Tuesday, April 7, 2009

Latest League Revenue Prediction

Is Mr. Bettman being overly-optimistic?

As I reported earlier, Gary Bettman was in Vegas promoting the NHL Awards when a gem of a business comment caught my eye in the Yahoo article that described the press conference:
"Bettman said the NHL is in sound financial shape, and he expects to see league revenues to increase 5 percent this season. He said that playoff ticket sales and season ticket sales for next season were fine, based only on anecdotal evidence."
Awfully optimistic. But Bettman always is; he never would admit that the NHL is in big trouble, because that is just being a poor salesman. What shocks me more about the comment is the actual figure of 5%. The time line for revenue projections were as followed:
  1. Pre-Season: 1, 1.5, or 2% increase in revenues.
  2. All-Star Break: 1% increase or flat revenue.
  3. Monday, April 6: 5% increase in revenues.
Quite a jump, no? 5% doesn't seem like a huge number, but when we're dealing with billions, especially in a "niche" sport, it can make all the difference. Take a look at the chart (click to enlarge):

Essentially, with a 5% increase in revenues, around $130 Million more dollars get brought into the league and its clubs. I think that may just be enough to cover the Escrow worries as of late; which would mean players would get most of their money back (or definitely more than is planned right now).

Along with this, what would this do to the salary cap? Many are planning either a small drop or staying at the same $56.7 Million figure the league is at now. It would definitely stay flat if the 5% increase stays true, but I still don't think we will see much if an increase next season because of worries of inflation and bloated contracts in general.

So yes, it was a small comment in a small article. But it could make all the difference when it comes down to the NHL's bottom line come the end of the 2008-2009 fiscal year.

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