Last season was a disaster in many ways for the Carolina Hurricanes. The team tied a franchise worst losing streak, they spent much of the start of the season wallowing around last place in the league, several key players were injured, and perhaps most importantly, the franchise lost a ton of money.
According to a recent report published by the Triangle Business Journal, the Hurricanes' revenue dropped by over 25% from 2008-09 to 2009-10. Of course much of that is to be expected because the team failed to make it to the post season last year, while they made it to the Eastern Conference Finals the year before. That fact alone is going to drastically affect all of Carolina's financial statements.
But the club's regular season attendance dropped about 10% from one year to the next as well. The team had total gate receipts of 679,488 in 2008-09 while total attendance for 2009-10 was 624,873. That's a drop in average game attendance from 16,572 to 15,420.
The economy can be attributed for some of that change, but the team's poor performance at the beginning of the year also was a factor.
Last season must have looked like a "worst case scenario" for franchise owner, Peter Karmanos. Not only did revenue drop drastically, (from reportedly $91.8 million in 2008-09 to $68.9 million in 2009-10), but the team doubled down on payroll last year and spent to the max of the salary cap in order to keep their roster intact from the previous season.
That decision turned out to be a huge mistake considering wins and losses and it hit the bottom line like a double-barreled shotgun as the team lost a ton of revenue at one end and also paid out way too much money on the other.
And some wonder why the team is on a strict budget this season?
There could be good news on the horizon though. Not only is the franchise saving money on team payroll this season, (at least $10 -12 million), revenue should be looking better as well. Perhaps due to the help of marketing the NHL All Star Game, or the fact that the team is playing better than it was at this time last year, attendance is higher for the first 11 games this season, than it was over the same period last year.
So far this season the team has drawn 169,897. Last season at this time, for the first 11 home games the team had total attendance of 160,687. (numbers do not include Finland and are from the Hurricanes Hockey Report.)
The trend should continue, which is a positive for the Hurricanes.
On a somewhat related note, it's been well publicized that Karmanos has been trying to sell a portion of the franchise, up to 49%, to pay off the estate of deceased partner, Thomas Thewes. There has been no official update lately regarding that effort from either the Hurricanes or Karmanos.
Last week, Toronto's Globe and Mail ran an article reporting that "sources" indicated that the Canes' owner would prefer to sell 100% of the franchise, not just 49%. Mum's the word over at Edwards Mill Road, although Paul Branecky and Kyle Hanlin addressed the topic in their weekly podcast.
Both said that it was news to them and Hanlin went a bit further and said that it was against everything that they were told as employees there.
But if it was true, would the organization ever admit to news like that to their employees or to the public? That would most likely have an adverse affect on moral and ticket sales. Still, the Globe and Mail has been the only media outlet to mention this and it seems that if the story had legs, there would be other sources claiming the same thing.
Regardless of the percentage that the owner is trying to sell, it looks like bad timing on his part. Not only did revenue take a huge hit from one season to the next as stated above, but Forbes magazine recently dropped the overall value of the franchise from $177 million to $162 million in their latest publication.
Even if the Forbes numbers are off, the report certainly doesn't help the overall process.
In the meantime, the loss in revenue reported by the Triangle Business Journal definitely illustrates the importance for making the playoffs to a professional sports team, especially in the NHL. The Hurricanes need to continue to work toward that goal.