SUN Hockey Pool

Dollars and sense

RANDY SPORTAK -- Sun Media

, Last Updated: 2:00 PM ET

The squad that went to the seventh game of the Stanley Cup final in 2004 had a payroll of approximately US$36 million.

This year's team cost about $49 million. The NHL salary cap is reportedly jumping to $56 million for the 2008-09 season.

When times were tough, the Flames had trouble competing financially.

The salary cap is linked to league revenue, so it won't become an issue as it was before, but it begs the question whether a tipping point exists where the Flames couldn't afford to be among the top clubs in terms of payroll.

"In order for us to continue to spend at the levels we do, which are very near the cap, we have to be very near optimizing revenues in order to achieve them," said King.

"We don't have a big gap. We need full buildings, we need good advertising revenue, we need good television revenue, we need good merchandise revenue, we need good food and beverage revenue. We need the wind blowing hard at our back in a positive revenue form in order for us to finance and keep our commitment to a competitive team."

Before the lockout, the Flames were indeed a 'have-not' team. They received money for 'currency equalization' from the league to help offset the disparity between the Canadian and U.S. dollars, and lost money for several seasons -- reportedly $20 million over a five-year period.

Now, the team pays into the revenue-sharing plan.

King won't say what the team's profit was this past season.

"At the point at which losses were discussed, it was not a discussion about losses. It was a discussion about survival. This is not 'cry when you're poor and puff your chest out when you're not.' We have to, as I said earlier, have a lot of things going right for us to make it work. There is no commercial rate of return on the money invested in this team on your best day. If you want a commercial rate of return, it's probably not in the professional sports business.

"Not withstanding that, I think our goal in the bad old days was to move the story off of the business pages and onto the sports pages.

"I don't think people are, frankly, interested in the economics other than to understand you're stable. Whether you make $10 or $20, I don't think is a big deal.

"I think if they thought we were making a lot of money and not re-investing it, that would be an irritant or an issue.

"I think (fans) see us as having some degree of financial success, and they see us investing significantly in the community and the team on a reciprocal basis, which is what we said we would do."


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