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Caps' Revenue Is Up

Tarik El-Bashir reports:

The NHL, its sponsors and the league's television partners all stand to benefit from Alex Ovechkin and the Capitals reaching the second round. But so does the team's bottom line, according to club president Dick Patrick.

With four home games in the opening round, the Capitals anticipate turning a profit of between $400,000-$500,000, Patrick said. Those figures are after the team returned an estimated 60-65 percent of its gross ticket sales revenue to the league, which redistributes the money to the revenue sharing program and to players' postseason bonuses. The Capitals are among the teams that benefit from revenue sharing.

Patrick estimates those figures will continue to grow because ticket prices are higher in the playoffs. Tickets purchased at the gate and season ticket holder prices increase roughly 20 percent per round. Patrick also said profits will be up this round because one-time expenditures such as the printing of tickets, media guides and video production costs were paid for last month.

If the Capitals play three or four homes games against the Penguins, Patrick said, the team could earn another $800,000-$1 million.

But even if the Capitals were to win the Stanley Cup, Patrick estimates the Capitals would still lose money this season because the team's average ticket price ranks in the bottom third of the league.

"But that's something we're hoping to change in the future," Patrick said. "The plan is not to lose money, but that's the reality right now."

By Lindsay Applebaum  |  April 30, 2009; 7:21 PM ET
 
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Comments

"But that's something we're hoping to change in the future."

Not a surprise, but here come the ticket price hikes!

Posted by: washcaps | April 30, 2009 7:30 PM | Report abuse

Exactly -- nice way to reward your fans!

And I do not believe that the Caps ticket prices are lower -- I bought Flyers tickets cheaper than Caps tickets this past regular season.

Didn't realize Gordon Gecko had replaced George McPhee as GM. Guess I'll just stay home and watch Caps games on "Center Ice."

Posted by: bucknelldad | April 30, 2009 7:36 PM | Report abuse

I think he was referring to being an unprofitable team, not necessarily raising prices (though that will happen)

Posted by: QuintenD | April 30, 2009 7:40 PM | Report abuse

Disclaimer: i watch the same things you guys and gals watch, and am as far from professional as a paycheck can take me-

I think Greens injured, I think its his right arm/hand/wrist, and if you look closely at the last game, or just the 3rd period, you'll see why I think that.

You can't play like Ovechkin, the heavy minutes, the relentless checking, the 82 season grind, and expect to be healthy come April. Someone brought up Drury and Richards being injured and still playing; yes, they were and did. But those teams are gone now, so that comparison is yucky. I remember Yzerman winning the Cup with one leg. I remember countless injuries.

I say this, and I mean to because its something that should be discussed rationally (see disclaimer): 82 games is too many. Its a tough, tough sport and its physical toll is immense. They play 17 football games for a reason. Could you imagine the amount if injuries if there were 40 football games? There is no reason for the playoffs to go from April through June. There's no ice in summer. Reduce the amount of games and have better playoff series. The first half of the season is slow anyway. Whachall think?

Posted by: oo7 | April 30, 2009 7:41 PM | Report abuse

These playoff tickets are considered cheap? Center ice in the 400 nosebleeds are $78 a piece (I can't imagine what people in the lower levels pay, some people must have to much money -- but that's another tangent). I'm 100% content watching the game on TV with my frig full of beer and my pajama pants on. Just think about that when you raise your ticket prices.

Posted by: ejohnsto | April 30, 2009 7:48 PM | Report abuse

17 football games?

Posted by: Moose33 | April 30, 2009 7:50 PM | Report abuse

I agree that 82 games is way to much. Could you imagine how well these players would play if they only played 40 games? Winning a game would be so much more meaningful and the players would be in better condition to play some excellent hockey.

Posted by: ejohnsto | April 30, 2009 7:52 PM | Report abuse

How do you turn a profit and still lose money?

Am I missing something?

Posted by: ThisGuy | April 30, 2009 8:01 PM | Report abuse

Game amount is never changing. Maybe to 80, but less is impossible.

NHL teams makes their money from the gate. With some people already complaining about the ticket prices, how much do you think a ticket would cost if there were only 20 home games?

NFL has the advantage of having all salaries paid by the first week from the TV contract. Also instead of 18,000 people at a game they have 50 or 60,000.

So 82 games are here for good.

Posted by: hardyboys0 | April 30, 2009 8:02 PM | Report abuse

I think 40 is too short. Maybe somewhere in the high 60s. Remember, we need all 82 games last year to secure a playoff spot. The season has to be long enough that the cream rises to the top.

Posted by: Moose33 | April 30, 2009 8:03 PM | Report abuse

Thisguy: Losing money= not turning a BIGGER profit.

Posted by: bulldog23 | April 30, 2009 8:07 PM | Report abuse

I agree with shortening playoffs.
I also agree that something is wrong with 52, so I wonder why he's getting so much ice time? Aside from the games, he has looked awful in post-game interviews.

Here's hoping that the whole team gets rested and well by Saturday.

As for ticket prices, I know I am spending way too much, but Tuesday night was more than priceless; it was the single best event I have ever attended.
Lets Go Caps

Posted by: bluejeener1 | April 30, 2009 8:19 PM | Report abuse

Very confusing the way it's written.

I think it means profit of 400K or 1M per playoff round, but still a net loss over the season.

Posted by: VladG | April 30, 2009 8:26 PM | Report abuse

Remember - Caps get no revenue from suites.
Those go to the Godfather.

Posted by: Rocc00 | April 30, 2009 8:29 PM | Report abuse

Yeah very confusing, it says they are making a profit but then says even if they make the Cup finals they won't, huh????

They can't shorten the season. Reason is that is how they make money. 41 home games every year. If they only had 20 we'd have to pay twice as much for each ticket or their salaries would have to take a big hit and I dont think they want that.

Posted by: alagarts | April 30, 2009 9:09 PM | Report abuse

Remember - Caps get no revenue from suites.
Those go to the Godfather.

Posted by: Rocc00 | April 30, 2009 8:29 PM

Lincoln Holdings owns the Caps and owns part of Washington Sports, i.e. the arena, ticketmaster, Wizards, etc. So we will never know what the true accounting for the franchise is. So Lincoln Holdings gets a portion of the suite profits and once the godfather passes they will get it all, but it doesn't technically go to the Capitals as an entity. In other words, lots of moving money from one pocket to another.

Posted by: freakinandpeakin | April 30, 2009 9:13 PM | Report abuse

*correction, 16 games and one bye week. forgot about hte bye week, where a team gets almost 2 weeks to rest and heal.

I understand that prices would be higher, and the game only supports 18000 people approx, but regardless, if you need to have 82 games just to make a profit, maybe, somethings out of whack.

Posted by: oo7 | April 30, 2009 9:21 PM | Report abuse

The Caps are always going to have trouble turning a profit, because they are tenants at Verizon Center. This means they get no money off concessions or the suites (as was mentioned earlier). The question I have is, when Abe eventually sells the Wizards to Ted, is Ted also buying the arena?

Posted by: goskins1982 | April 30, 2009 9:22 PM | Report abuse

It is amazing what happens in this town when you put a winner on the ice / field. The lerners need to take Leonsis 101. Let's Go Caps!

Posted by: mjwies11 | April 30, 2009 9:22 PM | Report abuse

We should get red towels... those white towels in Vancouver look awesome.

Posted by: rachel216 | April 30, 2009 9:43 PM | Report abuse

@oo7:
well the big thing out of whack is I don't think other sports depend so much on tickets as hockey. Hockey pretty much has no TV revenue to speak of. Football for example can probably just live off of TV.

Posted by: alagarts | April 30, 2009 9:54 PM | Report abuse

Please remember one thing even though the Caps as an organization or corporation may lose money, Ted owns 44% percent of VC also. So he takes out of one pocket and puts it into another pocket. Yes Abe takes money for rent, concessions etc but Ted gets 44% back as a owner there. So the loses are not as bad as made out to be. I hope that makes some sense.

Posted by: RichC3 | April 30, 2009 10:24 PM | Report abuse

@freak you posted as I was writing.

Posted by: RichC3 | April 30, 2009 10:26 PM | Report abuse

Looking forward to the Caps and Pens. Hopefully, Ovi, Green, and the rest of the guys will be healthy and rested up for this series. It will be a good series. Caps, you must win it and exorcise many demons.

Posted by: CapsFan75 | April 30, 2009 10:41 PM | Report abuse

Vancouver, and Luongo, are continuing their dominance 2 periods in. yikes. It's gonna take some time for Chicago to figure Lupngo out, if that's possible.

Posted by: oo7 | April 30, 2009 10:50 PM | Report abuse

How the heck are our prices at the bottom third of the league???? Lower level tickets are more than lower level skins tickets.

Posted by: buryyourduke | April 30, 2009 11:04 PM | Report abuse

OK, is it just me, or are the Domino's Bread Bowl Pasta commercials just... disturbing?

I suppose it could be worse... it could be a singing fish.

And yeah, oo7 - Vancouver is *slamming* Chicago - and Chicago just cannot stay out of the box. They've had TWO double minors for hi-sticking *THE SAME GUY!* His poor face!

The Sedin twins are just *sick* on the same line. I swear, they're telepathic.

3-1 Vancouver on a Patrick Kane goal... this is getting interesting!

Posted by: irockthered | April 30, 2009 11:06 PM | Report abuse

As clarification, the story says ticket prices are in the bottom third (10 teams) in the league, not the lowest.

In terms of playoff ticket prices. As a comparison, the tickets I had at MSG for the first round were equivalent to lower level at VC and about 10 rows off the ice. They were also on the end the visitors shoot at twice and those tickets went for $245 each.

Luckily I got them for free so I did not break the bank.

Posted by: CTCapsPhan | April 30, 2009 11:08 PM | Report abuse

This article makes no sense. Are the Capitals profitable or aren't they? The second paragraph says they anticipate turning a profit, the last says they estimate they'll still lose money.

Posted by: ChoppinBroccoli | April 30, 2009 11:11 PM | Report abuse

Holy chrome! It's 3-3! Vancouver's falling apart in the third frame like WOAH.

Posted by: irockthered | April 30, 2009 11:28 PM | Report abuse

The references to profits refer to per-round profits. The references to losing money refer to the entire season.

By the way, especially for those Caps fans outside the DC area, I just read NBC has released its contingency plans for Game 1, given that the Kentucky Derby is schedule for right afterwards. I am not totally sure this is accurate, but this says that if you are outside the DC and Pittsburgh areas NBC would show up to one full overtime period if necessary and if more time is needed coverage would shift to Versus. I assume this means that if you are in the DC and Pittsburgh areas, NBC will actually show the entire game and ignore the Kentucky Derby, if necessary.

http://sports.yahoo.com/nhl/blog/puck_daddy/post/NBC-unveils-Kentucky-Derby-contingency-plan-for-?urn=nhl,160017

Posted by: youaresquishy | April 30, 2009 11:30 PM | Report abuse

well, irock, looks like the Hawks figured luongo out between periods, huh! 3 goals to tie it up. Vancouver thought huey had the cat in the bag. Man, good game!

Posted by: oo7 | April 30, 2009 11:31 PM | Report abuse

they, not huey. wtf

Posted by: oo7 | April 30, 2009 11:33 PM | Report abuse

that pinch didn't work out for Chicago at all. bad idea. odd man rush will kill you...

Posted by: oo7 | April 30, 2009 11:37 PM | Report abuse

Jeez, I leave the game for an hour and it goes from 3-0 to 3-3. Now I'm game for a long OT cause I have to work 3rd shift tonight and the Hawks give it up again. What a tease. WTF happened in that hour???

Posted by: JS26121820 | April 30, 2009 11:43 PM | Report abuse

That was a brutal rebound, Bulin

Posted by: JS26121820 | April 30, 2009 11:47 PM | Report abuse

it was a pretty intense 3rd period. Chicago generated traffic, went to the net, and jumped on the rebounds. they looked like they were going to take it but pressed too hard with 2 minutes to go and gave up a 3-1 rush. Van remains undefeated. I was expecting OT, but Chicago owned the period and smelled blood so they tried to end it early. can't blame them, really.

Posted by: oo7 | April 30, 2009 11:50 PM | Report abuse

@Richc3 - I'm not so sure Ted is at 44%. I know what you're saying but I think the math is off. Yes in fact Lincoln Holdings owns VC, Ticketmaster etc but if I remember correctly Ted took LESS of an ownership stake in Lincoln Holdings in order to have "Right of 1st Refusal" once Abe passes on or sells it. Abe is the majority owner and all of his stakes would be going to Ted (if he exercises his option which he will). So it is true that Ted doesn't receive any revenues from concessions and club level seating etc and on top of that he does have to pay rent every time we open up the doors for hockey but it's still a major loss for him AT THIS POINT. I could be wrong in my math but I'm pretty sure his stake is far less (like 1/2 or less) of the 44% you're stating. Don't forget also that Ted has an ownership group of like 6 or 7 people and that could be the 44% you're speaking of. The bottom line is the only way for the Caps to become a true self sourced EBITDA positive enterprise is for the Caps to own the VC.

Posted by: pokerface1208 | April 30, 2009 11:53 PM | Report abuse

BTW - I fully intend on us kicking the snot out of the Pennsyltucky Penguins and moving on to the conference finals so revenues will be up! I know the NHL doesn't want it but I wouldn't mind seeing an all SE Division Conference Finals.

Posted by: pokerface1208 | April 30, 2009 11:55 PM | Report abuse

I saw on a replay the gamble by the Hawks you referred to, but it seems to me they would've been better served to sit back and be happy with OT. The Nucks would come into OT a little shell-shocked and be at a disadvantage, at least theoretically. Who knows.

Posted by: JS26121820 | April 30, 2009 11:57 PM | Report abuse

The Caps will of course steamroll the Flightless Flopping Fowl, so they can meet the Bruins (and I can get that sailboat!). Since Greenie likes to do things for his fans, i figured I'd write him this:

Dear Mike,

Since you helped out your friend's fantasy team, I figure you're a real nice guy willing to help a girl out. [ed--hmmmm, maybe not stated quite like that!] You see, I have a little bet going on: If the Caps beat the Bruins in the Eastern finals, I get a sail boat. I really want that boat. So, because you're that sort of guy, I just know that you'll destroy the Penguins and the Bruins, and in exchange, I'll even name the boat "The Hawk."

Posted by: RedBirdie | May 1, 2009 12:02 AM | Report abuse

@ oo7, if you're still up, referring to your point awhile earlier about shortening the NHL season, I'm in complete agreement theoretically but the NHL can't afford to shorten the season. Bettman hasn't been able to generate anywhere the TV revenue for the NHL that other commissioners have to supplement gate revenue. Theoretically, I like your idea though.

Just remember, 81 games would not have been enough for the Caps to take the SE last year!

Posted by: JS26121820 | May 1, 2009 12:02 AM | Report abuse

JS, I hear you. I keep beating that drum, that though!
as for Chicago sitting back a little, I hear you on that too. It's always better to end things as soon ad you can and reserve energy, but if you smell blood, why not keep surging forward? Van looked shaky. It was a bad bounce that killed them. I love Vancouver, great town, and I usually pull for them but Chicago is an exciting team to watch and it's hard not to root for them, sort of like how others feel about our Caps.
Ducks/Wings should be good too!

Posted by: oo7 | May 1, 2009 12:30 AM | Report abuse

Being in Milwaukee, we're supposed to hate all things Chicago. I will always dutifully hate the Cubs, but I do like the Hawks. This is tough series to call. I guess I'd take Vancouver in 7 cause of home ice. Kane and Toews make a really good foundation though. It wouldn't surprise me in the least to see the Hawks and Caps meet in a Cup finals or two in the next decade.

Posted by: JS26121820 | May 1, 2009 12:40 AM | Report abuse

So according to a quick google search, Lincoln Holdings owns 45 percent of Washington Sports and Entertainment which includes the Verizon Center, Wizards, Ticketmaster in DC and Baltimore and management of the Patriot Center and had revenues of 70 million in 2008.

Seems like a shell game to me with some fancy accounting going on.....any money the Caps do not get directly, goes into the mothership but it allows them to hide money from the NHL and revenue sharing.

Posted by: dusty123 | May 1, 2009 1:07 AM | Report abuse

I say this, and I mean to because its something that should be discussed rationally (see disclaimer): 82 games is too many. Its a tough, tough sport and its physical toll is immense. They play 17 football games for a reason. Could you imagine the amount if injuries if there were 40 football games? There is no reason for the playoffs to go from April through June. There's no ice in summer. Reduce the amount of games and have better playoff series. The first half of the season is slow anyway. Whachall think?

Posted by: oo7 | April 30, 2009 7:41 PM |

I disagree. :)

Posted by: richmondphil | May 1, 2009 2:50 AM | Report abuse

@Rachel216: They gave away red towels at VC prior to Game 1 vs. the Rangers.

I brought it for Game 2, as well.

We know how those games turned out.

I no longer own said towel.

Posted by: writered21 | May 1, 2009 8:17 AM | Report abuse

To those who are questioning how the article can say that they'll turn a profit but lose money:

I read it as "We can turn a profit for those games (i.e. the playoff games)" but at the end of the season, the team will be a money loser overall.

Posted by: VTDuffman | May 1, 2009 9:17 AM | Report abuse

The key for the Caps and the rest of the NHL is to find a way to market the game on TV. TV contracts are what will make the league and franchises profitable, not attendance.

Posted by: zyvo23 | May 1, 2009 11:05 AM | Report abuse

Hockey will not be as popular as it was in the 90's until hockey goes back on ESPN and is talked about on SportsCenter. Which means hockey would need Gary Thorne, Bill Clement, Keith Olberman and Dan Patrick back too.

Posted by: Kevin9149 | May 1, 2009 12:25 PM | Report abuse

We all need to be rooting for the Blackhawks, so that we can heckle Huet when we are playing them in the Stanley Cup Finals!

Posted by: ssm91470 | May 1, 2009 6:44 PM | Report abuse

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