what does the NHL do with the money?

[adalbort 1]

I have read in Wikipedia that the NHL is a non-profit organisation, unicorporated.

This essentially means they have no investors, hence no dividends or profits to be shared (ie: as opposed to ordinary chartered companies).

But my question is, they make MILLIONS every year, what is the long-term goal for this money?

If there are no investors to be benefited, wouldnt it make sense to lower prices of merchandise and/or subsidise part of the teams to lower ticket prices?

[shotty 7]

NPOs can earn surplus money, it just isn't re-distributed, it's retained.

i'm sure wiki has info on NPOs in north america, check it out and it should answer your questions.

[shooter27 116]

I think you're confusing the money that the teams make with the money that the league makes. Most of the revenue that goes directly to the NHL - national TV rights fees, merchandising, etc. - gets paid out to the clubs as part of revenue sharing. My guess is if you looked at the league as an entity that governs the teams - not the individual teams - the differences between the revenue they take in, the money they pass on to teams, and the costs associated with running the league there probably isn't that much surplus left for the league. Clearly some of the teams make money, but that doesn't mean the NHL as a business entity is making money.

[adalbort 1]

I think you're confusing the money that the teams make with the money that the league makes. Most of the revenue that goes directly to the NHL - national TV rights fees, merchandising, etc. - gets paid out to the clubs as part of revenue sharing. My guess is if you looked at the league as an entity that governs the teams - not the individual teams - the differences between the revenue they take in, the money they pass on to teams, and the costs associated with running the league there probably isn't that much surplus left for the league. Clearly some of the teams make money, but that doesn't mean the NHL as a business entity is making money.

I refer to the money the NHL makes. What the teams make is a different matter, at least as far those are concerned, since they are run like private companies.

As I understand from "Under Bettman, the NHL has seen rapid growth of league revenues, from $400 million when he was hired to over $2.2 billion in 2006–07.[1][2]" from the Wikipedia article on Gary Bettman (NHLs commissioner), it is the NHL (not the teams, those quantities are likely not to be disclosed, so long as they remain PLCs, LTDs in the US) that makes 2.2 billion dollars. Whether that is gross income or benefit I do not know, but my guess was gross.

Shotty was mentioning that NPOs can have surpluses, but the motivation behind NPOs should very clearly stated in their foundation, and that is what I was trying to learn from posting this question up for debate. Why would the NHL keep enormous quantities of money, and to spend it on what? I am aware when the Coyotes went bankrupt the NHL bought the team, prior to having it for sale again (that being soon, I think).

[shooter27 116]

I refer to the money the NHL makes. What the teams make is a different matter, at least as far those are concerned, since they are run like private companies.

As I understand from "Under Bettman, the NHL has seen rapid growth of league revenues, from $400 million when he was hired to over $2.2 billion in 2006–07.[1][2]" from the Wikipedia article on Gary Bettman (NHLs commissioner), it is the NHL (not the teams, those quantities are likely not to be disclosed, so long as they remain PLCs, LTDs in the US) that makes 2.2 billion dollars. Whether that is gross income or benefit I do not know, but my guess was gross.

Shotty was mentioning that NPOs can have surpluses, but the motivation behind NPOs should very clearly stated in their foundation, and that is what I was trying to learn from posting this question up for debate. Why would the NHL keep enormous quantities of money, and to spend it on what? I am aware when the Coyotes went bankrupt the NHL bought the team, prior to having it for sale again (that being soon, I think).

I'm pretty certain that what they're referring to as "league revenue" in that quote is the combined revenue from all of the teams and the league itself. I know whenever they refer to numbers like league revenue in other sports its is always in reference to the combined revenue earned by all of the teams and the league so I would believe this number is the same thing. It may not count every penny of revenue each team earns, but its close. Just think about the magnitude of the number - if you're not counting in ticket sales, arena merchandise, etc., etc. where is the NHL going to come up with $2.2 billion in revenue? The NHL as an entity to itself only has so many revenue sources and I highly doubt they add up to anywhere near that amount.

Take ticket sales for a second - Lets assume the average ticket for an NHL game generates $50 in revenue and on average there are 20,000 seats in each arena. That means if you sell out a game it generates $1 million in revenue, now you've got 42 home games, so thats $42 million in ticket revenue for a team, multiply that by 30 teams and you've got $1.25 billion in revenue from ticket sales for the entire league. Once you add in playoffs, lets say that gets up to $1.4 billion. That means just to get to $2.2 billion you've still got to generate another $800 million in revenue and that assumes you sell out every single game. Also, the last time I checked the NHL doesn't have a huge national TV contract and they don't sell nearly as much merchandise as the NFL. So if you don't count that ticket revenue towards that $2.2 billion number I don't think its possible for the NHL as an entity unto itself to generate $2.2 billion in revenue.

My point remains that I don't think the NHL has these huge piles of money lying around while its teams (Phoenix) go bankrupt. Don't forget, at the end of the day the NHL as an entity is still controlled by the owners of the teams (who are Bettman's bosses) if the league really was making that kind of money don't you think that the owners would want their cut?

[adalbort 1]

I'm pretty certain that what they're referring to as "league revenue" in that quote is the combined revenue from all of the teams and the league itself. I know whenever they refer to numbers like league revenue in other sports its is always in reference to the combined revenue earned by all of the teams and the league so I would believe this number is the same thing. It may not count every penny of revenue each team earns, but its close. Just think about the magnitude of the number - if you're not counting in ticket sales, arena merchandise, etc., etc. where is the NHL going to come up with $2.2 billion in revenue? The NHL as an entity to itself only has so many revenue sources and I highly doubt they add up to anywhere near that amount.

Take ticket sales for a second - Lets assume the average ticket for an NHL game generates $50 in revenue and on average there are 20,000 seats in each arena. That means if you sell out a game it generates $1 million in revenue, now you've got 42 home games, so thats $42 million in ticket revenue for a team, multiply that by 30 teams and you've got $1.25 billion in revenue from ticket sales for the entire league. Once you add in playoffs, lets say that gets up to $1.4 billion. That means just to get to $2.2 billion you've still got to generate another $800 million in revenue and that assumes you sell out every single game. Also, the last time I checked the NHL doesn't have a huge national TV contract and they don't sell nearly as much merchandise as the NFL. So if you don't count that ticket revenue towards that $2.2 billion number I don't think its possible for the NHL as an entity unto itself to generate $2.2 billion in revenue.

My point remains that I don't think the NHL has these huge piles of money lying around while its teams (Phoenix) go bankrupt. Don't forget, at the end of the day the NHL as an entity is still controlled by the owners of the teams (who are Bettman's bosses) if the league really was making that kind of money don't you think that the owners would want their cut?

Yeah I think you are right. It makes sense at least.

Thanks guys!

[Hermans 9]

Yeah I think you are right. It makes sense at least.

Thanks guys!

The average revenue, per team w/b about $69MM. That's about $112 per person per game at 15,000 fans per game ($168 for 10,000 fans per game). If you factor in playoff games it doesn't move the meter much.

I think revenues might include parking and concessions. Do remember that most, if not all teams, will have deals for local TV markets, adding some revenue.

You are also leaving out corporate seats which are typically much more expensive (higher revenues) than regular seats and in-rink advertising.

If you got 1/2 of your revenues from the gate receipts you would still have merchandising, local TV contracts and radio contracts, corporate seats, advertising revenues and of course the national TV contracts and the teams shares of concession and parking revenues. I don't think that it would be a stretch to see all 1.1 billion generated from those sources.