Everyone knows that sport is a big business. Irrespective of what kind of game is played, teams and leagues seek to profit from investing in it. If you are an ice hockey fan, you may be wondering What the Annual Revenue of the NHL is.
Questions like; Is the NHL racking enough annual revenue like other sports leagues? will continue to cross your mind.
NHL Yearly Revenue Chart:
|Year||Revenue (USD Billions)|
As you can see, over the last ten years, the NHL has significantly increased its revenue. The one dip in 2012/13 was due to an NHL lockout that limited the year to a 48 game season.
I expect the league to continue to grow their revenues significantly in the upcoming years. Let’s take a look at what makes up these revenues and where the greatest room for growth is.
What makes up the NHL Yearly Revenue?
1. Ticket Sales
the NHL still relies more on ticket sales as a proportion of its revenue than the other major sports. As a matter of fact, the largest portion of the NHL revenue comes from ticket sales.
In Toronto, the average ticket price is $386 Canadian ($300USD). On the other hand, you can still get the cheapest seats for about $30 in Calgary.
2. Luxury boxes
This is quite expensive and also racks in the money for the NHL annually.
The NHL still makes a sizeable portion of its tv contract. The NHL national contract for Canada is actually worth more than that of the US, even though Canada has 1/10 of the population. In Canada, Rogers paid $600, whereas the U.S. national contract is $200 million.
4. Merchandise and Concession Sales
This involves all the money that is made from sales of t-shirts, jerseys, parking, popcorn, and those $10-12 beers.
5. Royalties from licensing
The NHL gets a lot of money from the licensing of its logos, images of players, and association with products.
If you have ever bought an NHL product, it is likely that the NHL did not produce it, but, instead, the NHL sells the permission for a company to make a product with its name.
Where will the growth of NHL revenues come from?
1. Expansion fees
The NHL has recently increased their revenue through the expansion of the Vegas Golden Knights, which accounted for $500 million to their coffers.
The owners swung a good deal as they did not need to count it as Hockey Related Revenue – this means they didn’t need to share it with the players.
Anyway, Vegas has increased the revenue of year-to-year with merchandise sales, local tv, ticket sales. Apparently, the NHL is going to do this again with Seattle, who enters the league in 2021-22.
The expansion fee was $650 million and Seattle has already sold all of its season tickets and has a waiting list. There is more money coming to league operations.
Any U.S. State can now offer legalized sports betting. All have taken different approaches and some are still considering their offers.
However, the NHL is definitely partnering in the rollout. This could be a potential cash cow as the NHL looks to get a slice of the revenue of people betting on its games.
3. TV Revenue Growth
The biggest jump in NHL revenue will be the renegotiation of the U.S. national television deal. The $200 million/year they got from NBC is a rounding error when compared to the NFL, MLB and the NBA.
I am not saying that the NHL will get anywhere near those league deals, but they will get a substantial raise. The league has continued to increase viewership.
Moreso, Game 7 of the Boston – Blues series at 9 million views was the highest ever for a game. People who tend to watch and go to NHL games have a higher than average income, and sports tv contracts continue to rise.
All of this points to good things for the NHL when their U.S. tv contract with NBC sports comes due. Watch for ESPN and Fox get back in the fight, but I think a combination of NBCSports and ESPN will take home the rights.
4. Increased game-day revenue
This means an increase in ticket costs. NHL teams are always looking for ways to increase sales in-house, whether that is from more luxury boxes, restaurants, or special game experiences such as behind-the-scenes tours.
For example, going on the ice after a preseason game to get a picture with a few Flames players will cost extra to the price of the ticket!
Main Expenses of Each Team:
The NHL’s largest expense (and this should come as no surprise) is the player’s salaries. An average NHL team spends between $75 to $80 million a year on players’ salaries.
The rest of the money will go to the front-office staff, travel, local marketing, and building operations.
No one is quite sure how much money a team makes (or loses), but the setup with the players through the collective bargaining agreement is to split revenues 50/50.
This means that both players and owners share in the growth of the game. The one thing I would wonder is what is counted as revenue. I am fairly certain that the owners have some revenue sources that are not counted towards the 50/50 split (like expansion fees).
How does this compare with other leagues?
The NHL yearly revenues of $5 billion dollars is a lot of money, no doubt about that. However, this number pales in comparison to the annual revenues of other major sports leagues in the U.S.
Here are the numbers from other sports:
The main difference between the leagues is revenue generated through television deals. The size of the television deals the other three leagues have negotiated dwarf the NHL deal in the United States.
The NHL is partially saved because it is able to negotiate a large television deal with the hockey-crazed Canadian television market.
The NHL makes about $5 billion USD in revenue each year. They have significantly grown their revenues over the past 20 years and will continue to do so in subsequent years.