Devouring dollars the way Pac-Man swallows quarters, a National Hockey League team is hardly an ideal toy for someone without an unlimited bank account. A hockey team holds no guarantee for profit--only a guarantee for hefty expenditures.
For Abe Pollin, owner of the Washington Capitals, the player payroll alone costs $4.5 million a year. "We carry 45 players, at an average salary of $100,000," Pollin said.
Brian O'Neill, NHL executive vice president, estimates the yearly cost of a team at $4 to $5 million, but one general manager says $7 to $10 million is needed to keep a team on ice. The Capitals, according to information available, spend about $7 million.
The Capitals' losses last year totaled about $3 million. With Pollin's current plan for keeping the team afloat--selling 7,500 season tickets, selling out the first 10 games, having tax and rent reduced--he said an average attendance of 12,500 this season would allow him to break even.
Why so much to keep a miniature army in skates and sticks?
Between inflation and necessity, a hockey budget bulges with musts. There are no simple means of whittling costs to a no-frills level.
Last spring Peter Gilbert, who owned the former Colorado Rockies (now the New Jersey Devils), said if he cut expenses back completely--no farm system, fewer big-contract players, reduced office staff--his minimum overhead would still be $6 million after all figures were in.
With gate receipts of about $3 million, Gilbert said the best he could hope for would be only a $2 million deficit.
"I'd say that figure wasn't too far off," said Pollin. " You might let some scouts go, or some office staff. But it's difficult to do too much cutting."
Pollin said player salaries account for just over half of his team's budget. On the average, salaries account for almost 45 percent of a club's operating costs, O'Neill said. "It is not unreasonable to spend (an average of) $3 million in salaries," he said. The median NHL salary is $110,000.
In comparison, the overhead involved in operating the Bullets--who Pollin says are financially fine--is much less primarily because of the salary difference. There are only 11 Bullets to pay, he said, as opposed to 40 to 45 Capitals.
In addition, players receive performance bonuses, monetary rewards for scoring a certain number of goals, or logging a certain number of ice minutes.
Washington's roster includes 37 active players, draft picks who have signed but remain with their junior team and some on the farm team in Hershey, Pa. "The number varies all the time so I can't say exactly how many," said Pollin.
Some have "two-way" contracts--playing at one salary with the minor league club and at a higher rate with the Capitals. Others command a major-league paycheck at either level.
Unlike basketball and football, a hockey club relies on the lifeblood of a farm system. The Capitals do not share their Hershey operation with another NHL club, as some teams do. O'Neill said minor league costs average between $500,000 and $600,000.
The greatest variant in team costs, after salaries, is transportation. "The realignment last year saved Vancouver 10,000 miles right off," O'Neill said, "but even so, the western teams (Calgary, Los Angeles, Winnipeg, Edmonton, Vancouver) still spend more because they're farther apart."
John Wolf, assistant general manager of Los Angeles, said his team no longer charters flights. "Not only because of the costs, which are horrendous, but because no one wants to take us anyplace," he said. "We're 2 1/2 hours from the closest team (Vancouver) and what airline wants to do that, then have to fly back empty?"
The Kings probably log more air miles than any of the 20 teams in the league. Washington, playing in the Patrick Division, spends most of its time shuttling among New York, Philadelphia and Pittsburgh.
The Capitals' transportation costs--which include flights, buses to and from airports and rinks, hotels and on-the-road meals--is about $250,000 annually, which is average for the league.
Washington allocates approximately $750,000 for administration costs, half the league average.
"It's a big item for us," said Pollin. "It's important. Some teams sell out their buildings and don't have to spend on promotion; maybe they don't need as big an office staff. We need all of it."
Besides front office personnel salaries, "administration" covers everything from insurance to paper clips.
When the Capitals open training camp at Hershey in September, that's another $125,000-$150,000. "Some clubs make money in the exhibition season," said Pollin, "but we don't do as well." Although the team trains at its farm team's facility, Pollin said, "There are still hotels, meals, all those road expenses. It's another major item."
But if the Capitals spend heavily during the preseason, they do have what Pollin calls "a good deal" on practice ice time. Rental of the Fort Dupont arena, plus out-of-town ice time in other teams' buildings, adds up to just $25,000 a year.
Pollin is bargaining for a decrease in rent on Capital Centre. The team pays around $560,000, (15 percent of its net; Pollin would like it dropped to 10 percent) or $60,000 more than the NHL average.
Scouting for new talent runs Washington between $200,000-$250,000 a year. "This is a major expense. We have at least three full-time scouts (down to two this season) and some part-time bird dogs all the time," said Pollin. "With all the travel they do, all their expenses keep adding up."
Even though hockey sticks can break like toothpicks, and players can wear out skates, the Capitals equipment expenses fall within the league average at $100,000.
"Skates cost about $150 a pair," said O'Neill. "You spend a bare minimum of $40,000 for sticks, and then it's pads, helmets, all of that. You've got to spend at least $100,000 a year."
O'Neill said any team trying to deflate its budget should look hard at its skating troops. "If they want to save money, the most obvious way is to be a little more reserved in making up contracts," he said. "Too many players are making too much money on long-term contracts they may never fulfill."
Pollin says today's megasalaries are partly the result of the NHL's "war" with the now-defunct World Hockey Association. "Since I've been involved, it (expenses) has been all upward," he said. "You just have to concentrate on trying to bring in more revenue and not worry about where it goes out." Tickets Pass Halfway Mark
The Washington Capitals have passed the halfway mark toward selling 7,500 season tickets to help keep the hockey franchise in Washington, a team spokesman said yesterday.