What If NHL Fans Don’t Return As Quickly As Expected?

by | Nov 14, 2021 | Soapbox | 3 comments

The COVID-19 pandemic took a toll on NHL revenue over the last two seasons. Shortened seasons saw revenues plummet from a high of $5.09 billion in 2018-19 to $4.37 billion the following season. On May 13, 2021, The Athletic’s Sean Shapiro reported the league missed out on roughly $3.6 billion in revenue in 2020-21 due to lowered attendance.

Prior to the start of the 2021-22 season, NHL commissioner Gary Bettman was optimistic about the league generating $5 billion in revenue barring any interruptions by COVID-19. Earlier in the year, the league signed two new lucrative long-term broadcasting contracts with ESPN and Turner Sports. Teams were able to sell jersey ad patches for the first time plus the league was tapping into other revenue streams such as sports betting and endorsements.

The lifeblood of the NHL remains tickets sales (particularly season-ticket or long-term ticket sales) and the in-arena revenue generated by concessions, merchandise and parking. With teams allowing full attendance with varying COVID protection mandates based on local health and safety protocols, the prospect of reaching Bettman’s $5 billion revenue projection appeared assured.

One month into the 2021-22 schedule, however, attendance is down around the league compared to where it was before the pandemic.

On Oct. 25, Sean Shapiro reported average attendance prior to the COVID shutdown in 2019-20 was 17,423. Through the first 75 games of this season, it had dropped to 16, 256. He also indicated several teams, including the Chicago Blackhawks, Nashville Predators and Pittsburgh Penguins, saw years of sellout streaks come to an end.

As of Nov. 13, ESPN.com reported only five teams (Tampa Bay, Washington, Vegas, Boston and Seattle) were playing to capacity. Attendance in the Canadiens market was down, with Toronto at 99.3 percent capacity, Vancouver 97.9, Montreal 92.0, Winnipeg 91.9, Edmonton 84.2, Calgary 78.1 and Ottawa at 57.8. Other notable NHL clubs also down included Colorado (97.5) St. Louis (95.3), Minnesota (92.5) Philadephia (88.2) and the New York Rangers at 83.5.

Several factors besides the pandemic are partially to blame in some cases. The Chicago Blackhawks, for example, are struggling on the ice while the franchise has been rocked by a sexual assault scandal from 2010. Some, like the Ottawa Senators, can tie their drop in attendance to their efforts in rebuilding their rosters.

The pandemic, meanwhile, still hovers over all aspects of life. Some fans still might not feel safe enough to return to games despite the health and safety measures while others could be put off by those rules.

A worrisome factor could be the cost of attending NHL games becoming too expensive for fans feeling the economic effects of the pandemic. Inflation could push the already expensive cost of attending an NHL game out of reach for the average fan. Some season-ticket or long-term ticket package holders could instead choose from more affordable single game or shorter-term options.

That doesn’t mean the NHL still won’t see a significant increase in hockey-related revenue (HRR) compared to last season. It could reach the $5 billion mark as projected by Bettman.

However, the NHL exceeded $5 billion in 2019-20 under the previous broadcasting deals and revenue streams, and without its new franchise in Seattle. Reaching roughly the same number this season won’t be the kind of improvement the league would prefer under normal circumstances.

Big-market clubs should be able to ride things out until HRR improves. Smaller markets, however, will fill the pinch.

That would also affect the players’ share of HRR and the salary cap. The owners and players share HRR evenly at 50-50, but the cap for each season is based on projections from the previous year with escrow payments from the players to the owners built into each season’s salaries. If the owners’ share of HRR exceeds the players’ share, the players get their escrow payments refunded with interest. Otherwise, the owners retain those escrow payments.

Under the 2020 CBA extension, escrow payments were capped at 10 percent for 2022-23 and six percent for each of the remaining three years of the extension. That was based on the expectation that attendance would return to normal by that point, with the players having already made expensive escrow payments last season and this season to help the owners offset their losses.

The Athletic’s Sean Shapiro pointed out the players still owe the owners nearly $1 billion. The next round of CBA talks could become contentious if revenue hasn’t significantly risen by 2025-26 to enable the players to pay off that debt.

Of course, it’s still early in this season. Attendance could rebound if the North American economy improves as the pandemic subsides and life regains a semblance of normal.

But what happens if that’s not the case? What if those attendance figures are sluggish to return to what they once were? What if there’s yet another wave of COVID-19 that leads to rescheduled games or another shortened schedule? What happens to the players’ debt to the owners?

The fallout from the effects of the pandemic upon NHL revenue could linger for years. That could raise the specter of yet another work stoppage when the collective bargaining agreement expires in 2026.







3 Comments

  1. Wait until half the players are out of commision due to the leagues covid protocols. They’re all vaxxed, which apparently does little to prevent them from contracting or spreading the disease, and the fully vaxed fans might well conclude attendance will endanger them as well.

  2. If the NHL actually cared about attendance then Arizona would not still have a team.

  3. I used to be a Red Wing season ticket holder for over a decade, even though I am a Canuck fan because I live in the area,

    With the prices they way they are now, if I want to go to a game I instead just buy a new big screen TV from Costco and case of beer and when the game is over I have spent the same amount of money but am happy about having done it this way.