Slap Shots has learned the NHL recently informed the NHLPA the projected hockey-related revenue (HRR) for this truncated season will reach $2.4 billion, a staggering number with implications far beyond the obvious that the league essentially suffered no damage by locking out the players for more than three months.
Remember: HRR for 2011-12 hit a record $3.3 billion. That was for a 1,230-game regular-season, plus playoffs, preseason and special events — including the Winter Classic and All-Star festivities.
This $2.4 billion projection is for a 720-game regular season plus the playoffs. Thus, the NHL expects to generate 72.7 percent of last year’s revenue in 58.5 percent of the season — and without the benefits reaped from the money-printing outdoor game.
It would be a mistake to extrapolate the $2.4 billion into its algebraic equivalent of $4.1 billion for a full and hypothetical 2012-13. That would equate to a 35-percent increase for a league that historically has annual bounces of approximately 7 percent per season, despite all the auxiliary nonsense from the Board of Governors that surrounds — but never is able to engulf — the great game.
It appears clear, however, the projected $2.4 billion represents a case of less being — or meaning — more to the consumers. It seems obvious, as long suspected, the NHL generates a comparatively small amount of revenue over the course of the first six weeks of the season, when it’s difficult to attract attention and sales in October.
Attendance and percentage of capacity are up dramatically, essentially across the board. Television ratings, both locally and nationally, are healthier than ever on almost a case-by-case basis. Fewer games have created more importance, and thus more focused attention, on each one.
The lesson here for the NHL (and NHLPA) is reducing the schedule to 70 games in a season that begins in the final week of October — it would be important to get a jump on the NBA — very well could and almost certainly would not only produce better hockey but generate more interest and thus more revenue.
Reducing the season subscribers’ burden from 41 to 35 games (plus those dreaded exhibition games that honestly should be either gratis or simply priced to cover the cost of the event), likely would ease the effect of increasing the average ticket price.
Cutting the number of games reduces the glut during the dog days of January and February that inevitably inconvenience season subscribers and bore the more casual fan faced with endless matches per week. The more games on the schedule, the less urgency is attached to any one—especially with the availability of the odious loser’s point to mitigate the result of hyped showdown matches.
There is, as an aside, something awry with the system when the first question about a game down the stretch isn’t “Who won?” but rather, “Was it in regulation?”
The NHL and NHLPA are putting the final touches on a realignment plan that temporarily will rearrange the furniture until the process has to redone when the league either undertakes expansion or relocation. Realignment will provide more convenience for a few teams — notably Columbus, Detroit, Winnipeg and Dallas — but it also will establish a more inequitable playoff system under which drama and interest will fade rather than climax as the tournament evolves (More on that in future weeks).
But rather than realignment, the league and the union should be devoting their energies to a radical reduction of the schedule and resetting of the season. It always is about supply and demand, as Dennis Wideman and Ryan O’Reilly were overheard to say after conducting business with Flames general manager Jay Feaster.
Reducing the supply of (endless) games would increase the demand. Eliminating October is good business for the NHL, which is on target to generate nearly three-quarters of a full season’s record revenue with less than 60 percent of available inventory.
Those are the lessons of the projected $2.4 billlion. The NHL and NHLPA should learn from them. And act upon them. Seventy games. Less is more.
This is, after all, Feaster and the Flames we’re talking about here, a crew that decided O’Reilly would have been worth paying just under $10 million for his first 110 games or so in a Calgary uniform.
So it isn’t a stretch to believe the organization goofed monumentally in either misinterpreting or overlooking Article 13.23 of the collective bargaining agreement that pertains to waivers for players who have played in Europe after the beginning of the NHL season, as O’Reilly did as a restricted free agent with the Avalanche.
But it is more of a stretch to believe the NHLPA would have agreed to a CBA clause that would discriminate against a single class of players — those signing an offer sheet — regarding eligibility for play in the league this year.
And it is no stretch at all that the NHL would interpret the CBA in a manner prejudicial to the interests of teams signing players to offer sheets, an entirely legal practice frowned upon the NHL, as Neil Smith, blacklisted for years because of signing Joe Sakic to that offer sheet in 1997, might attest.
Finally, we see that our old chum Brian Burke attended the MIT Sloan Sports Analytics Conference on Friday.
“I have told our organization that the application of analytics is critical to succeeding in the future,” said Maple Leafs senior adviser Burke.
“I have told our organization that analytics are worthless,” said Ducks scout Burke.
The NHL, which has ruled it permissible for Burke to work for two organizations at once, agreed.