The current stoppage is affecting every team across the NHL. However, the St. Louis Blues could be particularly affected.
The St. Louis Blues, like franchises all over the world, are dealing with the financial affects of the current pandemic. While they are not likely feeling a financial crunch the way your average hourly worker might be, they are losing money by the day with no hope of recouping the losses in sight.
The Blues are not alone in this shrinking financial situation. However, as a smaller market team trying to compete with cities twice their size, every dollar counts for The Note.
According to Ticket IQ founder Jesse Lawrence, reported by Jim Thomas, the Blues could lose up to $15.85 million just from the six home games that remained on their regular season schedule. That is not counting the heightened revenue gained from playoff games or a lengthy playoff run.
Those numbers were figured based on the average ticket cost on the secondary market. The equation also assumed that the Enterprise Center would be filled to capacity each of the six games. Even if it was not, we are talking over $10 million lost.
Even with another equation, the Blues will be taking a bath with the loss. In Thomas’ article, Team Marketing Report says the Blues will lose around $10.2 million in revenue if all six regular season games are scrapped. Their number comes from the fan cost index of $374.57 per game, which is what the average family of four pays for tickets, parking, four sodas, four hot dogs, two beers and two hats.
Why hats? I don’t have a clue. Perhaps a hat represents the median price of souvenirs.
The Blues pride themselves on being business savvy in their current ownership group and team power structure. In fact, they were nominated for team of the year by the Sports Business Awards.
Their front office has wheeled and dealed enough to land the Blues both a Winter Classic and an All-Star game within the last four years. They’ve partnered with communities to get new rinks built. They’ve been more active in the community, whether for profit or charity, in recent years than any single time in memory.
These guys know how to run a business and they’ve guided their franchise to the top of the heap. Now, like the country around them, the foundations might be cracking.
Nobody is prepared for this. Nobody expected this.
Some will shrug off this financial loss saying something asinine like they’ll just write it off or they have stockpiles of cash. We have each been in that situation where we’ve argued on the side that owners are too rich and athletes make too much money, but not seeing the actual downside of our franchise losing almost $16 million is just foolish.
This is not the same as a lockout or strike. Owners often know those situations are likely and start stockpiling reserves to deal with the losses.
This is not just rich people losing a drop in the bucket either. While guys like Tom Stillman and Jim Kavanaugh and all the other members of the Blues ownership group are likely fairly secure in their own finances, the team is a different entity.
The Blues are not the Oakland Raiders or the Los Angeles Lakers or the New York Yankees to where they have merchandise and licensing royalties coming in from all over the world. The Blues have a sizable fan base, as we have seen from their attendance at away games in 2019-20, but they don’t bring in that kind of money. Even if you count the financial windfall that came from winning a Stanley Cup, the Blues are middle of the pack.
According to Forbes, the Blues rank 17th in franchise value. However, that’s including a 14% bump in value from the previous year, which was likely due to winning a championship.
The Blues were listed as having a revenue of $171 million and an operating income of $20 million. For reference, the New Jersey Devils, who have failed to make the playoffs seven of the last eight years, have $10 million more in revenue and $5 million more in income.
As much as we love them and as much as we see hockey as a semi-even playing field, the truth is it is not. The Blues are a small to mid-market team that has made every dollar count in recent years.
Their general manager, no matter how much social media bashes him, has made almost all the right moves. Even his bad contracts were not crippling ones.
Their ownership and business leaders have positioned this team in the community in a way that almost rivals the St. Louis Cardinals. St. Louis will always be seen as a baseball town, but the Blues are no longer an afterthought used to pass the time until spring training.
The Blues needed that money. They will not go out of business without it, but it is going to hurt them.
It comes at a time when things were going so well, too. The team was poised for another run at a Cup and the building was often packed and then the bottom falls out. You go from another financial boon season to losing millions.
The sad part is the Blues would likely be losing that money, or close to it, even if the league decides to play in empty arenas. While NBC has been good to the NHL, despite their apparent biases, the financial aspect of the deal is not as lucrative as it is for the NBA or NFL.
There have been jokes made, but it is not as far from the truth as some might think that the NFL could play in front of empty stadiums and still make money. The NHL, and the Blues, need people in the seats.
On a smaller scale, this is being proven by smaller leagues. Lower minor league or independent leagues such as the ECHL or SPHL are left wondering if they will even have teams in existence next season because of the lost revenue. The Blues are not in that boat, but it shows that the sport of hockey is still largely driven by fan involvement, whether it is buying a ticket or merchandise.
“Comparatively, ticket revenue is a larger share of hockey’s total revenue than is true for the other sports. So for them to lose gate is obviously difficult.” – Patrick Rishe, Washington University (reported by Jim Thomas, Post-Dispatch)
The league’s deals will keep everyone afloat. Nobody needs to scrape their pennies together or start Go Fund Me’s for the NHL or the Blues.
However, it just goes to show that everyone is impacted by this. Even if owned by wealthy people, not all franchises are alike and the loss of this much revenue is going to impact the Blues.
Unfortunately, while we all still hold out hope for a potential return to action to conclude 2019-20, these losses will likely grow. If there is no playoffs and no revenue gained from advertising, both the Blues and the NHL are going to be dealing with a lot less money than anyone had planned, so much so that the idea of the salary cap going up next season might have to be scrapped.
Time will tell. Stay safe and stay healthy Blues fans.