Inside the NHL
A number of readers wrote in last week inquiring about my statement that NHL players make salaries comparable to other major professional sports leagues.
The wording attempted to add context to why NHL ticket prices are so high, namely because hockey players earn salaries comparable to NBA, MLB and NFL athletes without the same national television revenues to help pay for them. Several readers questioned NHL wages being comparable, but part of their confusion likely stems from using improper measurements to gauge salaries.
First, comparing salaries of top athletes in every sport isn’t all that helpful. Just because the top 5% of elite players in one league make more than those in another doesn’t mean the same is true for the remaining 95%.
That’s also why comparing average salaries isn’t always best — those again being skewed by extreme highs or lows. Looking at Statista.com, the average salaries in the 2017-18 season had the NBA at $7.7 million, MLB at $4.51 million, the NFL at $2.91 million and NHL at $2.78 million, which, mind you, isn’t all that big a difference for three of the four leagues.
But when using what’s widely considered the most impartial measurement for comparing leagues — the “median” or “middle” salaries — MLB drops to No. 4 and NHL leapfrogs to No. 3. If we calculate the median “cap hit” versions of 2019 salaries across various leagues on Spotrac.com, we’ll see the NBA at $4.46 million, followed by NFL at $3 million, NHL at $2.25 million and MLB at $1.375 million.
The reason MLB fell so much is 40 of its players — about 5% of 860 total roster spots — earned $20 million or more and dramatically inflated average wages beyond what’s normal for most in that circuit.
Where does Major League Soccer factor in terms of median salary? Way down at $188,000.
So, yes, NHL is indeed comparable to “major pro’’ sports in median salary because it is higher than MLB, about 75% of NFL and within half of NBA. MLS, for example, is not comparable, given median wages eight times smaller than the No. 4 major pro sport.
Why does this topic matter beyond internet arguments? Well, getting back to ticket pricing, especially in light of NHL Seattle costs for club season seats recently released, something has to pay for those wages and national TV revenue isn’t doing it.
For this part of the column, the top-earners do play in somewhat because they contribute to the total amount each league spends on salaries. In general, the NHL spends 40 percent what the NFL does, 55 percent what MLB does and 65 percent what the NBA commits annually to salaries, depending on the websites consulted and once roster sizes are factored in.
Here’s the problem: The NFL averages about $7 billion per season on national TV, the NBA about $2.67 billion and MLB roughly $1.55 billion, while the NHL’s deals with NBC and with Rogers in Canada — once a 76-cent exchange rate is factored in — average out to only $530 million or so annually.
That’s 34 percent of MLB’s haul, 20 percent of the NBA’s and 8 percent of the NFL’s intake.
So, the NHL makes it up at the ticket window with some of the highest gate prices in sport.
According to Statista, NHL gate receipts from the 2017-18 season accounted for 37% of total revenue, compared to 27% in MLB, 22% in the NBA and 16% in the NFL. Forbes reviewed the same 2017-18 season and estimated 75% of NHL revenue came from tickets and affiliated gameday sales of merchandise and concessions.
We can quibble over which site has the best numbers and ways of measuring them, but you can’t really hide the disparities between leagues.
Now, things are looking up for the NHL on the TV front, with the potential for doubling its U.S. intake once NBC’s deal expires after 2020-21. That could provide up to $200 million more per season and take annual national TV revenue well beyond $700 million on average.
Throw in expected new sports gambling revenue, and it’s possible the steep yearly inclines in hockey ticket prices could slow. We’ve mentioned that teams in NHL-crazed Canadian cities have recently struggled to sell out games, so it’s possible prices are reaching limits even the most devoted fans will tolerate.
Which brings us to NHL Seattle and its season ticket pricing.
As we wrote last week, the team is requiring a minimum commitment of three years on sales of 2,600 premium seats going for $12,540 to $15,620 each. That’s a minimum of $37,620 to $46,860 per ticket in guaranteed revenue for the team.
Assuming an average mid-range sales price of $14,000 per ticket, that’s about $36.4 million per season and $109.2 million in guaranteed three-year revenue on club seats. That’ll pay for a few salaries.
Sure, the team is using current pricing for seasons to be played several years from now. But if a team is of the mind that pricing is already near saturation, locking that future right now makes sense.
And honestly, it’s not like NHL Seattle is pricing at the league’s low end. Much of what we’re seeing now ranks with higher-priced teams and seems to be taking an uncertain future into account.
Regardless, something has to pay the cost of operating as a major pro league. And until the NHL’s national TV money starts measuring up to other leagues, that “something literally is the price of admission for fans wanting to see hockey.