Do The Thrashers Have Large Talons?

Monday, February 12, 2007

Declining Ticket Revenues in Atlanta?

A reporter for the Canadian National Post has been able to get his hands on the gate revenue data for all NHL teams as of New Year's Day. According to this story Atlanta is one of the eight US NHL teams where gate revenues were down in the first half of the season.

What is noteworthy about this story is that across the league (and in Atlanta) ticket prices were raised an average of 6% and yet receipts rose just 5%. How could revenues lag behind, even when ticket prices went up? That suggests that a significant number of tickets are being sold at a discount of even being given away. The published attendance figures for the NHL amount to "tickets distributed" not "tickets sold" or even "fans in the building". Right here in Atlanta there are numerous ways to obtain discounted deals or even free seats for Thrasher games. I myself took advantage of the Toys-for-Tots promotion to get free tickets (which I gave to people who had never attended a NHL game before).

The article had the following quote "The Maple Leafs still have the priciest ticket in hockey at $80.31 and bring in the most gate receipts per game at just over $1.5-million per game. By the New Year, the Leafs had rung in nearly $31.8-million in gate receipts, roughly equal to the combined total of Chicago, St. Louis, Atlanta and Carolina."

If this is true it would suggest that the Thrashers bring in less than $20 million per season in gate revenue which is hardly the way to sustain a payroll of $35 million. I would be very interested to hear Thrashers club officials respond to this story and specifically the accuracy of this quote. Right now I'm taking with a grain of salt given the chest beating tendencies on the part of the Canadian Press ("It's OUR game and those Americans are ruining it...etc").

If the statement is true it would mean that the Thrashers are probably continuing to lose money. If the club cannot generate revenues to cover expenses when right now, what will happen when the salary cap rises to around $44 million next year? Even if the NHL cap rises next season, the Thrashers may find it necessary to operate with an internal budget cap that is significantly lower than the NHL ceiling .

Already we have seen that the club is going to raise ticket prices. We also have seen our GM let good players walk away rather than overpay for their services in the past (Brunette, Savard). The current ownership group might be willing to sustain yearly losses for a while, but at some point they are businessmen and they will want to see the team break even.

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