New CBA, Canadian TV Deals Continue To Add To NHL Franchise Values
The average value of a NHL franchise has absolutely soared over the past decade or so.
Prior to the lockout that wiped out the 2004-05 NHL season, the three most valuable teams in the NHL were:
New York Rangers, $282.0 million
Toronto Maple Leafs, $280.0 million
Philadelphia Flyers, $264.0 million
Let's fast forward to the 2013-14 NHL season. According to Forbes, the three most valuable franchises in the NHL are:
Toronto Maple Leafs, $1.15 billion
New York Rangers, $850 million
Montreal Canadiens, $775 million
That's right - the most valuable NHL franchise, the Toronto Maple Leafs, has added roughly $900 million in total value over the past decade or so.
According to Forbes, the AVERAGE NHL franchise value of $413 million, up 46% from the year before. This number is staggering when you consider that the AVERAGE value of a NHL franchise is roughly $130 million more than what the most expensive franchise was valued at before the 2004-05 lockout.
So what happened? Why have NHL franchise values sky-rocketed over the past decade?
There are a number of reasons, including:
1) Owner friendly CBA deals. There have been two NHL lockouts over the past decade. The first CBA deal saw the implementation of a hard salary cap, while the second deal so the player's share of revenues drop from 57% to 50%.
2) New TV Deals. The NHL recently signed a monstrous new 12 year deal with Roger's for the national TV rights in Canada. In addition, the NHL signed a US TV deal with NBC a few years ago. The NHL realizes $200 million/yr from their deal with NBC, while the Rogers deal in Canada is worth a little over $400 million/yr. These deals are both significant upgrades over the previous TV deals.
3) Increased TV viewership numbers. The game is doing well as TV viewership numbers have continued to trend higher over the past decade.
4) Attendance is up. Despite two lockouts, fans have continued to flock to games in record numbers.
5) New revenue streams. The NHL's outdoor games have done very well for the league, which is why the league is hosting multiple outdoor games this season, including games in Vancouver and Los Angeles. These games are being run by the NHL and will help to pad the wallets of every NHL team. In addition, the NHL is looking to implement some sort of international tournament (rumours have it being similar to Champions League in soccer) over the coming years.
6) Elimination of Atlanta franchise. The Atlanta Thrashers were one of the NHL's weaker franchises, and they moved to hockey-crazy Winnipeg a few seasons ago.
The future looks bright for the NHL as well. In all likelihood, expansion will take place over the next decade, with teams being eyed for Seattle, Markham and Quebec City. Each expansion team will pony up hundreds of millions of dollars to join the NHL, and this money will be divided amongst the league's other teams.
The Phoenix Coyotes were recently sold to an investor group. The group stated that they weren't buying the Coyotes - instead, they were buying a 1/30th share of the NHL. It's not hard to see why they would think that way, given the tremendous run that the NHL is currently on.
Source: Forbes.com - The NHL's Most Valuable Teams