At one point in Gary Bettman’s pre-season address to the media Monday afternoon, it became very clear that the NHL commissioner was intent on making a point. Boy, did he ever. He was asked about the logistics and back room efforts that go into putting on the season and whether there is more weight put on economics or getting the season finished.
And part of Bettman’s response went like this: “When you ask about the economics, let me make something really clear. We’re coming back to play this season because we think it’s important for the game, because our fans and our players want us to. And it may give those who are in isolation or where there are curfews a sense of normalcy and something to do. It would be cheaper for us to shut the doors and not play. We’re going to run through more money, or to say it differently lose more money, at the club level and league level by playing than by not playing. Our owners unanimously are OK with that.”
On the surface, golly gee, that would just about make Bettman and the owners serious candidates for the Nobel Peace Prize, wouldn’t it? But when you drill down a little, well, you probably don’t need a sizeable chunk of salt to go with that, but it would be a good idea to have a box of Sifto on hand.
Yes, the NHL is going to lose money this season by playing. There is no disputing that. And yes, it would have saved them money if they had shuttered this season, particularly if they would have been able to invoke portions of the collective bargaining agreement that would have saved them from paying the players the approximately $2.5 billion in salaries this season. And that was an idea the league did pursue, until it realized that there was almost no way it was going to be able to do that, particularly with all the other sports having played and their completed their seasons during the pandemic.
To shut down while all the other leagues played would have put the NHL seriously behind them in terms of exposure and fan engagement. It also would have extended for another year its national television contract with NBC, thereby depriving it of putting its property up for auction after this season. And that is a deal that is going to be so mammoth that it will help make up for a lot of those lost revenues.
And here’s the biggest one and the one Bettman did not mention. Because of escrow, the league is going to be made whole. So the real question is not how much revenue the league will lost this year, but how much will the players be paying back in future years in the form of escrow payments.
According to a source, that number stands at $250 million from the bubble playoffs the league held last season. And while it’s impossible to peg exactly how much the league is going to lose this season, it’s expected the players will have to pay back anywhere between $450 million and $650 million to make the owners whole. To be sure, the league is going to take a hit this season, but half of those losses will be buttressed by the players continuing to pay back the league, probably over the next decade. So if you’re a future NHL start such as Owen Power or Shane Wright or Connor Bedard, there’s a good chance you’re going to be paying back money to cover losses during a pandemic that hit when you weren’t even part of the league.
When pressed on the financial hit the NHL will take, Bettman said, “The magnitude of the loss starts with a ‘B’. We’re out of the ‘M’ range and into the ‘B’.”
Bettman also touched on a host of other subjects during the conference that were revealing.
* Until this season, he had been adamant that there would be no advertising on NHL sweaters. But after the success of the helmet decal deals – and he correctly stressed that they actually won’t create revenues but instead will serve as make-goods to sponsors that they would otherwise have to return – it’s clear that conversation is at least going to happen now. Bettman had always shut the door on it in the past, but said, “I don’t think that anybody should jump to conclusions that because we did this, we’re now down a path to do a bunch of other things. The jury is still out on jersey signage and if we are going to do that, that was something that was important enough in a whole host of ways, that I didn’t want to do it under these circumstances and ask the clubs to do it under these circumstances. Nobody should jump to any conclusions about what it all means in terms of what’s next.”
* The league also reported that there will be limited numbers of fans allowed to start the season for games involving the Dallas Stars, Arizona Coyotes, Florida Panthers and Tampa Bay Lightning. The Lightning announced they will not have fans at games at Amalie Arena for now and the Panthers and Stars will allow about 5,000 fans per game. The Coyotes will allow 3,450.
* Bettman officially announced two outdoor games at Lake Tahoe with no fans. Vegas and Colorado will play Feb. 20 and Boston will face Philadelphia the next day.