Toronto Maple Leafs Now Worth $1.3 Billion

Forbes released their list of the most valuable franchises in the NHL earlier today.

The Toronto Maple Leafs currently lead the pack with a franchise value of $1.3 billion. This 10-figure valuation comes despite the fact that the franchise has struggled mightily on the ice for the past decade and has not won a championship since 1967.

Two more franchises - the New York Rangers ($1.1 billion) and Montreal Canadiens ($1 billion) - have valuations of at least a billion dollars. A number of other franchises, including the Chicago Blackhawks and Vancouver Canucks, are on the verge of breaking the billion dollar mark.

Forbes estimates that the average NHL franchise value is $490 million, up 18.6% from the previous year. Much of this large jump in average valuation can be attributed to a lucrative new TV deal that the league inked with Rogers Communications for the rights to NHL broadcasts in Canada. In addition, league attendance continues to be very strong and the game continues to gain traction in a number of key US markets, including Los Angeles.

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It's almost unbelievable to continue that the average NHL franchise value was just $163.3 million prior to the 2004-05 lockout. At the time, the league's most valuable franchise was the New York Rangers at $282.0 million. The Toronto Maple Leafs were #2 on the list with a valuation of $280.0 million.

Three teams - the Carolina Hurricanes, Pittsburgh Penguins and Buffalo Sabres - were valued at right around $100 million at the time (the Penguins franchise ended up drafting Sidney Crosby and saw its value soar by hundreds of millions of dollars).

A number of factors contributed to the stratospheric rise in NHL franchise values.

Let's start with the two lockouts that completely changed the business of the league. The league was able to institute a hard salary cap in its first lockout and lower the percentage of revenues that it shares with the players in the second lockout. As of this moment, the league and its players share revenues 50/50.

In addition, the NHL has benefitted from advertisers throwing even more advertising dollars at professional sports. As we've talked about before, people don't usually record professional sports games to watch at a later time - instead, they consume the programming live, and this means that viewers will willingly sit through an avalanche of commercials. This has made sports programming very valuable to advertisers.

For the NHL, attendance has continued to trend higher, even with most franchises increasing their ticket prices. The uptick in interest for the NHL has translated into better TV deals, as evidenced by the Rogers Communications deal that was mentioned above.

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The NHL is now doing about $4 billion in revenues per year and has seen its salary cap increase dramatically over the past decade. Sure, the league continues to be the smallest of the "Big Four" in terms of revenues, but the NHL is currently very healthy as a business.

Source: Forbes.com - The Most Valuable NHL Teams

Filed under: General Knowledge