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NHL Team Values 2020: Hockey's First Decline In Two Decades
The NHL elite are holding strong thanks to local TV deals, but the rest of hockey remains stuck in the penalty box.
NHL Team Values 2020: Hockey's First Decline In Two Decades.
The Tampa Bay Lightning celebrate their Stanley Cup victory over the Dallas Stars in September.
The bittersweet win arrived without the financial spoils that normally go with it.
Dave Sandford/NHLI via Getty Images.
The NHL elite are holding strong thanks to local TV deals, but the rest of hockey remains stuck in the penalty box.
T he Tampa Bay Lightning won the Stanley Cup in late September, but it did not result in the huge windfall that typically comes with winning the National Hockey League's championship.
Blame the pandemic.
It pushed the playoffs to neutral sites devoid of fans, robbing "home" teams of critical revenue from selling tickets, beer and hot dogs, which for two previous Cup winners—the St.
Louis Blues and the Washington Capitals—meant more than $20 million.
On top of that, the league played only 85% of its regular-season games with fans and is looking like it is still on thin ice: The 2020-21 season, which in a normal year would already be two months in, might not start until mid-January, knocking off one-third of the 82-game regular season.
Nowadays, jam-packed arenas are a pipe dream, as is the cash from tickets, suites, concessions, sponsorships and parking, which account for more than 70% of total revenue in a typical season .
The result: The average NHL team value has fallen 2%, to $653 million, the first decline since 2001.
Revenue for the league totaled $4.4 billion during the 2019-20 season, 14% less than the previous year.
Operating income was $250 million, down 68%.
That's left many owners scrambling for a lifeline.
"NHL franchises will be challenged to find creative ways to offset the impact of pandemic-inflicted operating losses," says Drew Dorweiller, a managing director at Montreal-based investment bank IJW & Co.
" One of these strategies will likely be to raise capital through sales of minority stakes in NHL teams to investors." The league's five most valuable teams—the New York Rangers ($1.65 billion), the Toronto Maple Leafs ($1.5 billion), the Montreal Canadiens ($1.34 billion), the Chicago Blackhawks ($1.085 billion) and the Boston Bruins ($1 billon)—accounted for almost a quarter of the league's revenue.
Without them, the league would have lost $50 million.
Those league elites enjoy fat local cable television deals that make up for the NHL's paltry national TV deals (the U.S.
and Canadian packages paid each team $20 million combined last season, compared with $260 million per team in the NFL).
The Canadiens collect more than $50 million, followed by the Maple Leafs, at over $40 million.
The Rangers' cable deal delivered slightly less than $35 million.
And while the Blackhawks and the Bruins are not among the top quartile in cable television revenue, they are the lone hockey teams in huge markets with rabid fan bases.
The NHL did salvage its national TV money by holding last season's playoffs in Edmonton and Toronto "bubbles," but it missed out on more than $200 million in arena playoff revenue that largely falls to the bottom line, in addition to subsidizing the NHL's weaker teams through revenue sharing.
The Florida Panthers lost nearly $30 million, in part because their revenue-sharing check was roughly $16 million, instead of the expected $24 million.
The NHL's collective bargaining agreement calls for a 50-50 split in revenue between teams and players, with an escrow account in place to ensure the even split.
The league expected revenue to hit roughly $5.4 billion last season and did not hold back enough of player paychecks to account for the pandemic-fueled revenue drop.
The result: Players received more than half the pie.
Nine teams posted double-digit operating losses—four more than in the 2018-19 season.
The champion Lightning posted an operating loss (earnings before interest, taxes, depreciation and amortization) of $11 million, according to Forbes estimates.
The New York Islanders lost the most ($39 million), yet we held their value flat versus a year ago at $520 million.
They generated the NHL's second-lowest revenue ($93 million after revenue sharing) while splitting their home games between the Barclays Center and Nassau Coliseum, but better financial times are ahead as the Isles move into their new arena by Belmont Park on Long Island for the 2021-22 campaign.
Nine teams posted double-digit losses—four more than in the previous season.
The champion Lightning posted an operating loss of $11 million.
Some teams have borrowed money to mitigate losses, with average team debt rising to $144 million, from $127 million last year, by our count.
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