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STANLEY CUP PLAYOFFS

Playoffs Are Truly Money Time for the NHL Contenders

Finances: They are a veritable jackpot for teams like the Ducks with profits ranging from $400,000 to $700,000 per game.

May 08, 1997|ROBYN NORWOOD | TIMES STAFF WRITER

For NHL owners, it's not just the playoffs.

It's the Stanley Cup payoffs.

Many NHL teams make profits of $400,000 to $700,000 a game during the postseason, and the Mighty Ducks will add at least a couple of million dollars to their already robust bottom line even if tonight is their last game at the Pond of Anaheim.

That's good news for Duck fans only if they also happen to be Walt Disney Co. shareholders. Although part of the playoff windfall will pay for new contracts for Paul Kariya and Guy Hebert, club President Tony Tavares said it won't drastically change the Ducks' approach to their payroll or the free-agent market.

"It should be run like a business," Tavares said. "It's not about profits, it's about success and not being stupid when you have an opportunity to make money.

"When I think about the playoffs, I don't think about profit and loss. To me, it's hockey that's most important. . . . I don't want to be arrogant, but for our organization, it is such an insignificant amount to the Walt Disney Co., it's not a factor."

The main reasons for the playoff bonanza are increased gate and arena revenue--the Ducks' playoff ticket prices increased $4 to $10 a seat--and limited additional costs.

Player salaries, for example, are paid only during the regular season.

Their compensation for up to two months of additional work is in the form of playoff shares from the $7-million NHL pool, under terms negotiated by the NHL Players Assn. in the collective bargaining agreement.

Colorado Avalanche players received about $70,000 each for winning the Stanley Cup last season, but players whose teams were eliminated in the first round made only about $7,000.

The Ducks' highest-paid player, Teemu Selanne, makes $2.85 million--about $35,000 a game during the regular season. But if the Ducks are swept in the second round, he'll have made less than $1,500 a game during the playoffs.

"Particularly in hockey and basketball, the playoffs are very important to the bottom line," said Michael Ozanian, a deputy editor of Financial World magazine, which publishes annual assessments of the value and profitability of sports franchises.

"Most of the costs are fixed, and if you've got a good arena situation like they have in Anaheim, you're probably talking about an operating profit of three times or four times what you make a game during the regular season."

In cities such as Edmonton, making the playoffs can be a factor in the team's survival.

"What it will do is cut our losses," said Glen Sather, president and general manager of the Oilers, who also reached the second round.

Making the postseason will also help keep the Oilers from losing the NHL subsidy they received last year as Canadian currency equalization. Edmonton qualified for a $1.67-million subsidy this season when it reached the 13,000 season-ticket requirement at the last hour, and those seats might not have sold next season if the team didn't make the playoffs.

"This helps make this market start to come alive again," Sather said.

Said Tavares: "For Edmonton, it could be the difference between making money and losing money. . . . A million dollars is much more significant to [Oiler owner] Peter Pocklington than it is to the Walt Disney Co., as far as the bottom line."

The Ducks could make even more money in the playoffs if they were as aggressive as some NHL teams in postseason ticket pricing, or had a more lucrative local television deal.

"On ticket pricing, we were modest," Tavares said. "We don't feel it's proper gouging our fans, for what--to make another $150,000 a game?"

As far as television revenue, they are the new team in a crowded market and don't receive the six-figure television revenues teams such as the New York Rangers and Philadelphia Flyers might earn.

On the other hand, the Ducks have a very modest payroll, in the bottom fifth of the NHL at about $16 million.

Tavares defends the low payroll, questioning whether the Ducks would go further in the playoffs if they spent more on salaries.

"My payroll was low because I had [Kariya] in his first contract," Tavares said. "My point is if you look at the payroll, if we just do what we have to do [by re-signing Kariya and Hebert], I know we'll be in the middle of the league. That's making no changes. Am I a better team for being in the middle of the league in payroll?"

Bottom line aside, the Ducks' biggest bonus because of the postseason might be the exposure the team has earned. Besides national television broadcasts, they got more attention from local TV sportscasts that rarely send crews out during the regular season, and the Ducks were on the front page of newspapers for weeks.

"I can't measure the impact on the value of the franchise, how the franchise is perceived," Tavares said.

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