November 28 2012 04:05PM
As you all know by now, the Toronto Maple Leafs are worth $1-billion according to Forbes Magazine, who released their annual National Hockey League team valuations earlier on Wednesday.
These numbers are good as ballpark figures, used by Graphic Comments this summer when looking through the "winners" and "losers" of the 2005 lockout, but the figures are just estimates. The NHL shouldn't expect to release financial data (why should they). However, the $1-billion is probably pretty close. Forbes evaluates the Toronto Raptors at $384M, and together with the Maple Leafs and the rest of MLSE were sold for $1.32-billion this summer for approximately 80% of the shares. The enterprise value was listed at $2-billion. Generally, things are worth what you can pay for them.
So there's some realism in here. The Leafs aren't the first team to crack the billion-dollar valuation. 20 NFL teams and three MLB teams—the Yankees, Red Sox and Dodgers—all broke that. However, last January the Los Angeles Lakers found themselves worth a paltry $900M. The Lakers and Leafs have a lot of similarities, being a team with a massive national following in an otherwise local sport.
What gave the Leafs their ranking? Well, it helps that ticket prices are high and the fans are very forgiving:
The Toronto Maple Leafs landed third among the best fans despite having a streak of a different kind – eight years missing the playoffs. Sure, fans booed the team off the ice in late March of this latest season after a loss to the Carolina Hurricanes that mathematically eliminated them from contention. They paid heftily for the right to do so. The average ticket price last year was $123, the highest in the league by 50%, and 151% more than what it was at the start of the 2005-06 season. Even still, and despite being the league’s worst in terms of payroll dollars spent, the team has played to a full capacity crowd at Air Canada Centre all these seasons.
Not to confuse best fans with most foolish fans, but it is fans like the Leafs, whose loyalty helped their team triple in value to $1 billion… who certainly make it more comfortable for Bettman to sleep at night during the lockout.
Apparently Leafs fans' desire to keep returning to the team they love doesn't just impact the quality of the team, but apparentlythey've become the reason for the whole darned lockout. Rather, the Leafs and several other of the big market clubs. Forbes estimates that the top five most valuable teams, the Leafs, Rangers, Canadiens, Blackhawks and Bruins are worth about five times more on average than the Hurricanes, Islanders, Blue Jackets, Coyotes and Blues, the five lowest valued teams. Forbes cites the massive leverage a popular team like the Leafs hold in negotiating its broadcast deal, giving it a huge market advantage.
Looking at the breakdown on the left from the team profile page, Forbes' valuations favour the Leafs' market and stadium, not necessarily their brand or the sport the team plays. Hockey will, of course, always have a huge following in Greater Toronto and the Maple Leafs are ingrained in the culture here, but the tangible value of the stadium and the television market can be used for greater advantage by the owners of the team, Bell and Rogers.
Funny here, how a team can be the most valuable in its sport and simultaneously provide the least valuable fan experience, but, hey, here we are, depending on which website you read. The team page from Forbes lists the Leafs has having an operating income of $81.9M last season and revenue of $200M, $88M of that from gate receipts. Operating income has stayed relatively steady for the last five seasons, but the team took a huge step in overall value this year, like due to the sale to the telecom companies, who also gain "valuable programming for their sports channels".