NHL News: Stadium Series Yields Multi-Million Dollar Payout
As shown in this Chicago Blackhawks celebratory photo, the stadium series are wildly popular- and lucrative, it seems. Mandatory Credit: Rob Grabowski-USA TODAY Sports
Yesterday, imagine my delight when I checked the Hockey Rumors and Trades Facebook page, and saw the league logo made out of money. The post announced that, due to the success of the Stadium Series this past winter- and the first payment made by Rogers Communications towards it’s 12-year Canadian broadcasting deal- the league was going to be sending out an extra $150 million-ish in bonuses to the league’s 30 teams.
Wanna know how much that is per team? Reportedly around $5.2 million. Per. Team.
The Coyotes have to be rejoicing about this. According to the post, the team lost about $30 million last season (this number was disputed in the Glendale Star, who suggest that a rejected budget produced for the team by ICE Arizona announced closer to $5.7 million in losses when not accounting for capital support from revenue sharing and lease payouts), and has already signed on to receive $3.5 million per year based on the new arena naming rights agreement the team made with Gila River Casinos. Between the deal, the bonus check, and anticipated growth within the league- according to reports on the team’s official website, hockey has grown 17 percent in Arizona in the past calendar year- the team will be that much closer to getting its head above water. For those who are unsure, this means the team will be that much closer to finally finding the long-evasive security in the desert.
What are the biggest effects this bonus could have on the team- and the league?
Apr 12, 2014; Glendale, AZ, USA; Phoenix Coyotes center Mike Ribeiro (63) celebrates with defenseman Connor Murphy (5), defenseman Oliver Ekman-Larsson (23) and left wing Martin Erat (10) after scoring a goal in the second period against the San Jose Sharks at Jobing.com Arena. Mandatory Credit: Matt Kartozian-USA TODAY Sports
1. The team could see bigger signings.
One possible effect of the huge, across-the-board league payout is an increase in the salary cap for the upcoming year. The salary cap is based on the upcoming year’s anticipated HRR, or hockey-related revenue, which is based off of profits from ticket sales, novelty fan gear, concessions, and parking.
It’s most likely that the payout will be put into the upcoming year’s HRR. The league is usually pretty conservative in its estimate for projected HRR’s, but with an extra $5 million guaranteed for every team, it’s probable that the salary cap could jump up to as high as $75 million.
“The league is usually pretty conservative in its estimate for projected HRR’s, but with an extra $5 million guaranteed for every team, it’s probable that the salary cap could jump up to as high as $75 million.”
What does this mean for the Coyotes? They’re a team that commonly doles out contracts on the conservative side- the team’s highest-paid players, Shane Doan and Oliver Ekman-Larsson, are paid $5.3 million and $5.5 million, respectively.
A salary cap that increases by up to six million dollars means more than just a higher ceiling for contracts- it means a higher floor, as well. Pushing the salary cap up as high as the Rogers bonus could would force the team’s hand. With a significantly higher salary cap floor, the team would need to make some bigger signings in order to stay above the lower limit. This means bigger contracts for undervalued players, but it also means a higher potential for bigger-name signings. The team may not end up with a P.K. Subban, but they’d most likely need to sign at least one six-or-seven million dollar roster player. The league is saturated with talent right now- and the Coyotes could only benefit from this.
Oct 3, 2013; Glendale, AZ, USA; (left to right) Phoenix Coyotes alternate governor Anthony LeBlanc NHL commisioner Gary Bettman and governor George Gosbee during a press conference prior to the game against the New York Rangers at Jobing.com Arena. Mandatory Credit: Matt Kartozian-USA TODAY Sports
2. The team could see stronger support in Arizona
The state of Arizona is currently heavily divided on the issue of the Coyotes’ tenure in the desert. Those who want the team to remain in the Southwest want it dearly- but those who don’t are just as adamant about their feelings. This is bad news for the team, since some of those anti-hockey advocates hold public office.
One such anti-Coyotes public figure is the Mayor of Glendale, Jerry Weiers. Although he had not taken office by the time Glendale’s city council voted on the team’s Glendale Arena (excuse me, Gila River Arena) lease agreement with the city, he made it publicly known that he wasn’t a supporter of the team. He even went as far as to dig up old dirt from before the lease was even voted on, in an attempt to render the team homeless.
One reason certain Arizona residents have such strong sentiments against the Coyotes is the team’s lack of revenue. It’s widely known that the team doesn’t turn a profit- last year, they were one of two NHL franchises (the other being the Florida Panthers) who suffered severe losses during the season. The team’s attendance rates were among the lowest in the league- and due to the unanticipated presence of free parking lots near the team’s arena, the team made much less off of parking profits than anticipated. The team is already paid by the city of Glendale in the lease agreement, rather than the other way around. Adding a parking revenue of only $4.5 million of the $6.7 million anticipated to be paid back to the city, this made citizens who had no interest in the sport extremely unhappy.
The addition of a bonus $5 million in HRR means that the team is in less debt than before, though. Those in support of the team remaining in Arizona could use this past Stadium series to suggest that the team will continue to shrink the team’s margin of loss over the coming years.
3. The team has a valid reason to push even harder for the Stadium Series to Come to Arizona
Feb 14, 2014; Krasnaya Polyana, RUSSIA; Poland team piloted by Dawid Kupczyk during two-man bobsleigh training in the Sochi 2014 Olympic Winter Games at Sanki Sliding Center. Mandatory Credit: John David Mercer-USA TODAY Sports
One of the team’s most devastating losses over the years was the team’s loss of the NHL All-Star Game in 2006 due to the Olympics. The team’s expectation that they would be able to host the event was almost a necessity at that point; during the 2005-2006 season, it was estimated that the team had lost around $40 million. Bringing the All-Star Game to Glendale could have given the team that last financial boost that it was looking for.
The team has been begging to host the Winter Classic for years, but nothing ever seems to come of it. Looking at how financially lucrative the Stadium Series is- particularly last year, when the league pushed heavily to promote the series through free events and public festivals on the days of the games- the team could easily use this reasoning to further prove why the team should be enabled to host one of the games. Bringing that kind of financial success to Arizona, even just for a day, could do even more to spark interest in the sport for citizens of the Glendale area.