True North and Jets scoring big at bank
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Hey there, time traveller!
This article was published 26/11/2013 (3350 days ago), so information in it may no longer be current.
IF the Winnipeg Jets could match their off-ice success with their on-ice performance, the city would not only be preparing for some playoff action, it might even be planning a parade.
The Jets ranked 16th in Forbes magazine’s just-released report of the most valuable teams in the NHL with a current value of $340 million, a 70 per cent jump from a year ago.
That’s also precisely twice what the Chipman and Thomson families paid for the Atlanta Thrashers in May, 2011. And it’s more than triple the return on investment if you consider the initial price included a $60-million relocation fee, a cost considered by many observers at the time as nothing more than a league cash grab. (All figures are in US dollars.)
True North Sports & Entertainment has benefitted on a number of fronts from its investment in the Jets, said Mike Ozanian, New York-based executive editor at Forbes. First, the franchise moved from a non-hockey market to one where the sport is nothing short of a religion. Second, True North receives many millions of dollars a year from lucrative national and local television rights, which simply didn’t exist in Atlanta. Third, there has been a large surge across the league as the average team increased in value by 46 per cent over the past year. (The Jets had the biggest year-over-year increase.) Part of that surge is driven by the expectation that the NHL, and Canadian teams in particular, are going to hit the jackpot with the next television contract with CBC, he said.
“You go from a place (Atlanta) where hockey never got support to Winnipeg where the owner has a great market for hockey and a very loyal fan base,” Ozanian said.
The Jets, however, take issue with Forbes’ numbers. Jets spokesman Scott Brown said the business magazine’s figures are “guesstimates” and “incorrect.”
“The most important thing that people need to realize is we didn’t make a profit last year. Due to the shortened season and the fact that we didn’t lay anybody off (during the lockout), we actually sustained losses,” he said.
Brown declined to provide specific numbers for the team’s operations.
For the first time since Forbes began tracking NHL values 15 years ago, three of the league’s most valuable franchises are Canadian: The Toronto Maple Leafs are once again are the runaway leader at $1.15 billion, followed by the New York Rangers at $850 million, the Montreal Canadiens at $775 million and the Vancouver Canucks at $700 million. The Stanley Cup champion Chicago Blackhawks are next at $625 million.
The Jets’ revenue for the lockout-shortened 2012-13 season was $79 million and it had operating income of $6.3 million, according to Forbes.
The Leafs were also the most profitable at $48.7 million, followed by the Canadiens at $29.6 million.
Ozanian said the Jets, along with every other NHL team north of the border, would have received $13.7 million from various national television rights last season plus the Jets earned another $3-million or so from local cable providers.
The Jets’ skyrocketing value is also due to some out-of-the-box innovations True North has come up with to increase revenue, Ozanian said. Chief among them is its partnership with The Shark Club, a 17,000-square-foot sports bar on the second floor of cityplace.
According to its agreement with the province and Manitoba Liquor & Lotteries, the high-end bar and gaming centre is designed to add about $5.5 million to True North coffers annually.
“(True North) seems to have thought this out really well. This wasn’t a bunch of really rich guys buying the team for a hobby,” he said.
Updated on Tuesday, November 26, 2013 9:24 AM CST: Removes fact box