Forbes Values Jets at $358 Million

[The Unknown Poster]

http://www.forbes.com/teams/winnipeg-jets/
 

Jets rank 20th in NHL teams.

 

I know the NHL always craps all over the Forbes report but its very interesting nontheless.  A couple of takeaways:

 

- Huge increase in value of the Jets from the purchase price of $170 million.  No wonder David Thomson was willing to write a big cheque.

 

- Article lists Jets' operating income at $3.3 million which shows the razor thing margins for the team although it lists the Coyotes with an operating income of only -$4.6 million which isnt close to their losses.  Am I just not understanding what operating income is?

 

- Article sort of craps on the venue in the sense it says the team has no concert revenue to speak of whereas MTSC has long been one of the busiest venues in North America.

 

[Rich]

According to that article operating income means:

 

1. Earnings before interest, taxes, depreciation and amortization.

 

I find it hard to believe that their operating income is so low.  Does that take into account concession and merchandise sales?  Just ticket sales?

 

The mention of not much in the way of concert revenue makes me question all of their numbers.  Also the premise that a building needs an NBA tenant to be profitable.  I also question whether or not the Jets need to make the playoffs to make a profit.  We aren't a cap team at all.

[Rich]

It is interesting that the revenue is listed at $102M and player expenses at $62M

 

So if our operating income is only 3.3M, what are we spending the other $36.7M on?

 

Coaches, GM, travel, minor league expenses, scouting.  That can't all be that much.

 

The only possible big expense that can contribute to that is debt repayment.  Not sure how much they owe on the team or arena, but that is a bug chunk of money.

[FrostyWinnipeg]

Valued at 358m. 1.5b if you're Steve Ballmer.

[The Unknown Poster]

Yeah interesting numbers.  Some people seem to live and die by Forbes, others not.  They seem to have a paint by numbers approach that might not work for all teams.

 

Good point about where the revenue comes from.  Perhaps they count building generated revenue as not part of the operations of the team.  Then consessions etc would not factor into that maybe?  Didnt the Jets themselves say they made $15 million last year (or at least I recall reading that locally).

 

Id also be interested to know where the debt comes from.  If I recall, the building is paid for.  The initial $170 million for the team could account for it.  Im curious how the owners handled that.  Did Thomson write a $170m cheque (which is how it was often presented) and is he being paid back? Did he loan the company the money?  Probably not important, but curious.

 

if the Jets only made $3 million, they lost money because they spent more than that on MTSC improvments, no?  So I dont buy those numbers.  They must have a narrow definition of operating income which doesnt include all of True North's revenue streams.

[Rich]

Yeah interesting numbers.  Some people seem to live and die by Forbes, others not.  They seem to have a paint by numbers approach that might not work for all teams.

 

Good point about where the revenue comes from.  Perhaps they count building generated revenue as not part of the operations of the team.  Then consessions etc would not factor into that maybe?  Didnt the Jets themselves say they made $15 million last year (or at least I recall reading that locally).

 

Id also be interested to know where the debt comes from.  If I recall, the building is paid for.  The initial $170 million for the team could account for it.  Im curious how the owners handled that.  Did Thomson write a $170m cheque (which is how it was often presented) and is he being paid back? Did he loan the company the money?  Probably not important, but curious.

 

if the Jets only made $3 million, they lost money because they spent more than that on MTSC improvments, no?  So I dont buy those numbers.  They must have a narrow definition of operating income which doesnt include all of True North's revenue streams.

 

And to be fair, as I think about it.  If True North ever sold the Jets, no guarantee all of their revenue streams would be sold with it.  If they moved cities for example, the concert revenue, government gaming revenue, etc wouldn't move with the Jets.

 

It is an arbitrary assessment.  No one really knows the finances other then True North and the NHL (depending on what they need to know for Cap revenues).

[The Unknown Poster]

 

Yeah interesting numbers.  Some people seem to live and die by Forbes, others not.  They seem to have a paint by numbers approach that might not work for all teams.

 

Good point about where the revenue comes from.  Perhaps they count building generated revenue as not part of the operations of the team.  Then consessions etc would not factor into that maybe?  Didnt the Jets themselves say they made $15 million last year (or at least I recall reading that locally).

 

Id also be interested to know where the debt comes from.  If I recall, the building is paid for.  The initial $170 million for the team could account for it.  Im curious how the owners handled that.  Did Thomson write a $170m cheque (which is how it was often presented) and is he being paid back? Did he loan the company the money?  Probably not important, but curious.

 

if the Jets only made $3 million, they lost money because they spent more than that on MTSC improvments, no?  So I dont buy those numbers.  They must have a narrow definition of operating income which doesnt include all of True North's revenue streams.

 

And to be fair, as I think about it.  If True North ever sold the Jets, no guarantee all of their revenue streams would be sold with it.  If they moved cities for example, the concert revenue, government gaming revenue, etc wouldn't move with the Jets.

 

It is an arbitrary assessment.  No one really knows the finances other then True North and the NHL (depending on what they need to know for Cap revenues).

 

True and good points.  if its based solely on what the team directly generates, then so be it.  At that level, $3.3 million is good because it will surely indicate that they make a hell of a lot more profit.  I'd assume it doesnt take into account the VLT money either.

[mbrg]

Id also be interested to know where the debt comes from.

 

They still owe Noel $130 million.