One of the arguments we've had is whether or not the owners undertake any risk by operation their hockey teams. I submit that they do not. If you look at who owns the teams in the NHL, there is virtually no one whose livelihood depends on the success of their team. The only person whose money doesn't come from some multi-million or billion dollar enterprise is Mario Lemieux who co-owns the Pittsburgh Penguins. Otherwise, every team is owned by a multimillionaire or billionaire, or a conglomeration of them in some manner.
This caused me to start playing with some numbers, and I wanted to see the kind of money that Mike Ilitch has and has locked up in his Detroit Red Wings. And it started to get interesting. Check it out.
In 1982, Mike Ilitch bought the Detroit Red Wings for $8 million dollars. Good chunk of money. If we adjust that for inflation using a website that does all the hard work for me, we discover that $8 million dollars in 1982 is roughly the equivalent of roughly $17.8 million dollars. It ends up with a lot of numbers and a decimal so I'm rounding.
Forbes Magazine estimate the values of NHL teams. It's an estimate, since the NHL won't release the exact numbers. But seeing as that's one of our best guesses, we're going to use that. In 2010, Forbes estimated that the Detroit Red Wings were worth $300 million dollars. Mike Ilitch's worth is valued at somewhere around $1.7 Billion dollars, earning him the spot as the 238th richest person in the United States and thus allowing me to picture him as Scrooge McDuck.
|This is why Josh Howard should do the photoshopping|
Well, if we go with the number adjusted for inflation, $17.8 million, in 30 years Mike Ilitch has earned a return of 1,685% on his investment, an average of about 56% a year, or $10 million dollars. If you go with the non-adjusted number, it's about a 3,750% return on his investment, or an average of 125% a year. He didn't earn those exact numbers every year. I'm sure in years they won the Cup he made a shit ton of money, and in those Dead Things years, it was less prosperous. Plus the seasons cancelled in part or in total due to work stoppages or lockouts.
But still. That is a ridiculous amount of money and a ridiculous return on his investment. But it still means that the Red Wings only account for about 18% of his total net worth. Assuming he sells the team for $300 million, and I'm betting he could get WAY more money than that for the Red Wings, he would have had to have lost $9.773 million dollars per year in order to just break even. As long as he only lost $8 million a year, he would still turn a profit from selling the Red Wings at $300 million.
And just how much money is $300 million dollars? I'll let The Triple Deke explain it:
The point is, to anyone who supports the owners and think they struggle more economically than the players do: no they don't.