I’ve had someone pass on a bunch of stuff that’s been filed in the course of the Coyotes bankruptcy hearings. I don’t know that I can post the documents without his approval – if he happens across this, he can email me or leave a note in the comments – but I thought I’d post on some of the more interesting information.
EDIT: Thanks to Gerald Carpenter, a lawyer who comments at various hockey sites, for passing this on to me.
One of the things that people with an interest in this side of the NHL have always wondered about is the financial side of hockey. We see the salaries, have some ideas about what coaches are being paid and the rest of its a mystery. With all of the stuff that’s been filed in court in Phoenix, an awful lot of this once secret information is now becoming a matter of public record.
The Coyotes are basically structured in the form of two corporations: Arena Management Group, LLC and Coyotes Hockey, LLC. Coyotes Holdings, LLC owns 100% of Arena Management Group, LLC. It owns 91.79% of COyote Hockey, LLC. The rest of Coyotes Hockey, LLC is owned by minority shareholders; most notably, Wayne Gretzky.
In January of 2009, the Coyotes and the NHL came to an agreement whereby the NHL would provide further financing to Phoenix. As part of this agreement, the Coyotes filed a bunch of information with the NHL, including a document entitled “2008-09 Budget #2 (Solomon)”, which included budgets for Coyotes Hockey, LLC and Arena Management Group, LLC.
Coyotes Hockey, LLC had the following budget:
Ticket Revenue – $17,782,893
Concessions & Merchandise – $2,078,497
Box Office Revenues (service charge on tickets) – $417,792
Suite and Premium Seating – $9,863,588
Corporate Revenues (sponsorship and advertising) – $13,000,016
Broadcast Revenues – $4,473,003 (This is apparently just local money, which is amazing to me, as they apparently draw about 7K viewers per game)
NHL Revenues, Broadcast and Enterprises – $9,257,699
NHL Revenue Sharing – $14,000,000
Fan Development/Other – $147,199
Hockey Operation Revenues (?) – $1,652,000
Ticket taxes – ($2,163,479)
Total Revenues – $70,479,188
Player Salaries and Performance Bonuses – $43,911,000
Player Benefits – $2,776,860
Coaches, Equipment, Admin. etc. – $9,624,040
Scouting Department – $1,900,000
Farm System – $3,649,742
Total Hockey Expenses – $61,861,642
Finance & Administration – $2,999,418
Ticket Sales Dept – $2,715,054
Box Office – $750,591
Fan Development – $323,433
Advertising & Promotion – $2,328,181
Game Operations – $625,727
Sales Service Dept – $2,125,378
Media Relations – $635,585
Premium Sales – $993.910
Corporate Sales Dept. – $1,633,985
Community Relations Department – $281.160
Broadcast Department – $2,166,101
Business Operations – $629,797
Total Business – $18,209,321
Ownership – $514,410
League Expenses – $3,811,389
Other Management Expenses – $5,783,988
Glendale Arena Other Expenses – $2,315,380
Total Other – $12,425,167
Total Expenses – $92,496,130
EBITDA – (22,016,942)
Interest Expense – $13,523,969
Depreciation & Amortization (I assume that this is largely player contracts) $18,235,665
Net Operating Loss – $53,776,576
If anyone’s interested, I’ll throw up the Arena Management Group, LLC numbers tomorrow. There was another $7MM in projected loss there.
There’s lots of interesting stuff there, I think. I’m surprised at the cost of the farm system – $3.6MM seems like a pile of money to pay to develop players. I’ve long wondered if the Oilers were avoiding having a farm team because it’s cheaper – it wouldn’t surprise me if they were saving $2MM or more annually by avoiding doing so.
I wonder what the Oilers are pulling in in broadcast revenues. Their audiences are multiples larger than the Coyotes.
I have no idea how reasonable that coaching line is – the big question is whether it contains some outrageous chunk of Gretzky money. It strikes me as being awfully high, given that it’s ostensibly just the hockey people, with the business people separated out. I’m amazed by the fact that the Coyotes are apparently pulling in $23MM in league revenues when you combine their revenue sharing and central operations money – I can’t believe that the existence of the Coyotes is making any sort of contribution to the centrally generated revenues, so that strikes me as being close to a pure drain on the league.
That $14MM in revenue sharing is unbelievable, because it emphasizes how far the team is from respectability. As they improve financially, that money would be clawed back from them. The Coyotes have a long way to go revenue wise before they’re no longer a financial drain on the NHL as a whole. I figure that the earliest they’re a playoff team is 2010-11 – it’s probably going to get worse there before it gets better.
For those interested in comparing and contrasting with the Forbes numbers, they’re here and don’t look half bad. They look to be way under the actual losses but who can imagine a team that misses the playoffs like the Coyotes do spending that kind of money on coaching?