It’s taken a while, but even NHL commissioner Gary Bettman has reached the point where he’ll now hint that the NHL could have some financial problems if the current recessions deepens.
As much as Bettman loves to say (and he did on his XM Radio Program on Thursday) “the NHL is not being impacted as deeply as the other major professional sports leagues in America are,” the fact is, the league is being hammered by this recession. It’s just that nobody inside the league really wants to talk all that much about it.
However, hockey people must face facts. The NHL has no significant U.S. television contract and it has teams in non-traditional markets that have been money-losers since they opened the doors. Now the league is faced with a falling Canadian dollar that, according to Minnesota Wild assistant general manager Tom Thompson, will “substantially impact the ability of the Canadian teams to turn profits,” and it’s been the Canadian teams’ revenues that have driven up the salary cap and put more money in the league’s bank accounts.
When Bettman claims the other major sports leagues will be “impacted” on a larger scale, he’s probably right, simply because the other leagues have more to lose. You can already see the sections of empty seats at NBA games on TV and the NFL has stopped selling out all their stadiums, all the time.
But those close to the business of professional sport seem to agree that the NFL will emerge from the downturn relatively unscathed. It’s just too big and too popular to take a long-lasting hit. Of course, it doesn’t hurt hat the NFL’s TV deal with four major networks is worth $2.2 billion (all figures U.S.). The NHL, on the other hand, is dependent of gate receipts and those receipts can vary wildly as the economy moves up and down. According to Forbes Magazine, the NFL generates an estimated $6.5 billion in annual revenue, Major League Baseball is next $6 billion, the NBA is third at $3.6 billion and the NHL at fourth at $2.5 billion.
However, more than one third of that $2.5 billion is generated by the six Canadian-based franchises. But now that the dollar is hovering around 70 cents US, that number could fall by as much as 30 per cent. If Canadian teams start to struggle, the teams in lousy U.S. hockey markets (not lousy sports markets, but lousy hockey markets) – Phoenix, Tampa, Nashville, Atlanta, South Florida, Carolina, Long Island and Washington, D.C. — could start to shutter or consider moving their operations. Right now, most U.S. owners are deeply in debt — one is already in bankruptcy protection — and all of them desperately need a strong credit industry, an industry now under siege, to survive.
Since 1999, 20 NHL teams have either changed owners or significantly altered their ownership structure, It’s no secret that some franchises have changed ownership two or three times (Islanders, Coyotes, Predators, Lightning). And what’s going to happen in Detroit if the Big 3 automakers go under? The Red Wings, one of the two or three best teams in the NHL and a team that is already in a tremendous hockey market, are already selling some tickets for $9 a game.
According to the Toronto Star, “The Florida Panthers have laid off staff, the Tampa Bay Lightning are said to be a financial basket case, the Phoenix Coyotes are believed to be hanging on by a thread.” Meanwhile, the Atlanta Thrashers owners are in a court battle, the New York Islanders desperately need a new arena that might not be built and the Nashville Predators are still trying to do something with co-owner Bootsie Del Biaggio’s 24 per cent stake.
It is becoming clear that with this recession, hockey is on its death bed in Gary Bettman’s “southern footprint.” He’s the man who took hockey away from Canada and gave it to non-traditional markets and while those non-traditional markets have always struggled, they are now in need of a financial I.V.
Of course, there is a problem. With such a lousy Canadian dollar, why would anyone want to move another franchise to Canada?
That’s why Winnipeg is caught between a rock and a hard place. We have a small arena, only 700,000 citizens, a team that already folded up shop and moved south and a fading Canadian dollar. As much as I believe an NHL team in Winnipeg would draw large numbers of fans, I wonder if that’s enough anymore.
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