Photo credit:© Kiyoshi Mio-USA TODAY Sports
How Shohei Ohtani’s contract highlights the difference between NHL and MLB salaries
By Michael Liu2 months ago
Baseball on a hockey site? Say it ain’t so.
Shohei Ohtani just became the richest man in North American professional sports, inking a deal with the Los Angeles Dodgers that will pay him $70 million USD annually for the next 10 years. That’s nearly a billion dollars CAD, not to mention surpassing the entire GDP of a couple of small nations. Ohtani is a unicorn, an international superstar, and the price tag somehow doesn’t even seem ridiculous, given the player and the person.
His contract signing does lead to an interesting thought experiment in the realm of hockey, however. We’ve never seen anyone make this type of money before in the NHL, and the chances are we likely won’t.
Why’s that the case? And does that mean hockey players are getting stiffed? The answers to all these questions might surprise you.
It’s not just because the MLB lacks a hard salary cap that their contract values are higher. Professional sports teams have two major sources of revenue: TV deals and tickets. Think about how big MLB stadiums are and how many games they play. Sure, the ticket prices aren’t as expensive as the NHL, and they don’t sell out every night, but 81 home games add up quickly. NHL teams only play in 41 home games, and a sell-out is a high watermark that is difficult for most markets.
On top of all of that, NHL TV rights simply aren’t worth as much as the MLB’s. The NHL’s domestic media rights bring in roughly $1.08 billion USD annually. Baseball teams took in $2.3 billion USD in 2022 alone. That’s a massive difference, and despite the NHL maximizing alternative revenue streams beyond tickets and TV rights, the gap is still enormous.
Consider how baseball has a uniquely large window during the summer when they’re the only major professional sports league broadcast live in North America. The NHL season’s timing forces them to contend with two months of baseball and the massive market shares of the NFL and NBA, who run their seasons concurrently with the NHL.
So, the MLB has more revenue than the NHL—but how does that impact salaries?
Looking at the players
Aside from the lack of a salary cap in baseball, the MLB sports a slightly larger active player base than the NHL, with around 780 players to the NHL’s 736. If we divided each league’s yearly total revenue by the number of active players, the MLB would bring in revenue equal to roughly $13.8 million per player. In comparison, the NHL would bring in revenue equivalent to roughly $7.2 million per player—a pretty significant gap at first glance.
But where this gets interesting is looking at the average salaries of both leagues.
Despite having massive earners like Ohtani and Trout, the average MLB salary averages around $4.4 million per season. Compare that to the NHL’s average salary of $3 million, and something interesting emerges. On average proportionally, hockey players take home 42% of their per-player revenue share, which is more than the MLB’s 32%. This is to say that NHL players are taking home a higher percentage of league revenue than MLB players despite the massive gulf in raw monetary value.
In 2023, 153 of the 1214 players listed on opening day MLB rosters made $10 million or more annually, roughly 12.6% of the total player base. 593 players made $1 million or more in total salary, or 40% of the player base.
In the NHL, 39 of 1546 players with NHL contracts made an annual salary of $10 million or more, or 2.5% of the player base. 556 of 1546 players made an annual salary of $1 million or more, or 35.9% of the player base.
For all of the salary cap’s faults, taking care of the lower-earners is not one of them. NHL league minimum salary stands at $750,000 for 2023-24, while the MLB’s league minimum currently sits at $550,000, and not to mention that every contract in the NHL is guaranteed, while the MLB has non-guaranteed contracts that can be terminated ahead of opening day. The spread of annual salaries in the NHL is way less top-heavy than those in the MLB, with the NHL featuring more players in the middle class of earners who benefit from the higher percentage share of what the league generates.
MLB Player base sorted by annual salary (high to low)
2023-24 NHL player base sorted by annual salary (high to low)
Unfortunately, that’s pretty much the only comparable. To compare a league making $1.08 billion a season and a league raking in double is comparing apples to oranges.
Unless the NHL drastically figures out a way to make more money, they likely won’t be putting pen to paper on the kinds of deals that landed Shohei Ohtani with the LA Dodgers at a gargantuan $700 million over 10 years.
At the same time, hockey is not doing a bad job of taking care of their own with the means that they have, and it’s interesting to see that the players are taking in more percentage-wise per player than baseball players.
But it would be nice to see the NHL in a place where social media collectively glues itself to tracking private jet travel in the hopes that said plane contains the superstar they want their team to sign so desperately.
549 games to go before something like that is possible!
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