There has been some discussion lately concerning the Carolina Hurricanes thrifty budget and whether or not the team should step up more out on the free agent market this summer. I thought it would be interesting to see how the Hurricanes compared with other teams around the league, regarding a few factors which might help determine how much money a team can, or should spend.
Not surprisingly, the league's big market teams and the ones which bring in the most money, are at the top of the list when it comes to spending on salaries. In the following chart you'll see that 9 out of the 11 top spending teams, draw 100% or more at the gate. The next four teams are at 98% or more.
Only one of the top 15 spending teams is lower than 97.7% capacity.
On the other side of it, 8 of the bottom 11 teams draw 87% capacity or less.
Since attendance is vital to every team's finances, it's not surprising that there seems to be a direct correlation between a team's attendance figures and how much they spend on salaries. (There are a couple of exceptions.)
The Hurricanes are not the worst drawing team by any means, but they are usually in the bottom third of the league. Should the franchise be expected to spend as much as the big market clubs do, even though the attendance revenue does not justify it?
Of course a team's finances are complicated and can also be affected by revenue sharing and television contracts, but receipts from the gate is the number one source of revenue, by far.
Another factor for Caniacs to consider? According to an annual report put out by ESPN, Carolina has among the most reasonable ticket prices in the league. Last season, they were ranked as the 5th most affordable in the NHL.
Can fans have it both ways? Can they have cheaper tickets and smaller crowds, but expect the team spend more on salaries?
Relatively speaking, the price of hockey tickets is already way out there, but would Canes fans be willing to spend more if the team put it back into salaries?
Of course, the club makes more money if they make the playoffs. And coincidentally or not, the Canes spent much more in the year following those successful playoff runs than they did in the previous seasons.
The year after the Cup win, management brought back almost every player, and many got raises. The year after the 2009 playoff run, the team initially spent to the Cap ceiling. In both of those higher spending seasons, the team failed to make it to the playoffs.
While the argument can be made that most of the playoff teams are at or near the top of the salary cap list, spending more money does not guarantee success. Ask New Jersey or Calgary about that.