Is The Timing Right for Systemic Change? A Look at Potential Opportunities for the NHL During These Financially Challenged Times

Photo: @Capitals

Times of adversity often give rise to new opportunities for change, as well as provide fertile ground for innovation and the implementation of new ideas. The financial damages sustained from the COVID-19 pandemic are wide and vast, but may also provide a potential opportunity for innovation and net-positive change.

First and foremost, team owners, broadcasters and advertisers need to be agile in these times. Fans also need to be understanding and supportive of potential solutions and coming changes. The league is in a unique space right now, and will need to do business in a very different way, just to simply survive. Longing for hockey the way it was back in February is a pipe dream at this point, as the league is staring at projected losses in the range of $500 million to $1 billion dollars, depending on how the 2019-2020 season is finished.

So, what can be done to begin the road back to sounder financial times?

Related: A Look at Other Potential Revenue Streams For the NHL to Counter Financial losses due to the COVID-19 pandemic.

Uniform Advertising – In some ways, that lack of advertisements on NHL uniforms is a sign of purity to many fans. “Don’t clutter the game for the almighty buck!” In fact, it’s a sore subject for most hockey fans, as the simple thought of player billboards turns ones stomach. However, other leagues have already made the transition. Could this be the time for use of uniform advertisements in the NHL, to help offset the huge losses facing the league? Even if it’s just temporarily for a set period of time? Purists will fight the idea until the end of time, and it’s easy to make the case that once the cow is out of the barn, he ain’t ever coming back. But if you were faced with the option of losing a few teams to bankruptcy, or placing a few more advertisements on player uniforms, what would you do?

NoVa Caps take: allow two new ads on jerseys for two seasons, one for COVID-related businesses and non-profits (hospitals, front line workers, charities, etc) and one ad for pure revenue generation.

Expanded Naming Rights – Also a controversial idea among most hockey purists. “Let’s throw it down to the McDonalds© locker room for an interview with Alex Ovechkin.” Or, “Welcome to the Hooters© ice rink at Capital One Arena” would take some getting use to, to say the least. But we thought the same, and went through the same hesitance when arena naming rights became a thing, and now we barely give it a second thought.

NoVa Caps take: Name it all. (We call naming rights for the bluelines)

Additional In-Arena Ad Space – We dove into this one a bit in an earlier post on Tuesday. Professional sports leagues are scurrying to find additional arena revenue streams for games with no fans in the stands. Draping advertising tarps over empty seats seems like a potential idea, but who has the rights to the advertising value of an empty seat? The team or the broadcasting company? Rights aside, if it makes cash, do it.

NoVa Caps take: Advertise away! (For two seasons).

Technology Acceleration – Would you pay a la cart fees for certain new technologies? Real-time player data? Real-time betting? Individual player cams? The new technologies now available are endless, with some planned for eventual rollout in the future. Accelerate those technologies and make them available to fans as soon as possible. Deploy, learn, redeploy, let’s go!

NoVa Caps take: Mash the gas pedal! (I want my Holtby cam!)

Relocation – Similar to expansion fees, relocation fees would also add a one time infusion of significant cash into the league’s coffers, in the neighborhood of $200 million per relocation. There’s an argument to be made that franchise relocation makes more sense than expansion. “There are teams (see: Arizona and Ottawa) that both need a new building and struggle with attendance. The NHL would be better off long-term if it eliminated those weak links – particularly if they moved downtrodden teams into larger television markets.” former A’s, Grizzlies and 49ers senior executive Andy Dolich explained that by “strengthening the overall product, the league would ultimately be able to drive increases in national broadcasting and sponsorship revenues.” It’s worth mentioning that the league’s current media rights agreement with NBC Sports expires following the ’21-’22 season.

NoVa Caps take: Let a team move, Arizona to Houston = $200 million

Expanded Postseason – Adding teams and rounds to the playoffs means more revenue for the league and more exposure during it’s prime portion of the calendar year. Purists will strike again, and rightfully so, but again, these are unique times.

NoVa Caps take: Expand to 24 teams for two seasons.

Expanded Media Rights – The league’s current media rights agreement with NBC Sports expires following the ’21-’22 season. It should be the last sole-source contract for the league. All other major sports leagues have several broadcasting partners at this point, and it’s time for the NHL to follow.

NoVa Caps take: Award multiple broadcast rights contracts.

New Collective Bargaining Agreement – A new CBA would allow both the League and the Players Association an opportunity to restructure financially, and provide a mechanism for dealing with potential losses accrued from the suspended play due to the COVID-19 virus. The current agreement runs ten years, expiring on September 15, 2022. The current Agreement was ratified by NHLPA membership on January 12, 2013, concluding a four-month lockout by NHL owners.

NoVa Caps take: Do it now.

Owners and broadcasters will need to innovate at rapid pace in the coming days and weeks and fans will also need to adapt and understand. We will continue to explore potential opportunities in these unique times for the NHL.

By Jon Sorensen

About Jon Sorensen

Jon has been a Caps fan since day one, attending his first game at the Capital Centre in 1974. His interest in the Caps has grown over the decades and included time as a season ticket holder. He has been a journalist covering the team for 10+ years, primarily focusing on analysis, analytics and prospect development.
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