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

[Ted Hoffman]

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

Fine, let's assume that the growth rate for gate receipts stagnates because ticket prices cannot rise any higher due to a lack of support from the general public, and that TV revenues either hold steady or (gasp!) decline due to low ratings.

1. There's other sources of revenue available to the league. Sponsorships? Merchandise? Team-specific revenue sources? All of those could easily push leaguewide revenues up even if the two categories above hold steady.
2. The amount that the players get at the end of the year is strictly tied to the amount of revenue the league generates; if contracts pay out more, the players have to pay back to the owners through escrow (like they will in '06-07). If contracts pay out less, the owners have to pay to the players (like they did in '05-06) ... so I (and I'm sure I'm not the only one here) don't get what you're trying to allege here.
3. As Sotnos states ... the assumption that ticket prices will hold steady flies in the face of evidence from every other major sport.

 

[bleed_oil]

Fine, let's assume that the growth rate for gate receipts stagnates because ticket prices cannot rise any higher due to a lack of support from the general public, and that TV revenues either hold steady or (gasp!) decline due to low ratings.

1. There's other sources of revenue available to the league. Sponsorships? Merchandise? Team-specific revenue sources? All of those could easily push leaguewide revenues up even if the two categories above hold steady.
2. The amount that the players get at the end of the year is strictly tied to the amount of revenue the league generates; if contracts pay out more, the players have to pay back to the owners through escrow (like they will in '06-07). If contracts pay out less, the owners have to pay to the players (like they did in '05-06) ... so I (and I'm sure I'm not the only one here) don't get what you're trying to allege here.
3. As Sotnos states ... the assumption that ticket prices will hold steady flies in the face of evidence from every other major sport.

Every item you list above for revenue growth is predicated on general interst. Why would a corporation in say... Atlanta, sponser a team who gets 8,800 viewers tuning into a game. Do you think for some reason that companies like to throw away money into a black hole? Merchandise? Again, predicated on public interest.

As for point 3 above, I think tv ratings clearly show that the NHL is NOT a major sport like MLB, NBA or NFL in the US. So why should your assumption hold?
IMO indefinite ticket prices increases will see resistance at some point from the public in this situation when you lack a market that appeals to a broad base you are asking for trouble.
Next?

 

[bleed_oil]

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

Like I asked above, does anyone have data to show that ticket prices increases in the last 10 years are at the same rate as those before?
I doubt it. I dont get what you are arguing either. Do you mean to say that small fan base for NHL hockey in the southern states will tolerate ticket prices increases to any extent?

 

[frivolousz21]

Any league that generates 2.2 billion is a major sports league.

with the way the NHL is moving over the internet...there will be other revenue streams.

without a big time American TV deal the revenue wont sky rocket.

 

[Sotnos]

Do you mean to say that small fan base for NHL hockey in the southern states will tolerate ticket prices increases to any extent?

I don't see where anyone said that. Prices for everything go up, people accept this for goods/services that that want or need, so what is your point? You DO realize that not every team tries to rip off their fans to the tune of a 20+% increase every year, right?

 

[Sotnos]

Any league that generates 2.2 billion is a major sports league.

with the way the NHL is moving over the internet...there will be other revenue streams.

without a big time American TV deal the revenue wont sky rocket.

It seem some people think the NHL is operating in a vaccuum, and no new streams of revenue are possible outside of tickets or tv.

 

[frivolousz21]

It seem some people think the NHL is operating in a vaccuum, and no new streams of revenue are possible outside of tickets or tv.

the american media doesnt help much either....in st louis most of the nhl playoff games have been out-watched over nba games...

expecially the Det games.

however...there is still 3 times more nba talk..

why?

because most of the local radio hosts dont know much about hockey.

my friends who used to love the NHL 10 yrs ago..when we were kids...are interested..

when st louis wins again... I think the nhl locally here will explode in popularity

 

[GSC2k2*]

It seem some people think the NHL is operating in a vaccuum, and no new streams of revenue are possible outside of tickets or tv.

A lot of people still stick by the old canard that the NHL is a "gate-driven" league, when in fact barely half of their revenues come from ticket sales. They get a little more from concessions, but there is a huge chunk of revenue that the NHL gets from sources other than the paying fan.

 

[GSC2k2*]

Every item you list above for revenue growth is predicated on general interst. Why would a corporation in say... Atlanta, sponser a team who gets 8,800 viewers tuning into a game. Do you think for some reason that companies like to throw away money into a black hole? Merchandise? Again, predicated on public interest.

As for point 3 above, I think tv ratings clearly show that the NHL is NOT a major sport like MLB, NBA or NFL in the US. So why should your assumption hold?
IMO indefinite ticket prices increases will see resistance at some point from the public in this situation when you lack a market that appeals to a broad base you are asking for trouble.
Next?

Not hardly. The only interest that matters is that which translates into dollars. The NHL does not care if folks who make $6.50 an hour like hockey or not - nor should they, because they do not have the money to spend on the product.

As to the sponsorship point? Well, Atlanta has sponsors, so I guess the answer to your question above regarding sponsors is "because they do".

 

[bleed_oil]

I don't see where anyone said that. Prices for everything go up, people accept this for goods/services that that want or need, so what is your point? You DO realize that not every team tries to rip off their fans to the tune of a 20+% increase every year, right?

Yes of course prices go up indexed by inflation, I can accept as much. But you have an incredibly poor understanding of economics if you think that the NHL ticket price increases in the last 10 yrs are anything close to inflation.
So again this goes back to my original question, with tv ratings showing hockey has a tiny support base in the US, why should these revenue increases be expected at the current rate in the future?
As for online revenues and that sort of thing, I doubt very much that they are relevant. The NHL streamed games this year for free on Yahoo, if anything it probably cost them money.

 

[GSC2k2*]

Yes of course prices go up indexed by inflation, I can accept as much. But you have an incredibly poor understanding of economics if you think that the NHL ticket price increases in the last 10 yrs are anything close to inflation.
So again this goes back to my original question, with tv ratings showing hockey has a tiny support base in the US, why should these revenue increases be expected at the current rate in the future?
As for online revenues and that sort of thing, I doubt very much that they are relevant. The NHL streamed games this year for free on Yahoo, if anything it probably cost them money.

They may have been free on Yahoo, but I would be willing to bet that Yahoo paid the NHL for them. The NHL is content. Yahoo uses the content to sell its advertising.

 

[bleed_oil]

Not hardly. The only interest that matters is that which translates into dollars. The NHL does not care if folks who make $6.50 an hour like hockey or not - nor should they, because they do not have the money to spend on the product.

As to the sponsorship point? Well, Atlanta has sponsors, so I guess the answer to your question above regarding sponsors is "because they do".

I'm sorry whats the correlation between personal income and any of the points I made?
If you are referring to hockey demographics being economically favorable, 1)I've never seen hard information proving that 2) they have the be EXTREMELY favorable when your fan base is so small you get 8,800 fans viewing your playoffs games

As for the second you point your brought up about sponsership, yes a team like Atlanta would have sponsership, but in proportion to fan base. If you think corporations will make mega-dollar sponnsership investments in a product with little following you are completely wrong. There are entire departments of employees in a company ensuring due dilligence prior to an investment being made. They dont just burn money for the fun of it despite common perception.

 

[kdb209]

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?

It depends on who the comp tickets are going to and why. If they are going to sponsors (or as part of any barter transcation), the face value of the tickets is included in the teams' HRR (Hockey Related Revenues) for determining the cap.

 

[bleed_oil]

They may have been free on Yahoo, but I would be willing to bet that Yahoo paid the NHL for them. The NHL is content. Yahoo uses the content to sell its advertising.

you may be willing to bet that, but dont have any proof. The NHL IMO is doing it for exposure. You could'nt watch those same games in Canada (I tried) because they dont need exposure here.

 

[frivolousz21]

They may have been free on Yahoo, but I would be willing to bet that Yahoo paid the NHL for them. The NHL is content. Yahoo uses the content to sell its advertising.

Right.

every time you went to a highlight or a live feed you had to watch a advertisement video.

earlier in the year...yahoo NHL polls would get 30 to 50K a day votes.


im sure the NHL gets money from the advertising before highlights and live games.

NHL fans are a passionatte base...thats why a couple years ago..on ESPN.com they did a poll about the NBA vs the NHL and the NHL won every category...why?

because NHL fans are deeply involved..probably why the league can sustain players making over 5 mil per yr.

look at the NBA tv ratings..from the regular season to playoffs the jump hundreds of percentage.

the nhl barely goes up...which shows the nhl in america has less fans....but they are passionate and spend money on the game...

 

[MAROONSRoad]

They may have been free on Yahoo, but I would be willing to bet that Yahoo paid the NHL for them. The NHL is content. Yahoo uses the content to sell its advertising.

Could it be a revenue sharing deal? Just asking.

GHOST

 

[MAROONSRoad]

I'm sorry whats the correlation between personal income and any of the points I made?
If you are referring to hockey demographics being economically favorable, 1)I've never seen hard information proving that 2) they have the be EXTREMELY favorable when your fan base is so small you get 8,800 fans viewing your playoffs games

As for the second you point your brought up about sponsership, yes a team like Atlanta would have sponsership, but in proportion to fan base. If you think corporations will make mega-dollar sponnsership investments in a product with little following you are completely wrong. There are entire departments of employees in a company ensuring due dilligence prior to an investment being made. They dont just burn money for the fun of it despite common perception.

Corporate sponsorship dollars, in-arena signage, TV advertising dollars for local TV broadcasts etc. are all related to the number of fans. If you have few fans, those dollars will go down when contracts come up for renewal. I posted an article about this very point in the TV rating and revenue thread.


http://www.nashvillepredators.com/partnerships/InArenaSignage.asp

GHOST

 

[mooseOAK*]

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.

I live in a city that can be termed a non-traditional US market. When I moved here 14 years ago there was one rink, now there are four not to mention ice rink expansion occurring in the outlying areas. There are more kids playing baseball of course but that number is going down while the number of kids playing hockey is going up.

 

[kdb209]

Corporate sponsorship dollars, in-arena signage, TV advertising dollars for local TV broadcasts etc. are all related to the number of fans. If you have few fans, those dollars will go down when contracts come up for renewal. I posted an article about this very point in the TV rating and revenue thread.


http://www.nashvillepredators.com/partnerships/InArenaSignage.asp

GHOST

Actually, Corporate sponsorship dollars and in-arena signage are not necessarily related to the number of NHL fans.

For Arenas which are controlled by a Club Affiliated Entity (the team owns and operates the arena or controls the master lease on the arena) 65% of all sponsorship and advertising revenues (including naming rights) generated by the arena (NHL and non-NHL events) is included in the teams HRR - for teams which share an arena with an NBA team, the percentage is 32.5%.

 

[MAROONSRoad]

Actually, Corporate sponsorship dollars and in-arena signage are not necessarily related to the number of NHL fans.

For Arenas which are controlled by a Club Affiliated Entity (the team owns and operates the arena or controls the master lease on the arena) 65% of all sponsorship and advertising revenues (including naming rights) generated by the arena (NHL and non-NHL events) is included in the teams HRR - for teams which share an arena with an NBA team, the percentage is 32.5%.

Of course not all the dollars are booked as hockey revenue, especially in arenas with multiple teams. I don't see how anyone can deny the basic point: less fans, less viewers, less interest in a community = less interest by corporations to pay large amounts of money to be associated with an activity.

GHOST

 

[Fugu]

A lot of people still stick by the old canard that the NHL is a "gate-driven" league, when in fact barely half of their revenues come from ticket sales. They get a little more from concessions, but there is a huge chunk of revenue that the NHL gets from sources other than the paying fan.

Please, GC, we covered this earlier! Gate receipts and 'in arena sales' is what Levitt called it.

Such as?

 

[Sotnos]

It's amazing how:

- A positive thread with GOOD news about the NHL is somehow made out to be a bad thing...but only for certain markets.
- No matter who else it's bad for, it's a good sign for Winnipeg.
- All the Winnipeg boosters seem to be the same person, playing bad cop/good cop.

 

[Fugu]

Of course not all the dollars are booked as hockey revenue, especially in arenas with multiple teams. I don't see how anyone can deny the basic point: less fans, less viewers, less interest in a community = less interest by corporations to pay large amounts of money to be associated with an activity.

GHOST

I think this has something to do with the number of eyeballs line of thinking....

 

[bleed_oil]

I live in a city that can be termed a non-traditional US market. When I moved here 14 years ago there was one rink, now there are four not to mention ice rink expansion occurring in the outlying areas. There are more kids playing baseball of course but that number is going down while the number of kids playing hockey is going up.

no offense man, but 3 additional rinks in 14 years is hardly what I would call exponential growth. Good to hear things are working out where you're at though

 

[bleed_oil]

It's amazing how:

- A positive thread with GOOD news about the NHL is somehow made out to be a bad thing...but only for certain markets.
- No matter who else it's bad for, it's a good sign for Winnipeg.
- All the Winnipeg boosters seem to be the same person, playing bad cop/good cop.

I just enjoy giving people a reality shock, I'm not particulerly pro or anti Winnipeg.
The truth is the truth