H Is For Hockey Related Revenues

The NHL Board of Governors concluded two days of meetings last week to review a number of issues, including the overall state of the league, and as Dan Rosen reported, business is booming.

Heck, the only thing increasing faster than NHL revenues is bitcoin.

And just like bitcoin, not only are NHL revenues subject to manipulation by shady characters, only a few ever truly benefit from the increases. 

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Given that the NHL is a private organization, as are many of its franchises, there is no official public reporting of NHL finances. This certainly makes it difficult to evaluate how well the league or its franchises are doing. However, there are a variety of data sources available, whether from official filings for those teams that are part of a publicly traded company, or from banking, leasing, and other industry-related sources. And as our own Vanessa Jang alluded to last week, Forbes compiles this data every year to come out with their valuation of NHL franchises. This is how they explain the process:

Every team was sent a questionnaire, looking for confirmation on ownership, price paid for team, various stadium information, among other information. Sports bankers were hammered with questions on past and potential deals. Publicly available information, such as leases, credit rating documents and financial statements of arenas were gathered and scrutinized. Lots of phone calls to media rights analysts for the skinny on TV deals.

Revenues and operating income (earnings before interest, taxes, depreciation and amortization) are for the 2016-17 season and net of revenue sharing and arena debt service. Our income statements include revenue team owners get from non-NHL events at their arena, but do not include the expansion fee from the Knights that was divvied out to the other 30 teams in the league.

There are certainly issues with the estimates Forbes presents. In piecing together a number of official and unofficial sources of information, the Forbes data will certainly include a variety of estimates and assumptions. But at least in compiling them all in one place like this, we can rely on the fact that there will be some consistency in the approach and to the assumptions applied across all the teams. Undoubtedly the values are “wrong”, but I remain confident that (a) they are in the ball park, and (b) any errors in their assumptions will apply across all teams, which means relative differences between them should be reliable. The other benefit of using the Forbes data is that they have been doing this annual valuation since 1999, so these same mitigating factors apply on a year-to-year basis.

That said, you actually won’t be able to find data going all the way back to 1999 on Forbes anymore. But because I took an in-depth look at NHL finances using the Forbes data over at NHL Numbers back during the lockout, I still had everything from 2011 and earlier and have now supplemented with the last six years of Forbes data.

With all those caveats aside, let’s dig into the numbers.


According to Rosen, Gary Bettman expects “hockey-related revenues to grow 8.2% to $4.54 billion this season.” Working that backwards would mean last year’s HRR were on the order of $4.2 billion, compared to the $4.4 billion in total revenues estimated by Forbes. Using this as a reality check, we can see that the Forbes estimates are in the right ball park hockey arena.

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So if we now look at revenues over time, how is the NHL doing since putting players and fans alike through another lockout? Well, looks like there was little, if any, damage done to the overall league finances. In the four full seasons under this new CBA, NHL revenues have increased at a rate of $231 million per year:

That’s $60 million per year more than the annual increases under the previous CBA.

Clearly, the NHL owners saw this increase coming, which is why they were willing to forego an entire season, if necessary, to assure themselves a higher cut of those revenues.


Speaking of that higher cut of revenues, here’s what has happened to player costs under the last three CBAs:

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And you wonder why we keep having lockouts.

Sure, player costs are still increasing every year, but the rate of increase slows with each new CBA. You can also see the immediate impact of that 24% across the board cut in player salaries that was rammed through during the first lockout.

Say what you want about Gary Bettman, but from the owners’ perspective, he has certainly delivered.


Operating income is what is left over from revenues once the player and operating expenses have been spent. Typically this does not include amortization, depreciation, interest or taxes. It also does not include capital costs. For example any investment in upgrading or refurbishing arenas.

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Keep in mind that any well-run company with a semi-competent CFO is going to try to use accounting methods to minimize the bottom line as much as possible in order to reduce the tax burden. So there are definitely some accounting tricks that any CFO worth his salt is going to apply to minimize the reported operating income. That being said, we can definitely see some trends in financial results across the three CBAs:

Whether you believe that the league as a whole was losing money in the period leading up to the first lockout is up to you. But it is clear that relatively speaking, the NHL is doing much better now than it was then. In particular, total operating income as doubled under this new CBA as compared to the previous one.

Again, if you were wondering why many people see another lockout as inevitable, you need look no further than this chart.

Finally, putting those three elements together, here’s the overview of NHL finances over the last 18 years:

Here, operating costs are estimated as well. Forbes does not report operating costs explicitly, but since Revenue – (Player Expenses + Operating Expenses) = Operating Income, some simple math allows us to calculate them. Keep in mind, that if there’s any special accounting tricks being used by those aforementioned savvy CFOs, this is where they would show up, but overall they represent the non-player costs of running a hockey a franchise. Everything from the coaching staff, to management salaries, to arena leases and utility costs.


Looking at all of this, you might think everything is great. And at the macro level, it does appear that way. However, the fatal flaw in the NHL’s business model is that the financial health of the league does not scale down to the individual franchise level. It was true under the previous CBA and it remains true today. You can essentially break the league down into thirds. Last year, the top third racked up a combined $488 million in operating income. The middle third made a respectable $112 million, while the bottom third put up $54 million in losses.

If you look at this over time, here’s how the top five and bottom five teams have fared in terms of cumulative operating income:

So despite all the gains the NHL is seeing as a result of this new CBA and the reduction in player costs down to 50% of hockey related revenues, the teams that were losing money prior to the lockout continue to lose money at pretty much the same rate.

I guess nobody saw it coming:

I’m not sure the two sides could have designed a system more destined to fail at the stated goal of helping the smaller market teams if they had tried to do so intentionally.

In the absence of true revenue sharing among NHL teams, the current financial model will continue to make things worse for small market teams. In fact, as a function of how the salary cap works, especially with respect to the salary floor, an increase in local revenues for the large market teams, will serve to drive up the minimum player costs for the smaller market teams. And that’s not just to stay competitive, that’s to meet the requirements of the ever increasing salary floor.

The thing is, in an even more perverse way, this serves those large market teams very well. Because when this CBA expires, it will allow the NHL to trot out the finances of five or six teams once again to show how they are bleeding red ink, and to use that as justification to extract more concessions from the players.

But until the structural problems in the NHL’s revenue-sharing model are fixed, this issue will never be resolved.


Let me just finish with a couple of observations.

First, the Calgary Flames were in the news again this week after it was reported that Gary Bettman met with Houston billionaire Tilman Fertitta, owner of the NBA’s Houston Rockets. This, of course, prompted the water carriers for Flames’ ownership in the local media to raise the alarm over the possible sale of the team to Fertitta.

Having lost the political battle to gift the Flames’ billionaire owners most of the capital to build a new stadium, it appears that the strategy has now turned to scare tactics. B, it turns out, is also for bullshit.

Anyway, while the Flames may have been barely breaking even under the previous CBA, they appear to be doing well under the current agreement and have generated almost $100 million operating profits over the last five seasons:

You would think this might be reason enough to keep the team in Calgary, and you would be right.

This is nothing but a ploy to try to gain leverage over the negotiations with the City of Calgary. It’s the same strategy Daryl Katz, the owner of the Oilers, used in extorting exorbitant subsidies for a new stadium from the City of Edmonton.

So I fully expect the Flames to remain exactly where they are, no matter what the billionaire owners’ stenographers in the local media might say.

Finally, given this is a Canucks blog, here the overview of how the local team has fared under the three CBAs:

Clearly, the issues with falling season ticket renewals and lagging attendance have had an impact on overall revenues. That’s not the only impact, however. The fall of the Canadian dollar down to 70-80 US cents also hurts the bottom line.

But overall, the team remains profitable, and revenues will need to stagnate quite a bit more before the team falls into the red.


  • Jabs

    Nice, looking at the NHL revenue chart I see that it goes back to 1999, the year the Sedins were drafted. Therefore it is more than logical to assume that NHL revenues have more than quadrupled because of the Sedins being in the league.

  • Jabs

    Aside from my previous comment and all joking aside, there is no way that Arizona should have a team with those kinds of numbers. They lose twice as much money as the second worst team. The only way to save that train wreck is to send them to somewhere that people actually like hockey.

    St Louis is also puzzling. They have lost money since the 80’s when the team almost moved to Saskatoon. The talk of a potential franchise in Kansas City seems laughable when the their closest geographic neighbour is a constant money loser. The only sport that seems to work there is baseball.

  • wojohowitz

    I noticed Calgary carries a value of $430m while Edmonton carries a value of $520m and that is a Calgary negotiating position. What`s puzzling is that Edmonton is a hard working blue collar town where season ticket holders actually know the value of a dollar and are willing to pay the price for tickets, whereas Calgary is a corporate city where most season tickets are owned by companies who use their tax deductable entertainment budgets to pay for tickets. So what`s the problem – raise ticket prices knowing the corporations will pony up and increase franchise value.

    Could it be corporate Calgary is still living with an illusion of self importance based on $100 a barrel of oil when politicians kowtowed to their every whim allowing the corporations to decide policy both municipally and provincially making Nenshi a nasty dose of reality.

    • truthseeker

      His stance against the flames is an excellent one but isn’t he looking into bringing the olympics back to Calgary? That sets off corporate welfare alarm bells.

  • myshkin

    Excellent article. I really hope Calagary doesn’t give in to the Flames demands. Nothing bugs me more than billionaire owners blackmailing the taxpayers to pay for their rink/arena. The totally bizarre aspect to all this is the players take more abuse for being greedy than the owners. We read a lot more about overpaid players than we do about overpaid owners.

    • KCasey

      Its really a tougher situation than just forking out money to billionaires though. I agree with you in part, cause I do believe that the owners should pull more weight in the payment of these new areanas but at the same time each situation is different. Case in point Calgary. They make a profit but not so much that the owner would want to invest 4,5 or even 600 million dollars by themselves on a new venue when they know its gonna take them 20 or 30 years to recoup the cost and get back to making money. Nobody makes that investment. At least not a respectabke finacial mind. Unless your Toronto who can make the cost of an arena in a 2 or 3 years….your gonna need support from somewhere to have it work in a way that makes sense. So while I agree that the owners shouldnt get spoon fed tax dollars, we as spectators and consumers of the product also have a role in being responsable for keeping running in your city. Its a fine line but we walk on in together.

  • truthseeker

    The NHL is just such a disgusting organization. As are pretty much all leagues. Nothing but a bunch of welfare queens screaming poor when they are making money hand over fist. Any team wanting public money for absolutely anything should have to open it’s financial books to the public before a discussion is even begun.

    And then that discussion should end with governments saying “so why don’t you, as a league, divide your profits and share them before you come crying to us.” And then just walk away. Let them move their teams. If communities united and collectively said no more tax breaks, the teams wouldn’t do a damn thing.

    While I think it’s weird the public wants to pay grown men so the public can watch them play a game, fact is people choose to give the league money. I will always support the NHLPA over the league. Sure some players get the big bucks but if you look at the median numbers the average works out to about a 5 year career with about 10 million made. So if that’s all a player has in his life, and let’s face it, most NHLer’s aren’t rocket scientists, that’s pretty much their life salary. 10 million divided by a 40 year working life and that’s 250K a year you’ve made. Sure…..that’s good money….but hardly the “millions” most people think they all make. Not too mention they pretty much guarantee themselves a life of aches and pains just from their career choice.

    Yet owners, who basically do nothing, ( the Green Bay Packers are proof a community can run a pro sports franchise not for profit, and render billionaire owners completely useless) think they should be entitled to 50% or more of the work of the players. That’s just ridiculous.

    Yet most people are so brainwashed by “anti union” propaganda they blame the players during lockouts….lol. The NHLPA has some ugly warts. One being the players seemingly have zero respect for each other and don’t seem to want to force the NHL to implement more stringent player safety punishments. But still….compared to the owners they are the working class. Even if that “working class” makes you angry that they get so much money.

    There’s one very easy solution to all of this though…if you’re one who likes to complain about the money the NHL makes.

    Stop supporting it. Simple as that.

    Stop going to games. Stop buying their merch. Stop watching on TV so they don’t make ad revenue off of you. Vote against governments that are likely to give their corporations welfare handouts. It’s easy. Then you have nothing to complain about because they won’t get a dime of your money.

    I love hockey and the canucks, but they don’t get a single penny from me. If they figure out a way to block HD streaming sites I’ll simply stop watching. More to life than hockey. Much more.