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The Financial Cost of Missing the Playoffs

In today's New York Times, Ken Belson examines how much lighter the Dolan's wallets will get if the Rangers miss the playoffs this year. Belson concedes that missing the playoffs wouldn't be catastrophic for the Rangers or MSG, but it would mean a serious chunk of change evaporating into thin air:

Tickets for the first round of the playoffs cost roughly 25 percent more than regular-season games, so the team would generate about $2 million in ticket revenue for each first-round home game. As the eighth seed, the Rangers would host up to three home games, worth as much as a total of $6 million.

But like all playoff teams, the Rangers would give about half of that money to the N.H.L. In each round, the clubs still playing must pay the N.H.L. a low six-figure fee to help cover the league’s costs to produce the playoffs, including expenses for travel, marketing and officiating. The fees increase each round.

The Rangers would also contribute part of their playoff ticket revenue to the N.H.L.’s revenue-sharing program, which redistributes money to the financially weaker teams.

The Garden, though, would keep all food and beverage sales because it runs the concessions. Fans spend $18 to $26 a person at N.H.L. playoff games, said Chris Bigelow, the president of Bigelow Companies, a consultant to stadium operators. The Rangers would be on the high end of that range.

Roughly half of the revenue from food and beverage sales covers the Garden’s expenses for buying the hot dogs, pretzels and soda, and for hiring the workers to serve them. The Garden’s profit, then, is equal to 18,200 fans multiplied by about $13, or about $235,000 for each playoff game

Belson also acknowledges that the extra scratch would benefit MSG as it undergoes renovations this summer. It's obviously easier to sell season tickets and luxury boxes for a winning product than a fading one or a work in progress.

Belson's article succinctly describes the cost of doing business when you miss the NHL playoffs. Whether they would make up the lost monies from the renovation work and the missed playoffs through higher ticket prices next year is unclear, though Belson also notes that the Rangers didn't increase ticket prices the last time the Rangers missed the playoffs.

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