Islanders increased valuation sign of a healthy franchise
The good news keeps coming for the New York Islanders. In the latest health check, the value of the franchise has gone up by $80 million.
Earlier this week, Forbes released its annual study of hockey. In it, they review the valuations of all 31 NHL franchises. The New York Islanders finished as they 18th most valuable NHL franchise with a value of $520 million.
The value of the franchise jumped from $440 million from last year’s exercise to $520 million this year. That’s an increase of $80 million over a single year.
Only the New York Rangers (+$100 million and the New Jersey Devils +$95 million) have increased more than the Islanders over the same period. An increasing valuation is a great health check on the organization.
Incentive to Invest
It makes sense that the three teams to increase their value by $80 million or more play in the New York Metropolitan area. Real-estate in New York while declining in some areas its still increasing at 3.2 percent as of the quarter ending on September 20, 2019.
The Islanders valuation increased by 18 percent from last year. That increase can be attributed to the construction going on at Belmont.
With a brand new hockey first arena, their valuation will certainly increase. Of the Isles $520 million value only $82 million is attributed to the Islanders stadium (15.8 percent of their total value). Little Caesar’s Arena, the newest in the NHL, accounts for 30.6 percent of the Red Wing’s total value at $245 million.
Great. What’s the importance?
The bottom line is that hockey is business and that owners are in the business of making money. When there’s a potential for a return they’ll invest.
Scott Malkin and John Ledecky have already shown that they’re willing to invest in the franchise. Not only have they rebuilt the Islanders practice facility and are currently building the arena at Belmont Park, but they’ve shown they’re willing to pony up on front office and on-ice personnel.
They’re paying both Barry Trotz and Lou Lamoriello a pretty penny. They also OK’ed Lou to give Artemi Panarin nearly Connor McDavid money last free agency. And they paid to keep Anders Lee, Brock Nelson, and Jordan Eberle.
That’s not something that happened in the past.
When it came to appointing a GM the Islanders chose their former backup goalie. When they looked for a coach they always appointed an AHL level coach or someone that had no prior experience in the job. Essentially, someone who would be willing to take the bottom dollar for the gig.
The same can be said for the playing staff. Before Malkin and Ledecky, the New York Islanders just weren’t a cap team. They stuck to an internal budget rather than spending to the limit.
There’s an incentive for the Islanders owners to invest because they’re likely to see a good return on that investment.
That increased valuation shows something else. That the Islanders are a healthy franchise that is moving forward. And at the end of the day, that’s all we want.