[The Athletic] NHL’s losses will top $1 billion

[robertocarlos]

This isn't news. We knew this months ago. A 30 million dollar loss times 31 teams.

 

[robertocarlos]

Bettman expects NHL financial losses in billions

It is feasible to say if there are no fans by next year the NHL could fold.

Will there be fans?

There won't be any fans. The league will not fold. A contract is a contract. However, when this CBA is done you can expect the average NHL player to earn at least 50% less than they earn today.

 

[robertocarlos]

NHL should just embrace the future.

Selling commercial ad-space is an old-school method of marketing that's rapidly dying. It's called "interruption marketing" and it's amazing they've kept this archaic business model for as long as they have.


If they REALLY want to grow the game, they need to make all games free to watch for everyone all the time.

They need to get rid of the TV time outs. They need to get rid of TV. Go with DZN or something like that.

 

[tarheelhockey]

That would require them breaking even. Which they would love to do in their wildest dreams.

I think he's asking if we're talking about a net loss (ending up -$1B) or a loss in revenue ('making' -$1B).

After reading the article again, it could be either one. Bettman simply said the "losses" will start with a B.

 

[robertocarlos]

It's a net loss of one billion dollars. Revenue is cut in half and expenses remain the same. A $30 million profit per team becomes a $30 million lose per team. The difference is $2 billion. The NHL is a $4 billion enterprise.

 

[Wedontneedroads]

Cancel the season. Everyone gets their draft position from last year.

No take backs.

 

[Regal]

That's not what he wrote though. It's impossible for it to range from millions of dollars to at least $1 billion. At least means at least. There is literally no way around that fact.

The correct use of language would've been if he'd written ''the losses are expected to be at least $1 billion'' or the losses are expected to go from millions of dollars to billions of dollars.

I understand what you mean, and you're right that it would be incorrect if he was saying that the number would be between those two points, but he's not. The use of "go from" suggests moving from one distinct point to another. In doing so, the the object might move through a range, but he's not describing the range itself. For instance, I could say "I'm going to go from Vancouver to just outside Toronto." Here I'm traveling in the space between Vancouver and Toronto, but I'm describing two specific points: "Vancouver" and "just outside Toronto." I'm not describing that my end point will be between these destinations. This is how Bettman is describing the losses. They're increasing from what they would have been in one scenario: "millions", to what they're going to be in the current scenario: "at least a billion." "Go from" eliminates the possibility of the number falling between the two scenarios. This makes your second example incorrect. To describe the losses as being between "millions" and "a billion" you would say something like "The losses are expected to range from the millions to a billion" or "The losses are expected to be between the millions and a billion."

 

[tenken00]

I think he's asking if we're talking about a net loss (ending up -$1B) or a loss in revenue ('making' -$1B).

After reading the article again, it could be either one. Bettman simply said the "losses" will start with a B.

You would have to think that Bettman is referring to net loss, right?

A loss in revenue would have to be in relation to a previous year -

2019-2020 - Forbes estimate $4.4 billion in revenue (2018-2019 $5.04 billion for the last "normal" year) (NHL Team Values 2020: Hockey’s First Decline In Two Decades)

And that's with 85% of regular season games played with normal attendance (and concessions/parking/etc.) - which Bettman also states makes up to 50% for some franchises.

That would mean that television + advertising/merchandise would pretty much have to make up $3.4 billion in a season with no/minimal fan attendance.. and I'm not sure it amounts to that much.

 

[tarheelhockey]

You would have to think that Bettman is referring to net loss, right?

A loss in revenue would have to be in relation to a previous year -

2019-2020 - Forbes estimate $4.4 billion in revenue (2018-2019 $5.04 billion for the last "normal" year) (NHL Team Values 2020: Hockey’s First Decline In Two Decades)

And that's with 85% of regular season games played with normal attendance (and concessions/parking/etc.) - which Bettman also states makes up to 50% for some franchises.

That would mean that television + advertising/merchandise would pretty much have to make up $3.4 billion in a season with no/minimal fan attendance.. and I'm not sure it amounts to that much.

That's a good way to look at it and probably correct. Last summer I did my best to cobble together numbers for a revenue estimate and found the shortfall to be something like 60%.

 

[GirardSpinorama]

A pretty wild idea..

NHL should allow teams (if they want to) to go public in IPOs and raise some liquidity. NHL itself can go public and collect "management fees" from each franchise that gets distributed to share holders.

 

[tarheelhockey]

A pretty wild idea..

NHL should allow teams (if they want to) to go public in IPOs and raise some liquidity. NHL itself can go public and collect "management fees" from each franchise that gets distributed to share holders.

Even with these short term losses, the owners stand to make a lot more money in the long run by retaining ownership and control.

 

[boredguy]

There's a lot of money that doesn't get included in hockey related revenue such as expansion fees.

Never understood why people claim this, sure the 31 other teams get a split of that 650 mil, but that 32nd team is paying it all and is now 650 mil in the hole, so for the league of 32 teams it's revenue neutral.

 

[GirardSpinorama]

Even with these short term losses, the owners stand to make a lot more money in the long run by retaining ownership and control.

They don't necessarily need to sell controlling interest; just a minor stake. With how hot the market is right now, they'll probably see their net-worth go up significantly, assuming they don't mind disclosing their books and take on all the extra responsibilities of a public company.

 

[tarheelhockey]

They don't necessarily need to sell controlling interest; just a minor stake. With how hot the market is right now, they'll probably see their net-worth go up significantly, assuming they don't mind disclosing their books and take on all the extra responsibilities of a public company.

 

[GirardSpinorama]

Never understood why people claim this, sure the 31 other teams get a split of that 650 mil, but that 32nd team is paying it all and is now 650 mil in the hole, so for the league of 32 teams it's revenue neutral.

Nevermind the fact that NHL players are employees and not equity shareholders.

 

[tenken00]

That's a good way to look at it and probably correct. Last summer I did my best to cobble together numbers for a revenue estimate and found the shortfall to be something like 60%.

Yeah, it's hard to pinpoint exactly what revenue is/was and therefore make any accurate statements for this season. At least before anyone could easily find HRR by using the salary cap figures, but that's now thrown out of the window with the flat cap.

I do know that the current yearly revenue from television deals really are worth a lot less than what people think. Just taking a casual look:

NBC deal (up for renewal at the end of this season) (NHL, NBC sign record-setting 10-year TV deal)
$200 million (USD)/ year

Rogers deal $5.232 billion (CAD) for over 12 years (NHL, Rogers announce landmark 12-year deal)
$342.5 million (USD)/ year

So the league makes about $542.5 million USD total in national TV deals this year, or about half a billion only.

Even accounting for local TV deals for all 31 teams
And adding in sponsorships/advertising fees/merchandising
That's still a long way to climb without attendance.

 

[tarheelhockey]

Yeah, it's hard to pinpoint exactly what revenue is/was and therefore make any accurate statements for this season. At least before anyone could easily find HRR by using the salary cap figures, but that's now thrown out of the window with the flat cap.

I do know that the current yearly revenue television deals really are worth a lot less than what people think. Just taking a casual look:

NBC deal (up for renewal at the end of this season) (NHL, NBC sign record-setting 10-year TV deal)
$200 million (USD)/ year

Rogers deal $5.232 billion (CAD) for over 12 years (NHL, Rogers announce landmark 12-year deal)
$342.5 million (USD)/ year

So the league makes about $542.5 million USD total in national TV deals this year, or about half a billion only.

Even accounting for local TV deals for all 31 teams
And adding in sponsorships/advertising fees/merchandising
That's still a long way to climb without attendance.

FWIW I've seen $800M as a ballpark figure for total leaguewide media rights. Can't verify its accuracy... but it doesn't look wrong.

 

[Mikeshane]

It's always funny when owners and players act as if anything they do is for the fans. They do what they do for their own self interest. The fans pay money for hockey which means there will always be people willing to provide that service, if it's not these owners and players then others will step up.

 

[rfournier103]

Regular people are losing their jobs; homes; and lives. Forgive me if I’m not moved by the financial struggles of the billionaire owners that have been overcharging us for decades because we love hockey.

Cry me a river.

I am, however, concerned for all the hardworking people who make their living on game night at the arenas. I feel for them.

The NHL has survived a world war and the Great Depression, and will survive this too. Too much of a cash cow not to. The pandemic won’t last forever, and the NHL will survive.

 

[KaseMeOutside]

But a few teams will need helping out from the league to survive

Alot of entities will need assistance to survive this

 

[metalan2]

Regular people are losing their jobs; homes; and lives. Forgive me if I’m not moved by the financial struggles of the billionaire owners that have been overcharging us for decades because we love hockey.

Cry me a river.

I am, however, concerned for all the hardworking people who make their living on game night at the arenas. I feel for them.

The NHL has survived a world war and the Great Depression, and will survive this too. Too much of a cash cow not to. The pandemic won’t last forever, and the NHL will survive.

Do you realize how many normal people rely on the NHL for their livelihoods though?

 

[Adele Dazeem]

Bettman expects NHL financial losses in billions

It is feasible to say if there are no fans by next year the NHL could fold.

Will there be fans?

No chance of that happening. One billion is pocket change.

 

[rfournier103]

Do you realize how many normal people rely on the NHL for their livelihoods though?

I do, and I’m pretty sure I covered that when I said this:

I am, however, concerned for all the hardworking people who make their living on game night at the arenas. I feel for them.

Anything else?

 

[x Tame Impala]

It'll be amusing next CBA disagreement when people forget about NHL owners losing close to $1 Billion in revenue and calling them selfish and greedy. They could have just said "f*** it" and had no season at all.

 

[Melrose Munch]

It'll be amusing next CBA disagreement when people forget about NHL owners losing close to $1 Billion in revenue and calling them selfish and greedy. They could have just said "f*** it" and had no season at all.

Maybe they should have. It's not like everyone wants to play.