With the NHL coming off its 10th season in a row, its potential to be a multi-billion dollar league for the Canadian market has increased in recent months.
In addition to the league’s growing international presence, which will increase revenue for the NHLPA, the league is also seeking new revenue streams to fund its infrastructure, expansion, and player development, according to sources.
With the NHL not yet being fully sold to the public, it is also uncertain how the NHL will be able to generate revenues beyond television rights.
“There’s going to be new revenue opportunities to be found in the next few years,” said Chris Johnston, senior vice-president and chief operating officer of the NHL.
“And it will be at the margins of the markets that are paying the most for sports and television rights, not just in Canada but across the world.”
The league has a $4.3 billion cap for 2020-21 and could make a $3.5-billion (U.S.) commitment to the new Canadian TV rights agreement, according the NHL’s 2016-17 financial statement.
While the NHL was able to sign an international TV deal with Rogers in 2017, it did not become a profitable broadcaster for the league in the short term.
It is expected that the NHL has no further financial commitments for its existing rights deals, which have a combined value of $5.1 billion.
The NHL has not signed a television deal with a Canadian television network since its debut in 1996.
Its future could depend on the NHL getting the Canadian TV deals it needs to remain a profitable company.
On the heels of the announcement that Rogers will televise the 2018 Winter Classic, Johnston said the league “is going to need to find a way to get into those markets and have a long-term future in those markets.”
“It’s something we’re looking at,” Johnston said.
“It’s a long shot, but it’s a realistic goal.”
(AP Photo/David J. Phillip)In a conference call with analysts earlier this week, Johnston reiterated that the league does not intend to move forward with any expansion or relocation talks for 2019-20.
Instead, the NHL is looking to get an “all-in” deal done in 2018.
As a result, the potential to become a multibillion-dollar league for Canadian markets, Johnston added, is increasing.
(Getty Images) “The way we look at it is that we want to build a long and successful partnership with the NHL,” Johnston told analysts, according a transcript provided by the Globe and Mail.
After being sold to Rogers in March, the NFL is expected to sign a television rights agreement with Fox in 2018, which would give the league an $8.3-billion TV deal, according Forbes.
Rogers and the NFL could negotiate a long term television deal and the NHL would receive $3-million (U) annually in television revenue from the deal.
But, Johnston explained, the current TV deal will not be extended beyond 2019-2020, which means that the current deal for 2019 will expire.
Johnston also said that the NFL and Rogers will discuss the possibility of a deal during the 2018 season, and the league will decide whether to make any further offers in 2019.
“The one thing we’re going to do is look at the long-run future of the NFL,” Johnston added.
When asked if the league would move forward on a potential deal with another broadcaster, Johnston declined to answer.
If the NHL does not move forward in 2018 on a long deal, the next step would be to get the Canadian rights deal approved by the Canadian Competition Bureau.
This would require approval by the Competition Bureau for the next TV rights deal, which the NHL should have done by then, Johnston noted.
And Johnston also declined to address the possibility that the Canadian league could renegotiate the TV deal that it signed with Rogers to be the Canadian version of the Canadian deal with the NFL.
At the end of the day, Johnston insisted that the team’s decision to sell the team and to sell television rights to a Canadian broadcaster was not a result of any internal pressures.
He said that a team would never do this, and that the decision to go public was a business decision.
“I think it was a smart move for the team to do this,” Johnston noted, adding that he believes the NHL can become a much more profitable entity.
“The team has had a lot of success financially in Canada, and it was smart to do that, and to do it in the right way.”
“I can’t predict how the next 10 years are going to look like, but I can tell you that this team has a very bright future,” Johnston continued.
“I think that it’s going a long way in terms of making the business model