The last season of the ice hockey SM league was financially divided. The combined turnover of the clubs was a record 172 million euros, but the losses were also record.
The SM league clubs made a total of about 11 million euros in business losses. No less than six clubs HIFK, Ilves, JYP, Lukko, SaiPa and TPS lost more than one million euros. Only three clubs, KalPa, Lukko and Kärpät, made a positive result.
On Tuesday, the consulting company EY published its traditional financial report on the situation of clubs. The report pointed out that the current pace cannot continue.
– I wouldn’t say that the situation is serious, but tight. Corrective measures must clearly be taken, EY’s director of financial administration advisory services Janne Aalto says to Urheilu.
How long can such losses be sustained?
– If we are talking about losses of more than ten million per season, then not for several years. But it’s also partly a question of how long the owners have the patience to support more if needed, and on the other hand, whether the clubs are able to expand beyond sports into other business, which is a really significant source of income for some clubs, Aalto answers.
The losses are worrying
Urheilu asked Kärpi, Ilves and Jukurei for their thoughts on the combined losses of SM league clubs. The readings are not uplifting.
– Of course, it’s really worrying that so many people made losses and those losses were still significant, Kärppie’s CEO Tommi Virkkunen tumii.
– Of course, this whole thing is worrying. Yes, we would have to get clearly more turnover as a whole, CEO of Ilves Risto Jalo commented and reminded about the increased competition with the European leagues.
Jukurie’s audience numbers are falling
CEO of Jukurie Antti Laakso is worried about the situation of the entire SM league, but also the club’s loss of more than 334,000 euros last season and the number of spectators. Jukurit is aiming for an average of almost 3,000 viewers, but in the early season, an average of 2,248 pairs of eyes have visited.
– Yes, you should really be worried about the fact that we are really far behind the audience average, Laakso admits.
– Of course, on the flip side of the coin, the VIP side has worked well enough to not be terribly behind, but if the trend continues, then we are really in trouble.
Jukurit is currently aiming for at least 250,000 euros in its share issue, of which tens of thousands are exhausted. Laakso is confident that the final negotiations will be completed and Jukurit will collect the minimum amount.
Costs rose significantly
The SM league is not alone with its problems, as significant losses were also made in the Swedish premier league. One common factor is the increase in the cost level. In the SM league, for example, the costs of materials and services increased by 23 percent and personnel costs by 18 percent.
– Many others also noticed that it is really difficult to translate the increase in the cost level into prices. You have to be able to keep the ticket prices at a level that families and everyone can come to the hall, Kärppien Virkkunen says.
When there have been challenges on the income side, according to Jukurit boss Aalto, the owners of some of the clubs have had to invest significant sums in the operation. However, many teams have managed to expand their activities outside of hockey as well.
Kärpät, for example, ended up with this solution, which started more than ten years ago with digital roadside signs. Since then, the company has invested in events and restaurants. Thanks to this, the group’s latest turnover was no less than 33.8 million euros.
– More than ten years ago, we saw that the growth in our conditions and in the hall was quite slow. That’s when Kärpät decided to start thinking about a new strategy, says Virkkunen.
Ilves bought Ilves
Ilves has also looked into activities outside of hockey. Ilves Hockey Oy bought the majority of the background company of the Ilves football team last season. At the same time, the operation of the Tammela stadium was transferred to the same group.
This was also behind the group’s loss of one million euros. Ilves’ losses mainly consisted of football activities during the winter season, as the result in ice hockey was a plus of 16,000 euros.
– This year has of course gone well in football and the European places have brought a little extra income. All in all, the public has gotten off to a great start in Tammela, and this fiscal year we will be on the plus side, says Jalo.
According to Aalto, the financial problems are also influenced by the fact that television, sponsor, ticket and ancillary sales income is not enough to cover the expenses. However, you have to invest in the players, because the SM league competes with Europe’s top leagues.
– The competitive situation is tough because there are tough leagues in Europe, such as Switzerland and Sweden. If you want the best players for your club, you also have to make a bet in that competition, Aalto emphasizes.
Clearance sales are not known
This year, the return of the SM league qualifiers will also change the situation, especially for the clubs at the tail end. In previous years, it was possible to patch up the economy with clearance sales, but now that is no longer possible.
Relegation to Mesti would be a hard blow to the league club financially, although the relegated club will receive 2.2 million euros from its league share. EY points out in its report that a relegated club would have to cut its expenses fivefold.
– The difference is really big. Of course, you can get money back from the league share, which has a little place, but whether the club will be able to continue professional activities is certainly a really big question, Aalto admits.