Money, Money, Money, Money.....Monaaaay!!!

Much to the chagrin, I’m sure, of Professors Mansuri, Franko, Barbezat, and especially Reid, I happen to spend my days working in corporate finance. And it’s because of this that I sometimes find myself thinking in terms of rows and columns when I otherwise should not be. So when the Flyers lost yesterday part of me couldn’t help but wonder if the people whose pockets are lined by the dollars made at The Wachovia Center weren’t a tiny bit pleased to have another game in Philadelphia.

I understand that the Flyers winning yesterday would have ensured that at least 2 more playoff games would be held at The Wach this spring, but the most profitable situation for those aforementioned people would be to win tomorrow night in Philly – the best of both worlds.

As best I can tell the average ticket price for a Flyers playoff game is about $130. If you take that alone multiplied by the 20,000 fans that will be in attendance tomorrow night the Flyers are going to be pulling in $2.6 million in ticket sales alone. An extremely conservative estimate would be to say that all the direct and indirect expenses (employees and overhead basically) would be cancelled out by concessions and luxury boxes, so I’d be willing to say that a $2.6 M revenue figure is more or less all profit.

This NOI of $2.6M might not seem like a lot to a company like Comcast, who provides cable to 24 million viewers, internet to 13 million customers, phone services to 4 million, owns various cable channels including E!, Versus, and the Style Network, owns the Sixers, Flyers and the buildings they play in, and cleared $2.6 billion in 2007 - but every little bit helps. An extra $2.6 million sprinkled on top of their profits enables Comcast to hire 26 relatively high-level, skilled employees at no cost. Employees that will work day and night and weekends, if necessary, to help Comcast figure out how to make more money in 2008 and the future.

Or if you’d like to think about it differently, tomorrow night’s earnings will be roughly enough to pay Mike Richards’, Jeff Carter’s and R.J. Umberger’s salaries for the entire 07-08 season. That’s why having a successful team is so important – the answer to 99 out of 100 questions – money.