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.

Sabres hire Sexton, Greeley as assistant GMs

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It was reported Saturday and made official today — Randy Sexton is joining the Buffalo Sabres as an assistant general manager. He will also serve as GM of the AHL’s Rochester Americans.

Also joining the Sabres as assistant GM is Steve Greeley, who spent the past two seasons as assistant director of player personnel with the New York Rangers.

“Randy and I developed a positive working relationship during our time in Pittsburgh and I think his experience and insight will be advantageous for our front office,” said Sabres GM Jason Botterill in a release. “In Steve, we have hired a talented hockey executive who will offer unique insight to our organization. They both have experience at all levels of the game and we think they will be valuable assets for the Buffalo Sabres moving forward.”

Sexton’s job with Rochester will be especially important for what Botterill is trying to do with the Sabres.

“I think one of the successes of the organization that I’m coming from is the relationship between Wilkes-Barre and Pittsburgh,” Botterill said when he was hired in May. “We want to re-strengthen the relationship with Rochester and Buffalo.”

The last two years, Sexton has been the Penguins’ director of amateur scouting.

Report: Elliott making ‘tentative’ plans to live in Winnipeg

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The talk of Brian Elliott joining the Jets isn’t going away.

This morning, Rick Ralph of TSN 1290 tweeted that Elliott has “been making tentative accommodation plans for Winnipeg.”

The 32-year-old goalie is an unrestricted free agent, and the Jets’ goaltending was once again a sore spot last season.

“We’re going to a take a look at whatever is available to us and if there’s a good opportunity there that can help us, we’ll jump at it,” GM Kevin Cheveldayoff said Saturday at the draft, per the Winnipeg Free Press. “We’ve got a list of names lined up to reach out to their representatives and see if we’re a fit for them and as far as they want to consider us.”

Read more: Is Brian Elliott a fit for Winnipeg

The Jets have Michael Hutchinson under contract for one more year before he can become unrestricted.

Connor Hellebuyck, meanwhile, is a restricted free agent. The Jets are still high on him, but perhaps rushed him into the No. 1 job last year.

“We want forward progress for the team,” said head coach Paul Maurice. “Either Connor or Michael has to step up on that or we’ve got to get some help for those guys.”

Elliott, of course, had a tough first year in Calgary. The Flames then went a different way by acquiring Mike Smith from Arizona.

‘That’s definitely a huge option for us’: Brian Boyle wants to go back to Tampa

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Brian Boyle spent almost three full years with the Tampa Bay Lightning before being traded to the Toronto Maple Leafs at last March’s trade deadline.

The veteran center liked his stint in Tampa so much that he’s willing to go back there when he becomes a free agent in less than week.

“We love Tampa,” said Boyle, per the Tampa Bay Times. “If Tampa wanted to work out a deal, that’s definitely a huge option for us. That’s something that I’ve kind of always thought about. I haven’t closed the door on anything.”

Boyle enjoyed quite a bit of success with the Bolts. During his time there, he scored at least 13 goals in each of his three seasons, which isn’t bad considering he was more of a bottom-six player when he was there.

It’s unclear if the Bolts would be willing to take him back at this point, but a big factor will likely be his contract demands.

“(Tampa) is a great place to be, great place to start a family. And, honestly, we’ll see what they say. You want to be wanted. That’s the other part.”

The Lightning have just over $23 million in cap space right now. That seems like a good amount, but they still have to sign Tyler Johnson, Ondrej Palat and Andrej Sustr. It’s also pretty clear that they’re in the market for a top four defenseman, and that won’t come cheap. As of right now, they only have three blue liners on one-way contracts.

The 32-year-old is coming off a contract that paid him $2 million per season. He should be able to fetch a higher number if he hits the open market.

‘Canes re-sign Masterton Trophy finalist Derek Ryan to one-year deal

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The Carolina Hurricanes have reportedly taken care of some business on Monday morning, as they’ve re-signed forward Derek Ryan to a one-year deal worth $1.425 million, per TSN’s Frank Seravalli.

Update: The Hurricanes have confirmed the news.

The 30-year-old had 11 goals and 29 points in 67 games during his first full NHL season.

Ryan’s journey to the NHL is a great story.

He played three full seasons of junior hockey with the WHL’s Spokane Chiefs (2004-2007) before joining the University of Alberta hockey program for four years (2007-2011). Once he completed his Canadian University hockey eligibility, Ryan went on to play three seasons of pro hockey in the Austrian League and one year over in Sweden. He came back to North America for the 2015-16 season, where he played 70 games with AHL Charlotte and six games with the ‘Canes.

Ryan was a finalist for the Masterton Trophy, which is awarded to “the National Hockey League player who best exemplifies the qualities of perseverance, sportsmanship, and dedication to hockey.”

“I feel a little out of place,” Ryan told NHL.com during the 2017 NHL Awards. “A couple of years ago, I was battling my way through the European leagues and all of a sudden here I am at the NHL Awards and just kind of taking it all in.”