Over and over, Kim and Terry Pegula stressed the importance of becoming a leaner organization.
The owners of the Buffalo Sabres and Bills repeatedly mentioned financial uncertainty stemming from the Covid-19 pandemic during a Zoom call with reporters Tuesday, only hours after firing Sabres General Manager Jason Botterill, two assistant GMs and elevating Kevyn Adams from senior vice president of business administration to GM, despite his lack of experience in the role and without conducting an outside search.
But ownership balked when asked whether financial considerations might similarly affect the Bills, specifically whether it would hamper their ability to offer competitive contract extensions to Bills coach Sean McDermott and General Manager Brandon Beane, who have two years remaining on their respective deals.
“First off, there is no ‘financial situation,’” Terry Pegula said. “I don’t know where that rumor started. If you look at every oil and gas company, which is our core business outside of sports, they’re all, you might use the word ‘hurting.’ But we don’t have any debt on our oil and gas business.
“We need to do better moving forward in the sports business like every team is going to have to do, because if we don’t have any fans in the seats next year, what are your economics in the world of sports? We need that component, especially in the National Hockey League, so even though times are not good in any of these businesses, it’s still, you’ve got to find solutions and you’ve got to look up and try to find those solutions.”
The Bills, which have reached the playoffs in two of the last three seasons and are a picture of stability on and off the field, are less reliant on gate receipts than the Sabres because of the NFL’s lucrative television contracts. But the Pegulas likely anticipate a financial hit this season, with the growing possibility of far fewer, if any, football fans in attendance.
The NFL has said it expects to play games in full stadiums, but the Bills, like many teams, are working on contingencies to encourage social distancing, including models for 15%, 33% and 50% capacity at New Era Field, The News reported Tuesday.
The plans are subject to approval by state and local government authorities.
Privately owned Pegula Sports and Entertainment, the parent company of the owners’ sports and entertainment businesses, does not release its finances.
Forbes magazine said the Sabres made $1.9 million in operating income in 2018-19. A PSE official disputed that figure to The News in April, but declined to provide details. It's doubtful the Sabres are making money, though, because ticket revenue hasn't risen enough to offset increasing costs.
Forbes pegged the Bills’ total revenue at $386 million for the 2018 season, and its operating income – the company’s profit after subtracting expenses – at $82 million. Gate receipts, including club seats, accounted for $53 million, or an average of $5.3 million per home game, including the preseason.
Forbes also listed Terry Pegula as the world’s 20th-richest pro sports franchise controlling owner, estimating his net worth at $5 billion.
“Talking about the Bills right now,” Terry Pegula said Tuesday, “there is no financial pressure, negative, on the franchise.”