League revenues increase to about $2.33B in '06-07

[MAROONSRoad]

And this affects how much revenue the league gets from its TV contracts .... Hint: the reason the national contract with Versus is only $65M is because the NHL has generally had low national ratings; local markets have pulled in higher numbers, and thus teams can command more money for their TV rights.

Next?

Pittsburgh, Detroit, Buffalo, Minnesota and Colorado have great ratings. The New York teams all make a lot of local TV money but have very poor ratings for the size of the market. I believe both Boston and Dallas make a lot of money from local TV, but I’m not sure how good their ratings are. Then there are teams such as San Jose and the LA Kings that probably do okay. The rest of the teams, I’m not so sure of.

Some examples:

Atlanta had only 8,800 household for its games 3 and 4 against the NY Rangers in NYC of the first round of their first playoff series. See link in NHL TV Rating and Revenue Thread.

Anaheim was averaging 16,000 households in the LA market for its regular season game according to an article earlier this season.

The ‘Canes 1.0 or less rating amounts to 10,063 per game in their market.

And as was pointed out by Jeff Genthner, FSN South's vice president and general manager: "only seven of the other 21 NHL teams with broadcast deals with FSN average better ratings than the Hurricanes."

It follows that, including the 'Canes, at least 14 of the NHL teams in the USA are averaging a rating equal or lower to the 0.9 or 1.0 rating Genthner estimates for the 'Canes. In otherwords, on FSN in the United States at least 14 NHL teams' local television broadcasts are averaging 1% or less of TV households in their respective markets.

http://www.newsobserver.com/796/story/550629.html

Also, have a look at this:

- Florida with a rating of 0.33 for local games.
- Atlanta with results 70% below expectations.
- Islanders rating too low for distribution.

“According to the report, FSN Florida officials promised advertisers before the start of the season ratings for Panthers games would average 1.0. One problem as terrible as that number is to begin with, ratings are 77 percent below what was expected. In a region where grocery stores rarely carry green bananas, no one will admit they’re watching NHL hockey.

In Atlanta the Thrashers are an exciting and competitive team led by Marian Hossa one of the NHL most electrifying players…The NHL has already failed once in Atlanta and appears destined for the same fate once again. The television numbers are down a 10th of a rating point and fully 70 per cent below expectations.

The New York market remains home to three NHL franchises, at least one franchise too many for that geographical region. According to the published report, numbers are so low on Fox New York for Islanders games; the ratings numbers are not made available for distribution, something that didn’t seem possible.

One of the few American markets the bright thinkers the NHL employs (an Oxymoron if there ever was one) tries to sell media pundits on is Detroit’s label as “Hockey Town USA”. Indeed Detroit may like to believe its Hockey Town USA, but the current television ratings numbers are down almost 50 per cent over last year's figures. And last year's figures were a far cry from when the sport was going strongest in 2001.”

http://sportsbiznews.blogspot.com/search/label/NHL TV ratings

GHOST

 

[Randall Graves*]

Sometimes it seems like people are hoping for the game to fail, the league makes progress and you still have people rooting against it and claiming doom and gloom :

 

[Ted Hoffman]

Pittsburgh, Detroit, Buffalo, Minnesota and Colorado have great ratings. The New York teams all make a lot of local TV money but have very poor ratings for the size of the market. I believe both Boston and Dallas make a lot of money from local TV, but I’m not sure how good their ratings are. Then there are teams such as San Jose and the LA Kings that probably do okay. The rest of the teams, I’m not so sure of.

Some examples: (snipped for brevity)

OK, fine - you're going to look for bad news about some markets any way you can, ignoring the underlying reasons why. It's a recurring theme, I get it. Continuing to go to the well about ratings as a barometer of the success (or lack of) in any market is fruitless; as has been mentioned several times now, revenues from TV contracts (national and local) are not meaningful for nearly every team when compared to the total amount of revenue the team generates.

Honestly, I could care less if Florida's ratings were 0.0003 and they only got $25,000 per year for the TV contract. The size of a TV contract (or lack thereof) is not going to make or break any team - though if you find proof that such a contract is absolutely vital to a team's existence, please share that story with us.

BTW - could you try to find something a little more up to date than January 1, 2007? A little more accuracy and sources that are more timely for supporting your position goes a long way towards building on credibility. Thanks.

 

[Bear of Bad News]

Sometimes it seems like people are hoping for the game to fail, the league makes progress and you still have people rooting against it and claiming doom and gloom :

NHL hockey, unlike just about any other sport I can think of, has a sizeable contingent of "fans" who seem to prefer that no one else watch the sport. Like it's a little secret, and as soon as it becomes popular, then it's a "sellout" and no longer worth watching.

 

[MAROONSRoad]

OK, fine - you're going to look for bad news about some markets any way you can, ignoring the underlying reasons why. It's a recurring theme, I get it. Continuing to go to the well about ratings as a barometer of the success (or lack of) in any market is fruitless; as has been mentioned several times now, revenues from TV contracts (national and local) are not meaningful for nearly every team when compared to the total amount of revenue the team generates.

Honestly, I could care less if Florida's ratings were 0.0003 and they only got $25,000 per year for the TV contract. The size of a TV contract (or lack thereof) is not going to make or break any team - though if you find proof that such a contract is absolutely vital to a team's existence, please share that story with us.

BTW - could you try to find something a little more up to date than January 1, 2007? A little more accuracy and sources that are more timely for supporting your position goes a long way towards building on credibility. Thanks.

I'm not sure of the importance of explaining or understanding "the underlying reasons" for poor local TV ratings in the context of this thread. I was simply responding with some data to your initial claim that "local markets have pulled in higher numbers, and thus teams can command more money for their TV rights." I'm not sure if that's really a significant/true point given the data.

Here's why local TV/media revenue might be an issue. If hypothetically (and I don't think this is too far off from the actual situation) you have a few teams in large markets making 20 million or so, several more teams making between 5 and 15 million and then say half of the remaining teams making between 1 and 3 million, then there is in fact a great disparity in revenue, especially since the teams with greater local TV revenues are often in better performing markets to start with. The cap floor/ceiling is pushed up by the larger local TV deals, yet some teams hardly have any local TV revenues. Obviously, revenue sharing will help even the playing field, but it's only meant to be a temporary solution.

As for the data I posted, the Atlanta figure is from this year's playoffs. The article from the Raleigh newspaper is important since it indicates how all of the FSN teams area doing. I have not been able to locate more recent data, but if I do so, I'll post it in the NHL TV Ratings and Revenue thread.

GHOST

 

[Injektilo]

NHL hockey, unlike just about any other sport I can think of, has a sizeable contingent of "fans" who seem to prefer that no one else watch the sport. Like it's a little secret, and as soon as it becomes popular, then it's a "sellout" and no longer worth watching.

NHL hockey also has a sizeable contingent of fans who have some sort of complex about being ignored. Like if only 50 Cent would start wearing a ... uh, Rangers jersey, I dunno... in one of his videos, then hockey would be more popular and their love for the game could be justified.

 

[EbencoyE]

this wont last long. next season will see revenues decline. ya just cant keep GIVING AWAY tickets. you guys can sugar coat it all you want, but its truth. no tv deal, no fans, just how does the league expect to keep this up?.

Well the leagues been around for what? Over 80 years? So I'd say they're doing pretty well getting by with no fans or no major TV deal.

And considering EVERY team has ALWAYS given away tickets, I'd say that's proof that they're doing fine. You're not going to give away tickets if you need the money.

 

[Doc Scurlock]

Well the leagues been around for what? Over 80 years? So I'd say they're doing pretty well getting by with no fans or no major TV deal.

And considering EVERY team has ALWAYS given away tickets, I'd say that's proof that they're doing fine. You're not going to give away tickets if you need the money.

No one's denying the fact that teams give away tickets, it's just that some teams give a whole lot more than others.

 

[puckhead103*]

http://www.sportsbusinessjournal.co...ticle.main&articleId=55148&requestTimeout=900



So ... I plugged numbers into the formula that calculates what the midpoint will be:

Midpoint = (Preliminary HRR Revenues * Players Share - Preliminary Benefits) / 30 teams

Assuming that revenues last year were $2.1 billion, the players got 54% and knowing the midpoint for '06-07 was $36 million, preliminary benefits would have been $54 million. The 5% adjustment for revenue growth was waived last year.

If revenues hit $2.2 billion and assuming preliminary benefits grew at 5%, the players would get 55% and the midpoint would be about $38.4 million - giving us an Upper Limit of $46.4 million. If revenues hit $2.25 billion, then the players share would be 55.25% and the midpoint would be about $39.55 million - giving us an Upper Limit of $47.55 million. If the 5% adjustment is not waived this year, then the Midpoint would move to about $41.5 million, and the Upper Limit would stand at about $49.5 million.



So for everyone that's asking - if both sides don't waive the 5% adjustment factor, we're probably looking at a $49.5 million cap; if they waive it again this year, we're probably looking at a $47.5 million cap.

wheres the floor...

i know if revenues increase, so does player share, whats the floor? will it be at 30 million or will the floor goes higher as revenues/player share increases?...

 

[kdb209]

wheres the floor...

i know if revenues increase, so does player share, whats the floor? will it be at 30 million or will the floor goes higher as revenues/player share increases?...

The floor is $16M less than the cap.

Upper Limit = Cap Midpoint + $8M
Lower Limit = Cap Midpoint - $8M

So, with an Upper Limit of $47M, the floor would be $31M, and with an Upper Limit of $49M, the floor would be $33M.

 

[puckhead103*]

thanks....

 

[Drury_Sakic]

That may be true, but in the long term it all comes down to the ratings. If hardly anyone is watching, cable companies won't want to pay a lot for the content nor will advertisers for commercials. Who pays a lot for content that isn't in demand?

I think TV contracts are about as low as they will go right now. Remember, the current NBC and VS deals were signed at a time when both networks KNEW the NHL was going into, already in, or just coming out of an extended lockout. Ratings have been OK(for hockey standards) on both networks with a few games drawing good sized viewership crowds. If anything both deals will only get better(if only marginally) for the NHL, not to mention I think that ESPN will try to get back the sport, if not just out of spite for VS.

Personally, I am just fine and dandy with the NHL being the 4th, 5th, hell, even 6th sport in the states. As long as the game maintains integrity and rinks keep having good attendence numbers(never really been a problem in the NHL in general outside of poorly managed clubs) the game will survive.


Joe Sakic does not need to make 20-30 million dollars a year. Big money like that(not that 6.75 is not a big pile of cash) wrecks players. You don't know how sick I am of the steriods problem in baseball, drugs and attitude problems in the NFL, and the crap that the NBA has become. Being big TV draws IMO has wrecked all 3, both on and off the field/court.

While I would like the NHL to get the credit it deserves for having a great game, I am perfectly fine with the game being the best kept secret in North American sports.

This, is MY NHL

 

[RyanM]

No one's denying the fact that teams give away tickets, it's just that some teams give a whole lot more than others.

How do free tickets affect the cap? If they're free, the team is not bringing in any money for them. Are they counting the tickets as sold at face value and in turn negatively affecting their own(and the leagues) revenues?

Personally I don't see why it is an issue other then for the counting of ***** in the seats at the end of the season.

 

[Trizent]

Does anyone know how they consistant increase revenues when US tv dollars are almost completely insignificant?
Is it a result of the additional money from Canadian TV (CBC\TSN), or are they simply increasing ticket prices.
If they plan on consistantly increasing total revenue with increases in ticket price they will eventually hit a wall.

No additional Canadian TV money until the 08-09 season. CBC and TSN's current deal expires after next season. CBC of course re-upped for $100M a year beginning with 08-09. TSN expected to re-up shortly, but aren't content with the ~$45M price tag on the cable deal.

 

[Ted Hoffman]

Does anyone know how they consistant increase revenues when US tv dollars are almost completely insignificant?
Is it a result of the additional money from Canadian TV (CBC\TSN), or are they simply increasing ticket prices.
If they plan on consistantly increasing total revenue with increases in ticket price they will eventually hit a wall.

I'd post the complete answer given in the story that the link points to, but then I'd pretty much have posted the entire article ... so I'll post one sentence from it:

“The percentage increases were across the board across all lines of our business,” NHL Deputy Commissioner Bill Daly said.

 

[Whiplash27]

No one's denying the fact that teams give away tickets, it's just that some teams give a whole lot more than others.

Tickets that are given away are not counted as revenue, so what does that have anything to do with it?

I think it would be illegal for the league to give away for example 100,000 tickets in a season at an average face value of $40 a piece and put $4,000,000 of revenue in the books.

I think a big part has to do with
A) Increasing ticket prices
B) Emerging Smaller Markets having good teams which means more attendance in smaller markets while the big markets are normally consistant.

 

[bleed_oil]

I'd post the complete answer given in the story that the link points to, but then I'd pretty much have posted the entire article ... so I'll post one sentence from it:

A better question is why should I believe him? Looking at the TV numbers from some of these US cities for the playoffs, I just wonder if anyones watching.
If all they do is consistantly increase ticket prices and hit up there core (small but hardcore) audiences over and over again, then how long can you do that for.

 

[Wetcoaster]

A better question is why should I believe him? Looking at the TV numbers from some of these US cities for the playoffs, I just wonder if anyones watching.
If all they do is consistantly increase ticket prices and hit up there core (small but hardcore) audiences over and over again, then how long can you do that for.

Since about 1917 when the NHL was formed?

 

[bleed_oil]

Since about 1917 when the NHL was formed?

Do you have any data to indicate that ticket prices have increased in the last 10 years at the same rate they did prior to that? I seriously doubt it, especially considering the main expense for teams (player salaries) have only steeply increased in the last 10 year and were flat prior to that.
Additionally the general popularity of the sport in the US had declined in the last 10 years, by all accounts - creating trends that you can't account for historically.

 

[Ted Hoffman]

Well gosh ... why should you believe him?

I'll raise the point yet again (which NO ONE has attempted to explain away): The numbers that each team reports are audited by an outside firm, then compiled and given to the NHLPA for review. Whatever the league revenues are on that report that goes to the NHLPA, that's what determines how much money the players are eligible to receive (and what the salary cap range is going to be).

Let's assume the NHL is fudging numbers and says to the NHLPA, "We generated $2.25 billion in revenues" but actually generated only $1.9 billion. With the lower number, the players get 54% or $1.026 billion; with the higher number, the players get 55.25% or about $1.243 billion. That's $217 million going to the players based on a report of $350 million in non-existant revenue - $217 million that comes straight out of the bottom line for all of the teams in the league. It would also mean that players would be getting over 65% of actual ($1.9 billion) league revenues.

Didn't we lose a season because owners were tired of seeing 65%-75% of revenues go to the players? Didn't they say that paying that much out was completely unsustainable and that the percentage had to go down? So why in the world would the owners over-report revenue to give the players more money than they should be getting, thus virtually guaranteeing that owners as a whole lose money and putting player salaries as a percentage of league revenues to levels seen about 2-3 years before the lockout?

As has been stated numerous times, the revenue the league gets from television rights is proportionately small compared to the size of the whole pot. Let's say they're 15% of total revenues; if all other revenue goes up 5% and the price received for TV rights goes down 25% because of low ratings, league revenue are still going to go up. However ... since the price paid for many of these contracts extends out for years, low ratings will not have an impact on the price received each year except when a contract is up for renewal - and even then, it's debateable. Baseball has had declining TV ratings for years, and it didn't stop Fox, TBS, and ESPN from joining together to offer $3 billion for the rigths to broadcast games for the next 7 years.

If you want to doubt whether the league is going to have sustained revenue growth going forward, fine ... but rest assured, if the league says revenues are about $2.2 billion, you can bet that they are indeed $2.2 billion.

 

[bleed_oil]

Well gosh ... why should you believe him?

I'll raise the point yet again (which NO ONE has attempted to explain away): The numbers that each team reports are audited by an outside firm, then compiled and given to the NHLPA for review. Whatever the league revenues are on that report that goes to the NHLPA, that's what determines how much money the players are eligible to receive (and what the salary cap range is going to be).

Let's assume the NHL is fudging numbers and says to the NHLPA, "We generated $2.25 billion in revenues" but actually generated only $1.9 billion. With the lower number, the players get 54% or $1.026 billion; with the higher number, the players get 55.25% or about $1.243 billion. That's $217 million going to the players based on a report of $350 million in non-existant revenue - $217 million that comes straight out of the bottom line for all of the teams in the league. It would also mean that players would be getting over 65% of actual ($1.9 billion) league revenues.

Didn't we lose a season because owners were tired of seeing 65%-75% of revenues go to the players? Didn't they say that paying that much out was completely unsustainable and that the percentage had to go down? So why in the world would the owners over-report revenue to give the players more money than they should be getting, thus virtually guaranteeing that owners as a whole lose money and putting player salaries as a percentage of league revenues to levels seen about 2-3 years before the lockout?

As has been stated numerous times, the revenue the league gets from television rights is proportionately small compared to the size of the whole pot. Let's say they're 15% of total revenues; if all other revenue goes up 5% and the price received for TV rights goes down 25% because of low ratings, league revenue are still going to go up. However ... since the price paid for many of these contracts extends out for years, low ratings will not have an impact on the price received each year except when a contract is up for renewal - and even then, it's debateable. Baseball has had declining TV ratings for years, and it didn't stop Fox, TBS, and ESPN from joining together to offer $3 billion for the rigths to broadcast games for the next 7 years.

If you want to doubt whether the league is going to have sustained revenue growth going forward, fine ... but rest assured, if the league says revenues are about $2.2 billion, you can bet that they are indeed $2.2 billion.

You've written an detailed analysis of the wrong issue.
One issue is, can any of this revenue growth be sustained without television money. My opinion, No
Two, the total growth is a league wide average. I would suspect that there is a huge difference in growth between the top 8 teams and the weaker bunch (Phoenix, Atlanta, Nashvile,,,) at the bottom of the list

 

[bleed_oil]

As has been stated numerous times, the revenue the league gets from television rights is proportionately small compared to the size of the whole pot. Let's say they're 15% of total revenues; if all other revenue goes up 5% and the price received for TV rights goes down 25% because of low ratings, league revenue are still going to go up. However ... since the price paid for many of these contracts extends out for years, low ratings will not have an impact on the price received each year except when a contract is up for renewal - and even then, it's debateable. Baseball has had declining TV ratings for years, and it didn't stop Fox, TBS, and ESPN from joining together to offer $3 billion for the rigths to broadcast games for the next 7 years.
If you want to doubt whether the league is going to have sustained revenue growth going forward, fine ... but rest assured, if the league says revenues are about $2.2 billion, you can bet that they are indeed $2.2 billion.

Why is it debateable? Baseball is critically different from hockey. Despite its low ratings, it holds a cultural spot in American society that creates the possability of high ratings. Hockey, in a place like Atlanta - where 8,800 viewers watch a playoff game on tv, does not.
What makes you think NBC won't drop hockey games completely next time there deal is up and Versus won't decrease the size of its contract?
Eventually that will effect ticket revenue, why dont many people go to NLL games? Due to poor TV presence

 

[Ted Hoffman]

One issue is, can any of this revenue growth be sustained without television money. My opinion, No

Then how did the NHL get from $732 million in revenue in 1993-94 to $2.2 billion or so this past season? (Hint: it sure as hell wasn't due to TV money.)

Two, the total growth is a league wide average. I would suspect that there is a huge difference in growth between the top 8 teams and the weaker bunch (Phoenix, Atlanta, Nashvile,,,) at the bottom of the list

The league was led in ticket revenue growth by Carolina (32.7 percent), Nashville (24.1 percent) and Edmonton (21.8 percent), all of which saw major increases in paid attendance from 2005-06. Carolina’s average paid attendance grew from 13,258 to 15,315, while Nashville’s grew from 12,629 to 13,589.

Hmm ... I'm going to guess that Atlanta also saw revenues increase due to making the playoffs. Phoenix probably didn't, but [I'll throw this one in for free] Carolina clearly did, and that's before factoring in the revenue they got from Stanley Cup merchandise. And again, none of those increases had anything to do with TV money.

Next?

 

[bleed_oil]

Then how did the NHL get from $732 million in revenue in 1993-94 to $2.2 billion or so this past season? (Hint: it sure as hell wasn't due to TV money.)

Yes that revenue was likely from an increase in ticket prices. Exactly the point discussed with Westcoaster above. Non-sustainable growth IMO

Hmm ... I'm going to guess that Atlanta also saw revenues increase due to making the playoffs. Phoenix probably didn't, but [I'll throw this one in for free] Carolina clearly did, and that's before factoring in the revenue they got from Stanley Cup merchandise. And again, none of those increases had anything to do with TV money.
Next?

All those "revenue increases" you keep talking about are likely due to ticket prices increases for the most part. That cant be sustained in the long run in markets where you dont have support of the general public
Next?

 

[Sotnos]

Yes that revenue was likely from an increase in ticket prices. Exactly the point discussed with Westcoaster above. Non-sustainable growth IMO

All those "revenue increases" you keep talking about are likely due to ticket prices increases for the most part. That cant be sustained in the long run in markets where you dont have support of the general public
Next?

You think ticket prices are suddenly going to hold steady? Not sure what you're arguing here.