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Shoalts: NHL’s deal with Rogers, ‘Stadium Series’ success = an ‘extra’ $150 million in revenue

According to the Globe and Mail's David Shoalts, Rogers Communications is worrying that it overpaid for its Canadian TV-and-internet rights package, but the NHL discovered that the first payment from Rogers and strong performances by the outdoor games held this past season yielded an extra $150 million in revenue for the league:

Thanks to another run of prosperity after the NHL settled its labour problems 18 months ago, [NHL commissioner Gary] Bettman was able to tell the owners there will be a little extra in their piggy banks for the coming season. Each of the 30 teams will get an unexpected $5-million (all currency U.S.) thanks to the success of the league’s Stadium Series and the first payment by Rogers Communications Inc., on its $5.2-billion, 12-year broadcast deal. That is a total of $150-million in cheques mailed out this summer.

The Stadium Series was the four outdoor games played last season in addition to the existing Winter Classic and Heritage Classic. They were added for a revenue boost following the 2012-13 lockout and paid off nicely for the NHL despite fears the league was flirting with killing the golden goose.

Shoalts continues and explains how these revenues will effect the NHLPA going forward (as you already know, the NHLPA chose to accept a $69 million salary cap instead of pushing for a $70-71 million cap to minimize escrow withholdings after surrendering significant portions of their paychecks to the league during the 2013 and 13-14 seasons):

The collective agreement calls for the owners and players to split all hockey-related revenue (HRR) 50-50 so every penny has to be counted. Long gone are the days the league office could quietly slip some money under the table to an owner with a case of the shorts. This money will probably be considered an advance on the shared league revenue for the coming season. The NHL likes to stay on the conservative side when it is estimating league revenue (which was about $3.6-billion in 2013-14), so the $5-million represents a change in projection of the 2014-15 HRR.

By the time the bean counters from both the NHL and the NHL Players’ Association gather in the summer of 2015 to determine the final HRR count for the 2014-15 season, that $150-million paid out this summer will be accounted for. And it should also play into a nice jump in the salary cap from $69-million to something around $75-million for 2015-16.

Shoalts continues and leans pretty hard upon the, "The Coyotes really, really need the money" line given that the team just announced its naming rights have been purchased by the Gila River Casinos.

Regarding that situation in particular, the Canadian Press's Stephen Whyno clarified the situation:

The Arizona Coyotes hope a new sponsorship agreement with Gila River Casinos will bring in more money for the team and the city of Glendale. On Wednesday the team announced a nine-year agreement to rename their rink Gila (pronounce hee-lah) River Arena. It was the latest in a line of long-term corporate contracts the Coyotes have entered into to entrench themselves in Arizona.

“This is all about the economic viability of this club,” co-owner, president and CEO Anthony LeBlanc told a conference call. “This is the most significant deal that we have in our corporate sponsors.”

As long as this deal is approved Sept. 9 by the Glendale City Council, the building formerly known as Jobing.com Arena will have its new name the next day. LeBlanc, part of the team’s Canadian-led ownership group, said the city will receive US$600,000 from the agreement and that he didn’t expect approval to be a problem.

LeBlanc didn’t reveal how much the Coyotes will get from the new agreement. The previous deal with Jobing.com that the team terminated was reportedly worth $30 million over 10 years.

And yes, the Coyotes and the NHL have apparently weighed the pulses and minuses of the whole, "Sports gambling is illegal outside of Native American reservations, casinos and Vegas" situation:

“Obviously we went through our due diligence in the process, and we worked very closely with the National Hockey League … to ensure that it falls within the requirements, and obviously it did,” LeBlanc said. “This wouldn’t have been announced without the league blessing it.”

Filed in: | KK Hockey | Permalink
  Tags: gary+bettman, phoenix+coyotes, rogers, stadium+series

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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