The occasional leaking of NHL financial data to the Toronto Star is always a fun reminder of the extent to which the NHL exists to rip off Canadians and hockey fans.
The confidential document shows that the six Canadian NHL clubs last season accounted for about 33 per cent of the $1.2 billion (U.S.) in league ticket revenue. In 2007-08, Canada’s six teams represented 31 per cent.
The report, which was obtained by the Star from several league sources, suggests operating a club north of the border is much more lucrative for the NHL. Five of the top six-revenue generating clubs are based in Canada, with the New York Rangers being the lone team from the U.S. in that group.
I’ve copied the full table from the newspaper, which isn’t online, and posted it here. Twitter’s Mike Moffat ran the applicable exchange rates and came up with a dollar worth
Wraps self in flag. Lots of things jump out at me. You could quite reasonably say that it’s more lucrative to be the worst team in the NHL for two years running in Edmonton than it is to win the Stanley Cup in the United States. But, of course, the market is tiny: give us a rink or we’re moving the team. The story doesn’t get into information about sponsorship and broadcast revenues, unfortunately; I’ve never understood why whoever leaks this information doesn’t also leak that. George Malik over at Kukla’s Korner has some pretty hilarious spin on the whole thing:
it should be noted that this is only a partial picture. Without knowing what teams take in from broadcast agreements, TV, radio, print and online sales, sponsorships and signage, suite sales, merchandise sales, concessions and even parking fees, one cannot determine the entirety of a team’s gross revenues per home game…And it’s hard to tell kids who play hockey in California, Texas and Florida that the NHL’s “grand experiment” of expanding to the sunbelt was a failure away from the rink.
At the risk of being heartless…I don’t care about kids who play hockey in California, Texas and Florida. I grew up playing hockey without the benefit of an NHL team in the same city. Kids in the Maritimes do. Kids in Canada are watching the Premier League and playing soccer now. Who cares.
I would suspect that a lot of the in-arena stuff is driven by the amount of butts in the seats, with the teams that charge more possibly being able to charge more for that stuff as well, although I’d suspect the spread to be smaller than ticket prices. I sometimes notice US teams doing promotions with cheap in-arena food and drink; you don’t get those here. I don’t think the Predators or Coyotes are crushing the Oilers in hot dog revenues per patron though. It doesn’t make sense.
As for sponsorship, I’ve got to think that those dollars are going to be driven by the prestige of the brand – there’s more prestige in being associated with the Edmonton Oilers than the Tampa Bay Lightning, for example. TV’s going to be driven by the value that the market places on the eyeballs watching and listening to the games. It’s well known how abysmal the NHL’s TV ratings are throughout the United States – the same teams that dominate in ticket sale revenues dominate the list of teams that are most watched. Canada is a wealthy country and hockey draws like no other sport. It’s a silly comment from Malik.
But, of course, Edmonton is tiny: give us a rink or we’re moving the team. To somewhere more profitable, where nobody cares about hockey, fewer people will watch and we’ll rake in $700K a night in ticket sales or something. If you’re Mark Spector, or one of the many other Edmonton media guys who implicitly made this argument…I don’t know how you live with the embarrassment of having made it. It was obviously dumb at the time, but having yet another set of numbers that confirms just how dumb it is – man. If the Canadian dollar fell to about 73.8 cents, the Oilers would have league average ticket revenue, all other things being equal. Of course, the league average ticket revenue would also fall substantially, given how much of it comes from Canada. So the real number is lower. But yeah, Edmonton’s a hiccup in the dollar away from being Winnipeg.
I’ve written before about the astonishing amount of money that flows out of Canada and to the United States to fund NHL hockey there. National TV deals are shared and Canada – with only seven teams – generates far more revenue per team or per capita than does the US. I would suspect that Canadians buy a grossly disproportionate amount of NHL memorabilia – all of this money is shared equally amongst the thirty teams. It’s likely that at least five of the Canadian teams are paying revenue sharing. Going by memory, James Mirtle estimated that the Winnipeg Jets would hit $50MM in annual ticket revenue, which would probably put them into revenue sharing payment territory or very close to it – it would have put them seventh on last year’s revenue list. I think you can probably conservatively say that there’s at least $200MM flowing out of Canada annually to fund hockey in places that don’t care about it the way that we do.
This is enraging stuff and exposes just how rotten the NA system of sporting monopolies is. How much better off would be with a European type system here, one where the central authority was much weaker and the number of teams in a city was determined not by the financial interests of the league and players but by the interest of the community in supporting teams? Looking at these numbers, you wonder if Toronto couldn’t support three teams and Montreal and Vancouver two. A promotion/relegation system would let the market sort out how many teams could be justified in those places, rather than owners who are interested in preserving their local monopolies.
The present system lets the players in Nashville and St. Louis get rich off the interest that Edmonton and Calgary have in the game and provides the Canadian owners with a way to veto competition in their own markets. It lets what’s gone in on Edmonton for the past six years happen without consequence to ownership. It’s awful. While I’m not usually big on government interfering in private enterprise, I’d be heavily in favour of some sort of punitive taxation on centrally generated NHL revenues in Canada – I’d rather the money was spent on healthcare here than on the salaries of guys playing in American cities that don’t care about hockey. Throw a 300% tax on the sale of NHL merchandise in Canada and a 90% tax on the sale of national TV rights.
We may not be able to force them to respond to the interest that this country has in NHL hockey by putting, like, five or six more teams here, but we don’t need to let them fund the NHL in America on Canada’s dime.
(See also: Mike Moffat’s fine post on the topic.)