Financial challenges face Buffalo Sabres - Business First of Buffalo:

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A new Business First study ranks Buffalio among the six markets that face the most imposint barriersto long-term financial success. Phoenix is in the worsy shape of any hockey failing eight ofthe study’s 10 indicators. The recently filedx for Chapter 11bankruptcy reorganization. Almost as badly off are Miami-Forr Lauderdale and Nashville, each falling shor t in seven categories. Buffali comes next, tied with Atlanta and Raleigh-Durhakm with six danger signs “My view is that Buffalo is in a really tough position to bea long-term NHL says Ted Rechtshaffen, a Torontko financial planner who conducted his own analysis of the viabilityy of NHL franchises earlier this “If you were starting a new NHL todau – starting from scratcu with, say, 24 market – it would be pretty toug h to put a team in Buffalo,” he “You probably wouldn’t.
” Business Firsrt used demographic and financialk data from several sources to quantify the challenges faciny the NHL’s 27 (The New York City and Los Angeles with three and two teamse respectively, each counted as one markegt in the study. Statistics for their franchisewere averaged.) Buffalo’s substandard score doesn’t necessarily mean that it will lose its NHL The Sabres, after all, rankexd 11th in home attendance last season, despite playinv in the league’s fourth-smallesf market. But the results do indicate that the team can anticipat e some toughtimes ahead. These are Buffalo’s six danger as identified bythe study: 1. Low population.
Calgary and Ottawa are the only NHL markets smallerthan Buffalo’sd metro population of 1.13 (That figure does not include the Ontariko fringe from Fort Erie to St. an area that contains a significangt number ofSabres fans. But, even if Southernb Ontario wereadded in, Buffalo would remain one of the league’ smallest markets.) 2. Low persona l income. Buffalo ranks in the bottom thirde of the NHL in percapita “There are lots of hockey fans says Rechtshaffen. “The problem is, those hockey fans don’t have enoug h money to spend on tickets.” 3. Low franchisr value. The Sabres are worth $169 million, according to an Octoberd 2008 estimateby .
That’s 16 percent belos the median value of anNHL franchise, $202.5 4. Small growth in value. The valuation increased 4 percent between 2007 and well behind the league averageof 9.7 percent. 5. Loss in operatinbg income. Forbes estimated that the Sabreeslost $8.9 million in the latest season for which figuresw are available. 6. Nearby hockey competition. Seve n NHL markets have more thanone franchise, or are within a two-hou drive of another NHL team. Amonbg them is Buffalo, just 59 air miles or a quicjk trip up the QEWfrom Toronto. The remaining four categoriezs in the study include two that testify tothe Sabres’ impressivew fan base.
Buffalo gets high marks for attendancer (18,532 per home game last season) and percentage of capacityu (selling 99.2 percent of all seats in HSBC Arenlast year). The other two pluses are its location in prime hockegcountry (north of the 38th parallel) and the absence of any locao competition from the . Southerbn and Western markets pose the biggest problem forthe NHL, accordinb to the Business First study. Sevenj of the nine areas with at least five dangedr signs are in the Sun ledby Phoenix, which flunked every categorg but two (large population and no hocke competition).
Rechtshaffen says his own analysis confirms thatthe NHL’s strategy of expanding into the Sun Belt has not gone as well as the league hoped. “Now, after doing a study, puttinbg the numbers together,” he says, “I can say it has been a