The 2009-10 campaign was a season of record growth for the NHL as advertising revenues, television ratings, and merchandise sales hit all-time highs. The league’s success was impressive in the midst of a worldwide recession, but also a bit misleading. With most corporate sponsorship deals already in place and season tickets purchased well ahead of time, the economic aftershocks weren’t expected until the beginning of this season.
If signs from the first half of the 2010-11 season are any indication, the league is not only stemming the tide but finding a way to maintain business growth and momentum.
On the heels of the 2011 Winter Classic, the most-viewed regular season game in 36 years, the NHL is expecting total revenue growth of four to five-percent this season in line with a December Forbes estimate of $2.9 billion. This would be the fifth straight year of revenue growth after a salary cap was instituted following the 2004-05 lockout.
Prior to the new collective bargaining agreement Forbes estimated that the NHL lost a combined $96 million on revenue of $2.2 billion in 2003-04; and lost $123 million on $2.1 billion revenue in 2002-03.
“The League is extremely well positioned,” NHL Commissioner Gary Bettmansaid in a press release on Tuesday. “The vital signs are good and we anticipate continued growth and momentum. The strong numbers are a testament to a great product on the ice, a growing fan base that loves our game, and a strategy that provided a path for corporate America to reach that fan base.”
The successful turnaround of franchises in Washington, Los Angeles, Tampa Bay, and St. Louis have played a large role in the continued success of the NHL as it enters the initial stages of constructing a new CBA to replace the one that expires in a year and a half. Local viewership on the regional sports networks in those four cities increased by over 30% and the mega-market in Los Angeles experienced 67% growth.
Viewership numbers for the national networks in the US and Canada also maintained growth across the board in the range of five to seven-percent and that should work in the league’s favor as it begins to take offers for new television deals in the US this summer. The structure of the current deal, originally signed in 2004, allows NBC to air NHL games without paying a fee for broadcasting rights and requires only a share of advertising revenue.
Bettman handpicked a superstar-filled matchup between the Pittsburgh Penguins and Washington Capitals in this year’s Winter Classic with an eye towards bolstering the league’s leverage at the bargaining table in the offseason. A merger between NBC Universal and Comcast (which owns the NHL’s US cable rightsholder VERSUS) was approved last week and hanging onto the hockey league at all costs should be a priority for the new NBC sports entity. The combined platform of NBC, VERSUS, and the regionally-branded Comcast SportsNet will create serious competition for any package ESPN and it’s family of networks brings to the table.
VERSUS is planning to ramp up their coverage of the revamped NHL All-Star game this weekend in Raleigh, NC and the only risk that remains for Bettman is an unpredictable Stanley Cup Final at the end of this season. Last year’s battle between Philadelphia Flyers and Chicago Blackhawks was broadcast on NBC and the matchup between two US big-market teams predictably resulted in the best network viewership in 13 years. A Stanley Cup Final featuring a team like Nashville or Phoenix (both currently in the playoff picture) could reveal a prevailing weakness in some of the league’s smaller markets.
*This article also appeared on Forbes SportsMoney*