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.

IOC resistant to NHL’s demand to be treated like Olympic sponsor

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In order for the NHL to keep sending its players to the Olympics, Gary Bettman wants the IOC to treat his league more like an Olympic sponsor gets treated.

“We don’t even get the opportunity to promote the fact that we’re at the Olympics,” Bettman lamented earlier this month. “We don’t get to use the rings. I’ve said to the IOC, you know, Coca-Cola is a sponsor, they get to promote their association and say ‘proud sponsor of the Olympics.’ They won’t let us do that.”

It’s not a wholly unfair request by the commissioner. The NHL has to disrupt its season to send players to the Games, and the owners have to risk the health of their stars.

That said, it doesn’t sound like the IOC is going to budge.

“Obviously, this time the owners of the NHL clubs are putting more commercial conditions to the IOC and the Olympic movement,” IOC spokesman Mark Adams told Reuters.

“The IOC knows that the NHL understands that the Olympic movement cannot treat the owners of a commercial franchise of a national league better than an international sports federation or other professional leagues with regard to the Olympic Games.”

Translation: The IOC isn’t about to open a can of worms. (See: Mark Cuban, NBA participation)

Recently, NHLPA chief Donald Fehr summed up the NHL’s desire to get compensated for Olympic participation.

“Based on the proposals to us and the suggestions to the IOC, they don’t care who pays them,” Fehr told Postmedia. “They just want somebody to.”

And according to Fehr, it won’t be the players who pay the NHL.

So if the players aren’t going to give the NHL anything, and the IOC isn’t going to give the NHL anything, well, you see the problem.

Bylsma calls Reinhart’s rule violation, subsequent benching ‘disappointing’

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There was a strange sight during Buffalo’s 3-1 loss to Columbus on Tuesday night: Sabres forward Sam Reinhart, fully dressed, sitting on the end of the bench.

And not moving.

At all.

Reinhart was parked for the entire 60 minutes last night, which the Sabres later revealed to be punishment for violating team policy. According to a Buffalo News source, the 21-year-old showed up late to a meeting in the team hotel.

Suffice to say, Sabres head coach Dan Bylsma wasn’t happy with the situation, or the outcome.

“We’re going to move forward from here,” Bylsma said. “Disappointing, but it happened and we dealt with it. We’re going to move on from here.

“We’re part of a team. We do things as a team. That’s hopefully the lesson.”

This isn’t the first time Reinhart’s run afoul of Bylsma this season.

In late October — and with Reinhart failing to find the back of the net — Bylsma said the club needed to get more out of the sophomore forward, who had 23 goals and 42 points as a rookie last season.

That said, Reinhart has exceeded his point total from last year, currently on 46, and has been a steady lineup presence (well, aside from last night). He’s one of just a handful of Sabres to appear in 70-plus games this season, and saw his TOI jump up to 17:15 per night.

NHL on NBCSN: Injury-riddled Pens look to snap three-game skid against slumping Blackhawks

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NBCSN will continue its coverage of the 2016-17 campaign tonight when the Pittsburgh Penguins host the Chicago Blackhawks at 8:00 p.m. ET. If you want to watch the game online, you can do so here.

Since the All-Star break, the Blackhawks have been one of the better teams in the NHL. Their terrific run over the last few weeks has not only allowed them to jump ahead of Minnesota for top spot in the Central, but it’s also enabled them to build a seven-point lead over their division rival.

But it’s not all perfect in Chicago right now. Despite the fact that they’re in a good spot in the standings, the ‘Hawks had a rough ride through Florida in the last few days.

On Saturday night, they were thumped 7-0 by the Panthers, and on Monday, they blew a 4-1 lead to the Tampa Bay Lightning before losing in overtime.

Their effort may have been better on Monday than it was on Saturday, but it still wasn’t enough to propel them to victory.

“I thought we were 100 percent better than we were last game,” head coach Joel Quenneville said after the loss to the Bolts, per the Chicago Tribune. “I know we had everything going our way there and we started getting cute in the neutral zone and had turnovers in that area, gave them rush chances.”

The performances in their last two games led defenseman Niklas Hjalmarsson to suggest that his team was “too comfortable” this late into the season.

The ‘Hawks have dropped three of their last four games (their only win came in a shootout victory over Dallas).

Now, they’ll have an opportunity to get back on track against the defending Stanley Cup champions.

The Penguins are having issues of their own, and it’s mostly injury-related.

Pittsburgh has been without Evgeni Malkin, Carl Hagelin, Jake Guentzel, Kris Letang, Trevor Daley, Olli Maatta and Ron Hainsey, and it’s clearly affected their play.

There’s a bit of good news on the injury front. Conor Sheary, who suffered a lower-body injury on Sunday, is expected to play tonight.

Malkin was able to skate on his own on Tuesday, and head coach Mike Sullivan hopes to get him back soon.

“Our medical staff has a good handle on it,” Sullivan said, per the Pittsburgh Tribune. “He’s going through a process both on and off the ice. He skated this morning, and he’s making progress, so we’re encouraged and we’re hopeful we’ll get him back sooner than later.”

Coming into tonight’s game, the Penguins have dropped three in a row to the Senators (shootout), Islanders (shootout) and Flyers.

The Pens aren’t in any danger of missing the playoffs, but they’re still battling for home-ice advantage in the opening round of the playoffs.

Columbus’ win over Buffalo pushed them two points ahead of the Penguins (both have played 75 games). The Jackets also have four more regulation/overtime wins.

The Capitals, who beat Minnesota last night, are three points up on Columbus and five points up on Pittsburgh.

PHT Morning Skate: Joel Armia scored an amazing shorthanded goal you’ll have to see to believe

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Joel Armia has developed into a very useful player for the Winnipeg Jets, and on Tuesday night, he scored an incredible end-to-end goal that you won’t want to miss. He fought off one New Jersey Devil then got around two others before scoring this beautiful shorthanded goal. (Top)

–The Score breaks down the best “bang for your buck” contracts on each Canadian team. It’s not shocking to see Senators goalie Mike Condon on this list. The second-year netminder has been with three teams this season, but he’s come through in a big way for the Senators, and he only makes $575,000. (The Score)

–The ESPN Hockey writers put together a list of what they think the Vegas Golden Knights roster is going to look like after the expansion draft. Some well-known names like Andrew Cogliano, Jonas Brodin, Mikkel Boedker, Tomas Plekanec, Jonathan Marchessault, Carl Hagelin and Jakob Silfverberg all made the list. (ESPN)

–Elliotte Friedman’s “30 Thoughts” blog touched on some advice David Poile had for the Golden Knights now that the Oakland Raiders will be moving to Vegas. “You have to do your own thing. We created our ‘Predator Way.’ The Smashville idea and name. In-game entertainment fitting the market. Those things worked.” Friedman also wrote about Ken Hitchcock possibly returning to Dallas, and much more. (Sportsnet)

–Brampton Thunder forward Laura Stacey is the great-granddaughter of hall-of-fame defenseman King Clancy. Recently, Stacey decided she wanted to do a little digging into her great-grandfather’s career, and it really allowed her to get an appreciation for everything he accomplished. “Now I understand how hard he worked, how passionate and determined he was to be the best. Yes, it was a different era, but I can only imagine how hard he had to work to get where he was. As I get older, it makes it more special in that I know more the kind of guy he was.” (Canadian Press)

–The Montreal Canadiens have had some incredible defensemen come through their organization, but last night, Andrei Markov was able to reach an impressive milestone. By picking up an assist in a 4-1 win over Dallas, he tied Guy Lapointe for second in points by a defenseman in franchise history. Larry Robinson’s mark is pretty safe.