SBD/November 27, 2013/Leagues and Governing Bodies

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  • NHL Revenues Set To Spike After New TV Deal; Expansion On The Horizon?

    Bettman (l) said that the NHL is not formally looking at expansion in Quebec

    The NHL's "steady rise as a business continued Tuesday when it signed a staggering" 12-year, C$5.2B rights agreement with Rogers Communications, according to Kevin Allen of USA TODAY. The average of C$433M per season "is a significant jump" from the C$160M a year the NHL earned on its last deal for Canadian TV rights. The NHL in '12 signed a 10-year, US$2B deal with NBC for U.S. TV rights. The league was a US$3.3B per year business "before the lockout." NHL COO John Collins said that the league's objective is to "grow revenues beyond" US$4B. Allen writes the latest TV deal "would seem to help put the league on track for that." It was said for many years that the NHL's national TV package "wasn't lucrative enough to have a big impact on team's bottom lines." But with the league's total TV take at approximately US$611M a season, the 30 teams "are sharing a significant amount of money, although players will get 50% of hockey-related revenue." The NHL has its TV rights "locked up for more than a decade, and the new CBA could last" through '22. With those issues "buttoned up, the NHL might be in position to consider expansion." The NHL "has no plans to expand, but many cities are interested." NHL Deputy Commissioner Bill Daly said, "It's a fair question. But I can say, we haven't even gotten this one behind us yet because it is subject to board of governors approval" (USA TODAY, 11/27).

    NORDIQUE QUEST? The GLOBE & MAIL's David Shoalts notes the prospects of the NHL returning to Quebec City "grew brighter with this deal," even if NHL Commissioner Gary Bettman "danced away" from the subject. Bettman said, "It's not something we are embarking on in a formal process." But Quebecor President & CEO Pierre Karl Péladeau, whose company owns the TVA network, "just happens to hold the lease on the new arena that is under construction in Quebec City." Since "much business gets done in the NHL on a you-scratch-my-back basis, it doesn't hurt to have Péladeau indirectly forking over" C$200M or so annually to the league for TV rights. This deal is "yet another home run for Bettman, continuing a hot streak that started last summer when he finally settled the ownership situation" of the Coyotes and then "found owners for two other financial sinkholes" in the Devils and Panthers (GLOBE & MAIL, 11/27).

    A TIP OF THE CAP TO YOU: In Winnipeg, Tim Campbell notes the Canadian TV deal has "the potential to be a windfall in many ways," as it translates to roughly C$10M in revenue "per NHL team next season." Given the new CBA, this will "translate into an instant salary cap increase" of likely between C$4-5M for next season, or "at the latest, the 2015-16 campaign because a year's cap is mostly based on revenues of the previous year." There also could be "a cap bump or bumps in addition to this, especially now the NHL has labour peace and its revenues, now almost a year after the lockout ended, were said to be heading strongly north even before this Rogers deal." It is expected this year's C$64.3M salary cap will "rise well above" C$70M soon (WINNIPEG FREE PRESS, 11/27). YAHOO SPORTS' Nicholas Cotsonika noted as revenues rise, the salary cap and floor "will go up as they used to, so the players will make more money in real dollars." Rich teams "will be able to spend more." But the cap and floor "won't go up at the same rate they would have, because the players make less of a percentage of revenue now." Some teams still "won't be able to keep up, and we could be in the same mess again in a few years." But the "more national revenue the NHL can generate, the better" (SPORTS.YAHOO.com, 11/26).

    KUDOS FOR BETTMAN, COLLINS: YAHOO SPORTS' Greg Wyshynski wrote one of the "winners" of the NHL-Rogers deal is Bettman, who was "at the heart of two work stoppages, but helped lead the League back both times." Bettman has "grown the business in ways no one could have anticipated, and deserves credit for it." The "only knock is where the NHL could be if it weren't for labor hiccups and marketing decisions." Meanwhile, hiring Collins was, "perhaps, Bettman's greatest move as a commissioner." Collins' "unparalleled business sense led to the creation of tent-pole events like the Winter Classic, and his work on the League's rights deals led directly" to the agreement with Rogers (SPORTS.YAHOO.com, 11/26). In Toronto, Mike Zeisberger writes, "Say what you will about Gary Bettman, the man certainly has left a lot of owners smiling because of the cash being stuffed into their pockets." One of Bettman’s "shrewdest moves" was bringing in Collins. The league under Collins guidance has "landed huge TV deals with both sides of the border." He also has "taken the concept of the Winter Classic and run with it." Collins deserves "a lot of credit for bringing the league to where it is today, especially in economical terms" (TORONTO SUN, 11/27).

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