The National Hockey League is skating faster than ever due to rising profitability and the prospect of more television money.
By our count, the league’s average operating income hit a record $25 million for the 2017-18 season, 39% more than the previous season. The league’s current ten-year collective bargaining agreement (both the NHL and the league’s players association have the choice to opt out of the deal in the eighth year of the agreement) was ratified in January 2013 and reduced the players’ share of hockey-related revenue to a 50-50 split with owners, down from 57-43. Since the 2011-12 season average operating income is up more than threefold.
The current U.S. television deal with NBC pays an average of $187 million a season—the network agreed to pay $2 billion over ten years but handed the league $200 million up front—and is likely to increase more than twofold when the current deal expires after the 2020-21 season. True, regular season viewership was down last season, but ratings were up for the more valuable postseason. A number like $400 million a year is quite possible.
Still not convinced? Look at the recent local cable deals. The Stanley Cup champion Washington Capitals began a new deal with NBC last year for 15 years that is worth twice its previous deal. The annual rights fee to the team doubled to more than $35 million a season, and on top of that, the Capitals have an ownership stake in the regional sports network. Even the lowly Buffalo Sabres kicked in a new 12-year deal with MSG Network last season that doubled its rights fee to an annual average of more than $25 million.
The top of the list—New York Rangers ($1.55 billion), Toronto Maple Leafs ($1.45 billion), Montreal Canadiens ($1.3 billion), Chicago Blackhawks ($1.05 billion) AND Boston Bruins ($925 million)—is dominated by the Original Six teams that are great brands with rich local television and sponsorship deals.
As a result, the value of the average NHL team rose 6% during the past year, to a record $630 million.
But the most important team in the NHL may be its newest: the Vegas Golden Knights, which, in 2018, became the league’s first expansion team to make the Stanley Cup finals in its debut since the St. Louis Blues in 1968 (an expansion team had to make the finals that season due to the league’s alignment). The Knights took in $180 million in revenue in the past year—the tenth highest in hockey—and $53 million in operating income, the fifth highest among the league’s 31 teams. The Knights are now worth $575 million, 15% more than their expansion fee.
The instant success of the Knights has the NHL on the verge of getting $650 million for its next expansion team in Seattle—an unlikely sum had the Knights tripped up.
Potential crack in the ice: a lockout like the one hockey legend Bobby Orr is expecting. And Orr isn’t being overly pessimistic. No U.S. league has had as many workstopagges as the NHL over the past 30 years: the 1992 players strike and three lockouts by the owners (1994-95, 2004-05 and 2012-13). But maybe saner heads will prevail this time?
When looking over our list, keep in mind that revenue and operating income are for the 2017-18 season, include postseason and applicable non-NHL arena revenue, and are net of revenue-sharing and arena debt service. All figures are in U.S. dollars based on average exchange rate during 2017-18 season. Team values are enterprise values (equity plus net debt) of teams based on current arena deal (unless A new arena is pending). Operating income is earnings before interest, taxes, depreciation and amortization. Debt includes arena when recourse is to team owner.
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