- The Washington Times - Wednesday, April 12, 2000

Jim Rutherford, president and general manager for the Carolina Hurricanes, is not a happy man.

Rutherford sees a big hole in both the team's balance sheet and the excitement of his fan base after his team missed out on the Stanley Cup Playoffs despite having more wins than the Eastern Conference eighth seed, the Buffalo Sabres.

"We would have netted between $400,000 and $500,000 for each [home] playoff game based on our current attendance patterns," Rutherford said about a team that lost more than $15 million this season. "That's important, but even more critical is that being in a nontraditional hockey market, making the playoffs would have been a tremendous boost to both season ticket sales and our corporate sponsorship.

"We're still building a fan base, so it's kind of hard to put a value on all of that," he said.

The Hurricanes, however, are just one example of how important the Stanley Cup Playoffs are to a franchise's financial situation. After a six-month regular season filled with fiscal risk, owners enjoy an nine-week run with the numbers tilted in their favor.

Tickets cost more, and attendance and concession sales rise. Player salaries, paid out through league-run compensation pools, are much lower on a per-game average than during the regular season.

"For a substantial number of teams, the playoffs very simply mean the difference between a profit and loss for the year or between a deep loss and a much smaller one," said Drew Dorweiler, senior manager for Wise, Blackman, a Montreal-based consulting firm that has valued NHL teams. "Most teams budget for two or three home playoff games, but playing beyond that is often a big, big plus."

The Washington Capitals also hope for big things. The Caps are on track to lose about $10 million this season, but a Cup finals run, with a minimum of eight home games, would provide the team with at least another $4 million in income to cut into that loss.

"For the team fortunate enough to make it that far, it is a very meaningful event financially," Caps president Dick Patrick said. "It won't be quite so intensive early on for us because we've worked hard to keep the ticket prices low for the first two rounds.

"But you certainly do better the longer you go on, and you do better the longer each series goes on because the league takes its cut to pay its expenses and the players only from the first four games," Patrick said.

Perhaps the best thing financially about the playoffs is the improved control over salaries. During the regular season, teams routinely pay between 80 and 95 percent of their gross revenues in player costs. But in the playoffs, each player earns $9,500 in the first round, $16,500 in the second, $36,100 in the conference finals, $58,700 for a Stanley Cup finals loss and $85,700 for a Cup finals win.

The payoffs come from a league-run player compensation pool drawn from gate receipts. The league cut is about $200,000 a game for Games 1 through 4 in the first round and increases for each subsequent round.

Each player on a Cup champion receives $147,800 and will average at best $9,237.50 in salary a game. Caps goalie Olie Kolzig, with a $3 million annual salary, earns $36,583.37 a regular season game. Even players making the league average, a little less than half of Kolzig's pay, earn much more during the regular season than in the playoffs.

Most players also receive playoff bonuses from their teams as part of their contracts, but rarely does it match their regular season income on a per-game basis.

While teams gain additional ticket revenue from higher-priced seats and have more control over player costs, some expenses do go up substantially. Travel is the biggest increased expense. Charter flights rise in cost for all road trips because of the unpredictability of where and when upcoming games will be played. Each one-way charter trip can cost more than $50,000. And if a team owns its own plane, the tightness of the playoff schedule makes it more difficult to lease it out on off-days.

"It's a major, major expense," said Bill Tuele, spokesman for the Edmonton Oilers, who will make as many as three trips to Dallas in their first-round series against the Stars. "Not only that but you're bringing additional people with you when you travel, and lodging costs go up."

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