How does revenue sharing work in the nhl

There was no World Series in and there was no World Series champion. When the two sides finally came together in , revenue sharing became a key component of the agreement. Revenue sharing is already used in hockey source: thehockeywriters. If there were a majority of profitable teams in the league—say 20—and 10 needed assistance; revenue sharing would be a viable option. But if 10 teams are making money and 20 are not, effective revenue sharing would involve taking the majority of the profit away from the money-making teams and distributing to those losing money.

It's not viable. In fact, unlike other major pro sports leagues, NHL teams still make most of their money on ticket sales. Teams in Canada routinely sell out and those teams can charge high prices for tickets, because Canadians love their hockey. These revenues are kept by the teams.

Merchandise and Concession Sales: Merchandise sales do not directly go to the teams. However, they do make a lot of money on licensing fees. So whenever someone buys a t-shirt or hat with the team logo on it, the NHL teams got paid by letting the manufacturer use that logo. Of course, the more they sell the more companies want to produce their merchandise, which in turn means they can negotiate higher licensing fees in the future.

Now, the teams also will make money of each item sold on their team websites or at the team stores as well. NHL 2K and other games yield not only up-front licensing income, but also royalties that are payable for things like live content. With the growth of live gaming and ESports this can only be a growing revenue stream in the future.

One area which has not been explored much seems to be casino gaming. Whilst other sports like soccer has seen elaborate licensing deals with slot machine manufacturers, the NHL has for now stayed away from this.

How, then, could this be the case? The answer is by looking at Article 49 as it currently stands. The funds that are redistributed amongst clubs under Article 49 are not restricted to those revenues generated by individual teams, despite the fact that many articles and columns on the subject seem to assume or suggest otherwise.

Article 49 is a monstrously long and confusing portion of the CBA, and the lockout partially owes its existence to its formulation. The total amount to be redistributed to those clubs who require them under this unique system is drawn from four separate sources.

Each source forms a "funding phase. And what is the very first source of funding? The other three sources of funding come from the players' Escrow Account , playoff ticket sales based off of regular season ticket values , and only then does funding come from the top ten teams based on their revenues less arena costs. It further decouples the escrow percentages from reality, and embarks upon a series of seasons where the base assumptions that govern how much will be sitting in the escrow pool are based on a fantasy.

There is a mechanism to have the salary cap rise if real revenues bounce back quickly, all while escrow will decline every year. If things get a lot better, they can agree to step the cap up in the year before they start using the new formula to calculate it. They can also discuss lowering it if HRR drops. This CBA is a very optimistic bet by the players with a lot of hedging built in to protect the owners if that optimism is misplaced.

They could have dealt with this possibly temporary period where the only thing growing is debt by allowing that split to slide in favour of the players. This formula might keep those overly optimistic projections of the last eight years from happening again.

That might only buy you three forwards on the Leafs, but it will buy you a lot more than three janitors, scouts, or even coaches for an NHL team. The optimistic take on this is that as soon as fans can be back in the stands in all arenas, and all the revenue streams start up again, the NBC deal will double, another expansion franchise can be sought, and everything is golden again.

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NHL accounting in a pandemic season: divvying up debt instead of dollars New, comments. Reddit Pocket Flipboard Email. This is a brand new world where debt is growing, not revenue.