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VOL. 41 | NO. 25 | Friday, June 23, 2017

Losing the Cup a big win for Preds fans

Up to $30M in extra revenue could bolster future rosters, fund more rinks

By John Glennon

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The Nashville Predators’ unprecedented run to the Stanley Cup Final was gold for the franchise in more ways than one.

In two months of postseason hockey, the Predators played 11 home playoff games, almost two times the team’s previous single-season record.

The Preds participated in four separate playoff series for the first time in franchise history, meaning the team reaped the full reward of pro sports’ common practice of ticket-price increases during every round.

All those home playoff contests – and the incredible buzz the Preds created in their lengthy postseason journey – also meant more opportunities to rake in revenue on merchandise and memorabilia.

What’s the bottom line?

Sources familiar with the process offered varying estimates on what the Preds made in revenue in each round, ranging from $1.2-$1.5 million for first-round games against Chicago to $3 million for games in later rounds. The rising total makes sense, given the increased price tag for each successive round.

That’s in line with Forbes magazine’s estimate that the Pittsburgh Penguins’ run to the 2015-16 Stanley Cup – which featured 13 home dates – made the team more than $30 million in gate revenue alone.

Of course, under the terms of the NHL’s collective bargaining agreement, all teams contribute 35 percent of their home-game playoff revenue to a league-wide player pool.

The Predators’ playoff haul is likely to be distributed in a variety of ways – including player salaries, Bridgestone Arena renovation, the building of new community hockey rinks, increased marketing and helping to reimburse a local ownership group that stepped forward during lean times.

“I think the (playoff-run revenue) is certainly a boon for the bottom line for this year,” Forbes senior editor Kurt Badenhausen says. “But more importantly for the franchise as a whole is what it does looking forward, particularly for a small-market team.

“There should be an awful lot of energy in the building next year. I think the people selling sponsorships, premium seats and tickets are going to be in a real nice position moving forward. They should have some good pricing flexibility.”

Players and paychecks

It’s easy to assume the Predators’ playoff revenue would go directly to player payroll.

After all, two of the team’s first-line players – play-making center Ryan Johansen and goal-scoring wing Viktor Arvidsson – are restricted free agents in need of new contracts. Hard-hitting forward Austin Watson is in the same boat, and if team captain Mike Fisher decides to continue playing, he’ll need a new deal as well.

But the Predators say they were not dependent on this unexpectedly long postseason run to keep their top players under contract. That shows how much times have changed from a decade ago, when the instability and money woes of previous ownership led to the Preds losing stars like Tomas Vokoun, Scott Hartnell and Kimmo Timonen in a single offseason.

“Even if we’d been eliminated in the first round or didn’t make the playoffs at all this year, it wouldn’t have changed the financial resources available to (general manager) David Poile,” says Sean Henry, Predators president and CEO. “That world stopped a few years ago when (Predators co-owner) Tom Cigarran was made chairman.”

The Predators have proven as much in recent years, re-signing a number of their top players – such as Filip Forsberg, Pekka Rinne, Mattias Ekholm, Roman Josi and Ryan Ellis to multi-year deals on the current ownership’s watch.

Nashville Predators players jump onto the ice to celebrate after beating the Anaheim Ducks in Game 6 of the Western Conference final to secure the franchise its first-ever slot in the Stanley Cup Finals. The Preds eventually lost in six games to the defending champion Pittsburgh Penguins.

-- Ap Photo/Mark Humphrey

“As far as resources, the new ownership that came in seven years ago has given me everything I’ve needed to put a competitive team on the ice,” Poile points out. “I don’t think we have any of what I’ll refer to as ‘old issues’ about our franchise, from the extreme of losing a player to moving. I think that is way, way in the past tense.”

Where some of the Preds’ extra playoff money could prove valuable is if the team believes it needs to dip into the unrestricted free-agent market this year or next. But with a large number of young core players either already under contract or soon expected to be – and with Nashville moving closer to the salary-cap ceiling ­– it doesn’t look like the Predators will have to rely much on that approach.

‘Breakthrough’

One way the new playoff revenue might make an impact is in refurbishing Bridgestone Arena, which opened in 1996.

On a smaller scale, those changes could include things like expanding and improving the team’s locker room or adding to the resources available to Predators players.

On a larger scale?

“It’s not a matter of, ‘Are we going to do a major renovation or not?’” Henry says “We’re going to be doing a major renovation. We’ll have a 10-year plan and we look forward to bringing that to light.”

The Predators have also committed to bringing a new community ice rink to Bellevue, a move made in partnership with Metro Nashville. It’s the second such development for the Predators – following the Ford Ice Center in Antioch – and there could be more in the works around the area.

“I think you can see they’ve been aggressive investing in local programs – trying to build out rinks, practice facilities and that sort of thing,” explains Ian Thomas, who covers the NHL for SportsBusiness Journal. “In general, that metropolitan area is pretty underserved for ice hockey rinks compared to other NHL markets.

“So I wouldn’t be surprised if they push forward on opportunities now that they have a little extra capital.”

The Preds’ ownership group should benefit directly from playoff money, as well, since – in the estimation of both Forbes and SportsBusiness Daily – this season represented a breakthrough.

“This is the first year that they’re generating enough revenue to turn a profit,” Thomas says, “not essentially breaking even or taking a slight loss.”

‘Pricing power’

The Predators’ most significant economic gains from the playoff run may actually lie ahead.

The Preds finished the 2016-17 season with a season ticket base of about 10,000. Henry says that should increase 30 percent to about 13,000 for the coming season.

That means fewer single-game tickets will be available, driving up their value.

Season-ticket prices were actually set back in February when renewals were sent out, with prices increasing in some areas of the arena and staying flat in others.

Single-game tickets won’t go on sale until mid-August, so there would appear to be more opportunity for a price increase in that category.

“I think what happens now is you have so much more pricing power, not just with tickets, but also with things like sponsorships and premium seating,” Badenhausen points out. “From that standpoint it’s a tremendous advantage.”

Adds Thomas: “I wouldn’t expect them to do something drastic (in regards to ticket prices). They’ve been pretty adamant about keeping their prices low.

“But they saw the demand for tickets and they saw the secondary-market prices during the playoffs.”

The Predators also smashed television ratings time and time again during the playoffs, increasing their base in the Midstate and drawing big numbers in Knoxville, Memphis and neighboring states.

Those numbers should give the Preds better leverage in dealing with both their broadcast partners and advertisers.

“There’s just more excitement around the team – more eyeballs, more interests, more demand,” Thomas says.

“If you’re pitching an investment in the Nashville Predators, whether it’s to someone planting down money for season tickets or a company sponsoring them, it’s hard to give a better case study than what went on these last few months.”

Reach John Glennon at glennonsports@gmail.com and follow him on Twitter @glennonsports.