April 28th, 2014
by athooks

What happens when you go all in and catch a bad beat? How do you bounce back? Or do you? Maybe it’s best to walk away completely.

First, a caveat:

If you were to plot Blues fandom on a chart with Towel Man being the x-axis and the guy who thinks St. Louis should get an NBA team instead of messing around with hockey as the y-axis, you’d find me probably somewhere in the 67% percentile.

While I’m not totally objective on Blues related matters, I think I’m also not so clouded by anger/depression/confusion that what I’m about to say is something I’ll retrospectively regret.

Sundays 5-1 beating was the worst loss in Blues franchise history.

Not one of the worst. THE worst. Here are some facts that we need to keep in mind when proving out this (admittedly awful to state) statement

1. The Blackhawks spent $1,538,730 more dollars on players in 2013/14 than the St. Louis Blues.  The Blues were roughly 5.4 million dollars away from having the largest payroll in the NHL (Pittsburgh 69.5 million).

2. The Blues have lost $67.6 million dollars since 2004-05.

3. The Blues are the 28th (out of 30) most valuable team in the NHL according to Forbes, worth $185 million dollars. They had an operating revenue of $72 million dollars last season and an operating loss of $2.5 million dollars.

4. When the Tom Stillman led ownership group bought the Blues in 2012, it was a complicated deal. They put in $70 million of equity and absorbed $60 million (estimated) in debt load. The original investors with the the Dave Checketts led group kept $40 million (estimated) in debt load. In short, the Blues weren’t a profitable venture when they were sold, lost money in 2012-13 and with another early playoff exit, will probably be in the red for 2013-14.

5. The Blues have up to 15 partial owners. I assume most will have thoughts about what to do with this franchise. I assume that all of those thoughts wont be on one end of the spectrum (re-load, let’s run this back) versus the other (tear-down, let’s make a profit).

6. The NBC TV deal with the NHL is for 2 billion dollars over 10 years and started in 2011. Before taxes, that’s around 6.7 million dollars per team per year from NBC. For perspective, the NBA gets about 1 billion dollars per year now and is in the midst of negotiating new pacts that will substantially increase that number. The NHL and NBA payrolls are roughly equivalent. The local TV rights deal for the Blues isn’t publicly available (as far as I could find), but the Cardinals get 27M per year from FSN for their TV rights currently, so a high estimate would be 13.5M per year, or half of the Cardinals fees. I would personally bet it’s lower.

7. Playoff wins are extremely important to NHL teams. Without access to the books, it’s hard to say exactly how much each win is worth, but research indicates that it’s about 250K per win on the low side and up to 1M per win on the high end. The latter claimed by the Maple Leafs who saw 11.7M over 3 rounds in 2001-02.

That is the known known.

The Blues are not a profitable enterprise. And even less so when they don’t get to collect extra gate from the playoffs. This is the second straight 1st round exit for the Blues with teams that were expected to do better. And more importantly, had ownership betting they would by spending more in the hopes of increased post-season results.

Losing money + losing games = inflection point.

Here we are. The Blues have an ownership group that is losing money. Probably more than they expected. They have the opportunity to try and spend more (signing goalie Ryan Miller) or spend less (trade some of the assets they have for draft picks).

Again, I can’t jump inside the brain of all of the owners. But if I’m in that boardroom I know that the guys that backed the ‘let’s go for it this year’ approach aren’t going to have the same juice as they did this time last year. Your financial advisor doesn’t try and hit you up for more money when he’s just lost your kid’s college fund in the latest stock bubble.

Hockey, just like whatever job you have right now, is a business. And while Tom Stillman might be an owner that’s passionate about the Blues, money ALWAYS wins. When you’re spending other people’s cash, it never lasts forever unless you’re paying it back with interest. In the upcoming weeks, the books will be tidied up and some of the Blues owners aren’t going to like what they see.

They won’t be passive.

In 2004-05, the season was cancelled due to a lockout. And from 2005-11, the Blues only made the playoffs one time. I think we forget how close the Blues were to being another city’s heartbreak. The fans were asked to endure that fallow time with the promise that they’d finally do this the “right” way. The young draft picks would eventually blossom into cost-efficient stars, then champs.

Turns out the “right way” isn’t so cut and dried. There is no linear path to success.

The Blues, like it or not, have backed themselves into a perilous corner. They threw away their best regular season (in terms of wins) with another 1st round collapse. The diehards will be back filling Scottrade center come October with the same vigor they always have.

The fair-weather Blues fans? They’re out.

It’s been since 2001 since the Blues had a deep playoff run. That’s 14 years ago. A generation has been born and raised on Cardinals championships. They’ve pushed the Rams to the edge of extinction with their apathy. And, now, in 2014 are slipping away from a connection with the Blues.

Why worry about a loser, when we’ve got a winner right up the street?

This new generation isn’t like you or your parents. They don’t have the time or the inclination to support things that don’t provide immediate gratification. The Blues? Just how gratified do you feel today?

Nope. They’re not buying the tickets.

Yet.

As more of the big time fans get disenchanted with the playoff losing, the Blues will transition into re-build mode again. They’ll try to make this franchise turn a profit. And they’ll be doing this (again) in a time when they need to forge relationships with the next generation of ticket buyers that will sustain the NHL in St. Louis.

The ‘Cubs of Hockey’ just doesn’t market as well as #WeAllBleedBlue.

I’m rooting for the Blues to finally pay back all the years of frustration. I hope that everything I just wrote is way off-base. But when losing games means losing money, I can’t see a franchise doubling down after they just doubled down.

Even worse? The connections that this team in this town could have made with the people that they need to connect with are over. Don’t believe me? Check Twitter. They’ve moved on… it’s us OLD people that are still talking about the Blues today. It doesn’t hurt them because the Blues have never really mattered.

It was the least interesting game of the series. But it will turn out to be the most important. The 2013-14 Blues chose the path more traveled. The question is how passable it actually is.

Photo: SIUE

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