America and Canada are two nations that have over the years excelled in many kinds of sports. Hockey has its fair share of popularity in these two countries, thanks to its success over the years. The two nations have their very own hockey league known as the “National Hockey League” comprising of 31 teams. Over the years, the Pittsburgh Penguins team has proven to be the most valuable team in this league; both in terms of finances and success at the field. Let’s discover some of the reasons for this success.
What’s Their Plan of Course and Success?
Pittsburgh Penguins owners namely Mario Lemieux and Ron Burkle had an average 2016 season: their team managed to capture the franchise’s 4th Stanley Cup but the owners wanted to explore ways to increase equity. Therefore, they took the team off the market when they could not get anything near to the 740 million dollars valuation for the Penguins they were looking for.
Consolation prize? The 13 playoff matches played at P.P.G Paints Arena enabled the Penguins to generate 26 million dollars in the operating income, which were basically the earnings before interest, taxes, depreciation and amortization. The team ended up generating seventh-most highest income in the NHL and 26% more than the team raked in the previous season.
The Penguins showcase what is possible in the NHL, an elite, averaged market team that is majorly profitable. Increased profitability appears to be the trend for this league. During the 2015-16 season, it was observed that the league’s operating income was an average of 15 million dollars, similar to the prior season. The major reason for the increased profitability during
the past two seasons was due to the fact that relative to the overall revenue,the 14-15 season was the first league’s lower salary cap as part of the combined bargaining agreement . Additionally, it was the same period that the 12-year, 5.23 billion dollar (Canadian) media deal with Rogers Communications was underway.
Going by the changing fortunes of The Penguins, it is safe to admit that due to its successes alone, the league improved financially. Deals such as those signed with Major League Baseball Advanced Media, helped the NHL get a 400 million dollar expansion fee from the owners of the Vegas Golden Knights, who will become a part of the league for the season of 2017-18.
One question that the pundits are perhaps asking is, why couldn’t the managers of the Penguins get a better valuation for their team? First, it is important to note that the Penguins may have increased financially in the short term. Secondly NHL’s profits are yet depended on just a few teams. Some of these major players are the New York Rangers, Montreal Canadians and Toronto Maple Leafs who both had an operating income of 229 million dollars together during the 15-16 season, or 50% of the league’s total..