Forbes: Losses less than half what league claims
NEW YORK -- The NHL suffered less than half the losses it has claimed the past two years, according to a report in Forbes Magazine.
In an article in its Nov. 29 edition, the business magazine -- which did not have access to all of the 30 teams' financial records -- estimates the NHL lost a combined $96 million last season, not $224 million as reported by the league.
For the 2002-03 season, in which the NHL stated losses of $273 million, Forbes estimates they were actually about $123 million.
The discrepancy occurred because several NHL teams aren't accounting for all their revenue, Forbes reported. The magazine said the NHL included only half of the $17 million the New York Islanders got last year for cable broadcasts, for example.
William Wirtz, who owns the Chicago Blackhawks, also owns half of the United Center, where the team plays. Forbes said that the arena's 212 suites pulled in $15 million last season, money that wasn't included in the league's numbers. The United Center is a separate corporate entity from the Blackhawks, the magazine reported.
"The Forbes article is factually inaccurate in numerous respects and is not based on any of the actual information that would be needed to support its claims," Bill Daly, the NHL's chief legal officer, told The Canadian Press on Friday. "It is nothing short of irresponsible journalism."
The great losses are why the NHL is shut down now by a lockout, imposed by commissioner Gary Bettman in September following the expiration of the collective bargaining agreement with the players association. Through Friday, 200 regular-season games and the All-Star Game were called off.
Bettman has vowed to get "cost certainty" for clubs, a term the NHLPA says is tantamount to a salary cap and a solution it refuses to accept. The players association countered with a luxury tax proposal, but that was rejected by the league during the previous negotiating session on Sept. 9.
"Forbes' report and conclusions on NHL finances make it very clear the NHL should be negotiating off of our proposals rather than shutting down the game to try to get a salary cap system," Ted Saskin, the NHLPA senior director, said in a statement.
The NHL stands by its numbers, pointing to the league-commissioned audit by former Securities & Exchange Commission chairman Arthur Levitt. Levitt's study found NHL clubs lost $273 million in 2002-03.
Forbes says it spoke with bankers, broadcast sources and league sources while studying arena leases, ticket sales and prices.
"Forbes is a highly respected publication by everyone in business, including NHL owners and their investment bankers who use Forbes' analysis and valuations when they buy and sell teams," Saskin said. "The independence and the integrity of Forbes is unquestionable."
The NHLPA has long maintained that it believed the league was exaggerating its losses, which is a big reason collective bargaining has ceased. The lockout is in its eighth week with no meetings scheduled.
"It is no surprise that Forbes found the NHL has vastly overstated its losses by not including all of the revenues earned by NHL teams," Saskin said. "We agree with Forbes' conclusion that the NHL should show more transparency and disclose all of an owners' sources of revenue in their financial reporting. We have been saying the same thing for many years."
Copyright 2004 by The Associated Press
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