order to really be profitable, small market teams really need to make the playoffs as that is where profitability is at its highest since there are no player salaries to account for and ticket prices can be charged at much higher rates. This is why its absolutely imperative in the salary cap era for smaller market teams to do everything in their power to use the salary cap to their advantage and field a good hockey team, have excellent coaching staffs, and be better at drafting and developing talent because the margin for error economically is so much smaller for small market teams than it is for larger market teams. From a business perspective, small market owners need to think of hockey economics this way. In order to be profitable, you have to make the playoffs. In order to make the playoffs, you have to have a good team. In order to have a good team you need good players and a good coaching staff. In order to have good players, you need to draft, develop, RETAIN, and acquire talent within the salary cap that will field a good team. If you have a good team, people will come and watch the games. And, if you make the playoffs, more people will want to come, increasing demand, thereby allowing you to increase ticket prices for playoff games in order to maximize revenue. Unfortunately, many owners think in terms of cutting costs to make profit, but given that the salary cap levels the playing field in terms of costs, there is only so much you can cut. You have to think in terms of generating revenue and the best way for small market teams to generate revenue is through tickets, merchandise, concessions, but most importantly, the playoffs. Playoff!?!? (in my best Jim Mora impersonation) Marry me. Link to comment Share on other sites More sharing options...
SabresFan526 Posted October 31, 2008 Report Share Posted October 31, 2008 Marry me. Thanks for the offer. Quite flattered. But my wife may get upset with me. Sorry. Link to comment Share on other sites More sharing options...
PASabreFan Posted October 31, 2008 Report Share Posted October 31, 2008 Thanks for the offer. Quite flattered. But my wife may get upset with me. Sorry. First Spent Cheese turned me down. Now you. I have no luck with men. Link to comment Share on other sites More sharing options...
Eleven Posted November 2, 2008 Report Share Posted November 2, 2008 If you're talking about me, I never said he was raking it in now. I said when he sold the team, he would rake it in. The franchise's value has almost doubled since he bought it. I'll say it again -- when Golisano bought the team, he said he wasn't in it to make money on a yearly basis. I believe he said he wanted to approximately break even. The guy will do fine in the long run. I wish fans would stop worrying about the guy's bottom line. It is well padded. Right on. A sports team is a long-term asset. The team value--the more relevant indicator--increased by only 4% last year (same article), but it's not exactly a boom out there, and the value is nearly double what TG paid for the team. Debt is at only 30%. Ownership is doing just fine. Link to comment Share on other sites More sharing options...
el_Polako Posted November 3, 2008 Report Share Posted November 3, 2008 It's all about $$$ from advertisements. Ad's on the boards in Buffalo cost X amount, the same ad's in say Toronto or NYC cost 6-10 times more. Ticket sales are important but also for advertisement stand point. If ticket revenue was so key, teams wouldn't offer such great season ticket packages. The more sold tickets, the more they can charge companies to put up their ad's. Link to comment Share on other sites More sharing options...
Bmwolf21 Posted November 3, 2008 Report Share Posted November 3, 2008 It's all about $$$ from advertisements. Ad's on the boards in Buffalo cost X amount, the same ad's in say Toronto or NYC cost 6-10 times more. Ticket sales are important but also for advertisement stand point. If ticket revenue was so key, teams wouldn't offer such great season ticket packages. The more sold tickets, the more they can charge companies to put up their ad's. It's about luxury suites/boxes first, then PSL's and regular tickets, then advertising. Toronto can charge much higher prices for luxury suites and general tickets - at an average cost of $76.15 /seat, the Laffs' average ticket price is twice that of the Sabres' ($36.43.) LINK Toronto also charges an arm and a leg for PSL's - between $9,000 and $30,000/seat - something the Sabres really couldn't get away with. Link to comment Share on other sites More sharing options...
inkman Posted November 3, 2008 Report Share Posted November 3, 2008 Spent Cheese :lol: I have no luck with men. This post was the funniest thing I've read here in a while...and smart! :thumbsup: Link to comment Share on other sites More sharing options...
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