Image via Wikipedia
In 2008, the Sabres lost approximately $9M. In 2007, they lost $5M. Indeed, since Golisano has owned the Sabres, the team has lost $19M. Their only profitable year in the past decade - 2006 - provided the Sabres with a $5M profit. Over the past 9 seasons, the Sabres have lost a total of $60M according to Forbes analysis. Now, how a for-profit entity consistently losing money can be worth $169M is an intersting economic question. Indeed, the Sabres are valued at nearly the exact same amount as the Edmonton Oilers. The Oilers, according to Forbes, are worth $175M but they have posted profits in 7 of the past 9 seasons and, over that period, have earned $45M. So over the past decade, the Oilers have made $45M and are worth $175M while the Sabres have lost $60M and are worth $169M? Must be the new math.
Much of the disparity between the profitability of the Oilers and the Sabres is explained by the average ticket price. Edmonton's average ticket goes for $62 while the average Sabres ticket sells for $33. If the Sabres were able to sell their tickets for the same average price as the Edmonton Oilers, they'd generate an incremental $20M+ in annaul revenues - ensuring a substantial profit every year.
The Sabres ticket prices are lower than almost every other NHL team, and, not coincidentally, season tickets are 'sold out' as they are capped at 14,825. Given that the team is losing money and season tickets are sold out at current prices, it seems clear that the Sabres have underpriced their tickets. Of course, Buffalonians should want the Sabres to be as economically healthy as possible to ensure the long-term health of the franchise.
So, if we all believe the Forbes analysis, shouldn't we want the Sabres to raise ticket prices?
Entry image courtesy of Faceoff.com
They lost that money on "hockey operations." My understanding is that doesn't include advertising sales, merchandise sales, and perhaps media revenue. It also doesn't include the Bandits, which are also a part of that package - which I imagine are probably running a pretty good profit, selling between 15,000 - sell out for most games, with the average player making somewhere around 18,000.
My impression is that, post lockout - they're doing just fine. I'm pretty sure I've heard Golisano say they make money annually.