Much has been made lately about the fact that a majority of the NHL’s annual revenue comes from television and media deals. It’s the sole reason the NHL can afford to play to empty arenas, when other hockey leagues cannot. The second biggest source of revenue is money generated from home games. Gate revenue is approximately 36.6% of the NHL’s entire revenue for a season (30% in baseball, 22% in NBA basketball, and 15% in the NFL). In contrast, the AHL generates 70-75% of its annual revenue from fans attending games.
According to industry data specialists Statista, it is estimated that each team will lose an average of 1.31 million U.S. dollars in ticket sales alone for each home game that is canceled due to the coronavirus.
Here is the breakdown of other revenue lost from a home game.
That totals to approximately $1.68 million in revenue per game. In other terms, it takes approximately five home games to pay Ovechkin, four home games to pay Kuznetsov and three homes games to pay Backstrom.
At the time the season was suspended in March 2020, the teams of the NHL had each played between 32 and 37 of their allocated 41 home games.
Steve Simons of the Toronto Sun reported that playing games to empty arenas to complete the 2019-2020 season will mean the NHL will lose nearly $500 million in potential revenue. There is nothing the league can do about that.
However, getting the regular season and playoffs finished, even to empty arenas, will save the league another $500 million in lost revenue that will come from network television and sponsorship.
That’s a huge chunk of change for a league that netted $5.09 billion last season. You can begin to see the League’s relentless desire to complete the 2019-2020 season.
Many have called for the end of the 2019-2020 season, and there is no question that doing so would be the safest thing to do. However, considering the size of potential losses, and the long term affect, such as teams folding, you can see why the league has been steadfast in its desire to complete the season. They have 500 million reasons to complete the season.
By Jon Sorensen