APN News

  • Wednesday, September, 2020| Today's Market | Current Time: 01:52:55
  • The National Hockey League is the biggest in the world in terms of engagement and finances. It is one of the more premier sports leagues in Northern America and Canada, just trialing behind the NFL, NBA, and MLB.


    In terms of money, the NHL ranks as the sixth most profitable sports league in the entire world, beating out huge soccer divisions such as La Liga in Spain, Serie A in Italy and is only beaten by the Premier League. This is outstanding for what is a niche pastime, being able to compete with sporting brands and American sporting institutions that have a much greater global appeal. Despite being outnumbered in terms of fanbase and players, the NHL made a profit of $4.43 billion. With that amount of money circulating in the sport, there is a lot of interesting facts regarding the finances, here are three:


    TV deals are worth billions


    The NHL has a deal with broadcaster NBC that will run throughout the 2020-21 season, that pays over $200,000,000 each year. However, this is only in the USA. In Canada, where there is a far greater appetite for the sport, the TV deal there is worth an extraordinary $5.2 billion for a 12-year contract, which began in 2014. This breaks down to around $450,000,000 a year, and this income, including the US TV deal, is shared equally to all 30 teams in the league, giving teams a useful $20,000,000 a year from just TV money. With the salary cap for each team being $75,000,000, it is clear to see that the TV money is an essential resource for paying these expenses.


    Ticket sales are key


    Despite how lucrative TV deals are for the NHL, unlike the majority of other sporting leagues and franchises, the NHL still makes most of their money through ticket sales. Of course, this depends on how popular a particular team is. This means that clubs in Canada are assured to routinely sell-out regularly, and this passion for hockey in Canada means that tickets there can be inflated without affecting the attendance. This gives these clubs a boost, as unlike with TV revenue, each club keeps their induvial gate receipts.


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    The Salary cap protects the weaker teams


    As said before, the NHL has a salary cap of $75,000,000. This has been put in place to make sure a considerable gulf does not develop between the weaker teams and the bigger teams. With so much of a team’s expenses going on a player’s salary – is around 70% on average, it was critical that clubs tried to stop that number growing anymore, as it could start putting teams out of business. If this wasn’t put in place, there would be a risk that the most significant franchises with the biggest fan bases, such as the Canadian teams, would dominate the market, and make it harder for others to compete and eventually exist. You can see this discrepancy when using an NHL drafting tool, as it demonstrates how difficult it is for lesser clubs to compete and attract good players. Most teams stay around this cap, with some going slightly over in the past, but with some teams choosing to stay as much as $20,000,000 below the cap as they physically can’t spend anymore, it implies that there still is an economic separation between teams.