The Walt Disney Co., already a force in films, television, amusement parks, music and publishing, will now have a shot at operating a new professional sports team. The company has been awarded a conditional hockey franchise in Anaheim from the National Hockey League.
The league franchise will cost the company $ 50 million, with $ 25 million of that to be paid to Los Angeles Kings owner Bruce McNall for territorial rights in Southern California, leaving the other $ 25 million to recruit players and rent a facility.
Disney said discussions are under way with operators of the new Anaheim arena as a facility for home games. “If things don’t work out, we’re ready to explore other alternatives,” said a Disney spokesman.
“We have had a long and close relationship with Orange County and Anaheim, dating back to when Walt Disney opened Disneyland in 1955,” said Disney topper Michael Eisner in a press release. He added he hoped a home team would strengthen Anaheim’s position as a major tourist spot.
Disney also has to demonstrate team support exists in the region through advance ticket sales before the franchise award from the NHL can be finalized, a condition that insiders say shouldn’t be a difficult hurdle.
The L.A. Kings sold out every seat at the 16,005-seat Forum last year, according to a spokesman for the team. Attendance is slightly off so far this year.
Disney also said it sees synergies between a hockey team and its other businesses.
Eisner noted that ownership of a local hockey team would provide cross-promotional opportunities with Disneyland and its hotel facilities. He cited using games as a source of additional sports programming for KCAL, Disney’s Los Angeles TV station, which now carries L.A. Lakers basketball games.
Blockbuster Entertainment Corp. also announced yesterday that it would be paying the NHL a $ 50 million franchise fee to create a new hockey team in southern Florida.
“It’s a great day for the NHL,” said Kings owner McNall, who is also NHL chairman. He said the new franchises “add great profile to our league. The marketing experience of both companies speaks for itself as our league grows in stature.”
However, from a financial standpoint, Wall Street’s attitude was ho-hum, with Disney’s stock off 37 1/2 cents to $ 40.50, and Blockbuster up 12 1/2 cents to $ 17.75 in a down market.
Compared to other sports teams, franchise values of professional hockey teams don’t rank very high, according to a survey by Financial World Magazine.
For example, the L.A. Kings had a worth of $ 60 million in 1991, with operating income of $ 10.5 million and revenues of $ 35.7 million. The highest valued hockey team is the Detroit Red Wings at $ 70 million, with the New York Rangers, owned by Paramount, worth $ 62 million.