Despite Stanley Cup championship, Blackhawks were a financial loser last year

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rockywirtz1.jpgPerhaps there was a method to old “Dollar” Bill Wirtz’s madness and Scrooge-like ways. A story out of the Chicago Tribune by Melissa Harris claims that even in spite of the Blackhawks selling out the United Center on a nightly basis, reaching the playoffs and ultimately winning the Stanley Cup the team finished the season, financially speaking, deep in the red. No truth to the rumor that the sound of late owner Bill Wirtz saying, “I told you so” have been heard coming from the halls of United Center.

Wirtz first revealed that the team was not profitable in private. “It’s going to take four (or) five years before we can actually get back in the black,” Wirtz said at an April 19 forum at the Economic Club of Chicago, according to a transcript. “And right now we’re still supporting the Blackhawks with our other Wirtz organizations.”

In a follow-up interview this week, Wirtz said that the Blackhawks ran out of cash several times last season. Each time, he received a memo, known as an internal capital call, in which the team requested money from Wirtz Corp., the Blackhawks’ parent company, to cover operating expenses. And at the end of the season, Wirtz said he double-checked that the playoffs did not cover those losses; the franchise remained in the red, the team’s accountant told him.

“We have multiple businesses and obviously we want every one to stand on its own,” Wirtz said. “And what you don’t want to do is manage one business from the profit of the other one.”

One of the things the team is doing to counter the financial shortfall is to raise season ticket prices. After all, a team’s gains and losses can pass down to the consumer, this time to the tune of an average 20% raise across the board. What once used to be a comparatively cheap ticket to buy in the NHL is now one of the priciest. If you’re worried that this will cause current owner Rocky Wirtz to start conducting business the way his old man did, however, fear not.

“We’re going to do everything we can to win,” team President John McDonough said. “We want this to be a destination for free agents. We want this to be a place where players want to play. … We’re going to charter our players (to away games) and we’re going to stay in hotels that are going to be synonymous with a first-class operation. When Rocky and I first met, we talked about this commitment.”

At least the Blackhawks no longer have to worry about home games being blacked out on local television. Progress finds its way into Chicago at long last. But why have costs gotten so out of control for the Blackhawks even in spite of success? Perhaps you might want to sit down for this one. Escalating salaries are to blame.

Compared with professional basketball, baseball and football, the economics of hockey are difficult.

The league operates under a 2005 revenue-sharing agreement. The way it works is that the teams that rake in the most income, generally regardless of expenses, subsidize the teams that generate the least.

A drawback is that it disqualified the Blackhawks, because of the size of the Chicago market, from receiving revenue sharing dollars.

The primary benefit is that it capped players’ salaries — an owner’s largest expense.

“The collective bargaining agreement has been a major help, but by no means did it create a league where all teams were going to be profitable from that point forward, or even most of them, quite frankly,” said Marc Ganis, president of SportsCorp, a Chicago-based sports consulting firm.

Under the agreement, the more the Blackhawks earn, the more they have to share.

For instance, the Blackhawks keep ticket revenue from their regular-season home games. But for every playoff home game last season, the Hawks had to give the NHL at least 50 percent of what their gate receipts would have been at a regular-season United Center sellout.

And gate receipts are everything in hockey. Ticket sales typically account for up to half of a team’s income.

“You can technically lose money during the playoffs if you don’t raise your ticket prices” for them, Wirtz said.

Obviously the league’s tough position with television contracts play into this as teams aren’t earning nearly as much as the other professional leagues but that’s something all the teams have to deal with. Forgive my cynicism here, but hearing from a team that has a license to print money with a reinvigorated fanbase that’s going crazy for their team (and all the merchandise and ticket sales that entails) makes me feel that this claim of losing so much money feels out of place.  The team is pushing the limits of the salary cap and spending money that they were more than happy to do in order to win it all.

Granted, Rocky Wirtz isn’t playing the “woe is us” card through all this and comes off more as explaining that all is not as rosy as it appears. But isn’t that the point here? It comes off as finding a subtle way to complain about the system in place but doing so in a way so as to not offend anyone in particular. They’ve accepted what they’re doing and their role in everything but don’t want to upset the fans when those costs get passed along to them. Thankfully for Rocky Wirtz, the easiest way to make sure complaints about higher ticket prices are kept to a minimum is to win it all. Mission accomplished.

NHL’s participation in 2018 Olympics still undecided, but World Cup expected to return in 2020

TORONTO, ON - SEPTEMBER 29:  Sidney Crosby #87 of Team Canada carries the World Cup of Hockey Trophy after Canada defeated Europe 2-1 during Game Two of the World Cup of Hockey final series at the Air Canada Centre on September 29, 2016 in Toronto, Canada.  (Photo by Bruce Bennett/Getty Images)
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TORONTO (AP) The World Cup of Hockey will return, without a doubt, and avoid another 12-year break.

NHL Deputy Commissioner Bill Daly and NHLPA Executive Director Don Fehr both confirmed for The Associated Press on Friday that they expect the next World Cup of Hockey to be in 2020.

It is much less certain whether the best players will go to South Korea to participate in the 2018 Olympics.

International Ice Hockey Federation President Rene Fasel told the AP on Tuesday the odds of NHL players going to the Pyeongchang Games were 50-50, a slight upgrade from his forecast in May.

Later the same day, Daly said he felt more “negative,” about the chances the league’s players will be in a sixth straight Olympics due to the International Olympic Committee’s decision to not pay for NHL players’ travel and insurance as it has in the past.

Fehr, who represents players who have made it clear they want to be in the Olympics, said he’s more optimistic than pessimistic a deal will get done.

Related:

Daly: NHL could skip 2018 Olympics and return in 2022

Alex Ovechkin again says he plans to play in 2018 Olympics even if NHL doesn’t participate

The union head insisted he isn’t concerned about the IOC’s stance.

“Everybody understands that nobody’s going to risk their career and future earnings and all the rest of it in return for no compensation and no coverage,” Fehr told the AP. “No one will do that. They understand that. That’s been a given for a long, long time. If it plays out that way, which I do not expect it to play out that way, we’ll deal with it.”

The IOC isn’t buying the banter.

“I think both sides are playing poker,” president of the International Ski federation Gian Franco Kasper, who represents winter sports on the IOC executive board, said Friday in an interview with the AP.

The IOC does not want to continue its past practice of paying for NHL players’ travel and insurance because it doesn’t want to have to do the same for athletes in other sports.

Fasel said it is his job to raise the money needed, which he estimates to be about $10 million. Fasel said he plans to “beg,” for the funds from national Olympic committees and hockey federations. He acknowledged using some of the $40 million the IOC gives the IIHF to fund its programs, including development opportunities for boys and girls, could be used to bring the best hockey players to South Korea.

Daly said the NHL would like a final decision to be made by the end of the year so that it can set the 2017-18 schedule with or without a break midway through the slate for the Olympics.

The World Cup of Hockey, which the NHL and NHLPA teamed up to bring back for the first time since 2004, does not conflict with the league’s schedule because the games were played during training camp and early preseason games.

Playing hockey in late September, however, is not an ideal time to draw TV viewers in the U.S. in part because of interest in the NFL, college football and baseball.

Game 1 with Canada and Team Europe in the World Cup finals on Tuesday night – without direct competition from football – drew just 494,000 viewers on ESPN. A mere 297,000 people tuned in to watch Sweden face Europe in the semifinals on Sunday afternoon on the cable network. With a potentially interesting matchup with Canada and Russia, just 353,000 were watching hockey on ESPN.

Daly acknowledged it was a “challenge,” to engage Americans enough to watch the event. It did not help that the U.S. and North American Under 23-teams didn’t make it to the semifinals of the eight-team tournament.

It was also, surprisingly, difficult to fill seats at the home of the Toronto Maple Leafs despite being in hockey hotbed even though the league said ticket sales went very well. It seemed many more people were interested in attending Toronto Blue Jays games when world-class hockey matchups and playoff-push baseball games were played at the same time.

The level of hockey, at times, was impressive. And, the atmosphere was electric when Canada rallied from a one-goal deficit in the final few minutes Thursday night to beat Europe 2-1.

During many stretches of play, however, the World Cup of Hockey didn’t do enough to fire up fans in attendance.

Days before Canada beat Europe 2-0 in the best-of-three series to win the World Cup, Canadian coach Mike Babcock seemed to sum up the situation best.

“The World Cup is great. It’s not the Olympics,” Babcock said in an unsolicited comparison of the two events. “Let’s not get confused.”

Report: Ehrhoff headed to Bruins on a PTO

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The Boston Bruins were under some serious pressure this summer to improve their group of defensemen.

That didn’t happen.

With training camp and the preseason now in full swing, it appears the Bruins are bringing in a veteran blue liner — at least on a professional tryout.

On Friday, TSN’s Bob McKenzie reported that unrestricted free agent blue liner Christian Ehrhoff is about to join Boston on a PTO following his showing at the World Cup of Hockey.

In six games with Team Europe, Ehrhoff had three assists — all at even strength — and nine shots on goal.

Ehrhoff is now 34 years old, and the Bruins already have a pair of seasoned defenders in Zdeno Chara (39 years old) and John-Michael Liles (35 years old) on their roster. Adam McQuaid turns 30 years old in October.

Ehrhoff played last season on a one-year, $1.5 million contract, and was placed on waivers in February while with the L.A. Kings, before he was traded to Chicago. Age and injuries have caught up to him, and he never did fit with the Kings’ style under Darryl Sutter.

He was most productive during two seasons in Vancouver, a puck-moving defenseman that could effectively skate the puck out of trouble and move the attack that way if need be. But that was from 2009 to 2011. His production has dipped, especially over the last three years.

He was also pivotal to Vancouver’s power play, especially in 2011 when the Canucks won the Presidents’ Trophy and made it to the Stanley Cup Final — against Boston.

Again, that was five years ago.

Lehner (forearm contusion) to miss preseason game versus Maple Leafs

Matt Puempel, Alex Chiasson, Robin Lehner
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The Buffalo Sabres will not have goalie Robin Lehner in their lineup Friday versus the Toronto Maple Leafs.

As per the Sabres, Lehner is dealing with a forearm contusion and will not dress for this preseason game. Jason Kasdorf will start in net for Buffalo.

Members of the media in Buffalo have noted that if this were a regular season game, Lehner would be able to play.

Lehner had ankle surgery in March, ending his 2015-16 season. His ankle issues dated even further back, to the beginning of last season when he suffered a high-ankle sprain.

The Sabres have some exciting young players on their roster, especially up front, but they need Lehner to be healthy if they are to take a run at a playoff spot this season.

Behind him sit Linus Ullmark, Anders Nilsson and Kasdorf, who have a combined 73 games of NHL experience between them all.

Matthews to sit out preseason tilt versus Sabres, as Maple Leafs give him ‘a little break’

BUFFALO, NY - JUNE 24:  Auston Matthews poses for a portrait after being selected first overall by the Toronto Maple Leafs in round one during the 2016 NHL Draft on June 24, 2016 in Buffalo, New York.  (Photo by Jeffrey T. Barnes/Getty Images)
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The Toronto Maple Leafs play the Buffalo Sabres on Friday. But No. 1 overall pick Auston Matthews won’t be in the lineup, according to multiple reports.

“Sooner or later, he’s going to get in, but not tonight,” said assistant coach Jim Hiller, as per the Toronto Sun.

“The lineups are day by day. They (World Cup players such as Matthews, Milan Michalek, Leo Komarov and James van Riemsdyk) went through a solid three weeks. It’s a little break, a little down time. There are tons of games coming. They’ll get a lot of ice time. They’ll get in shortly.”

(The report also notes that Matthews is not dealing with a health issue, which is obviously good news for the Leafs.)

On a night when the No. 2 overall selection Patrik Laine is slated to make his preseason debut for the Winnipeg Jets, fans wishing to see Matthews don a Maple Leafs jersey in his anticipated debut will have to wait.

Matthews played for Team North America at the World Cup held in Toronto. He had two goals and three points in three round robin games, but the young North American team was unable to advance to the semifinal round.

The Maple Leafs play the Montreal Canadiens at home on Sunday.