Hearken back five years, when the National Hockey League looked to be inching toward its demise.
Most of the 30 franchises were losing money, and two had recently declared bankruptcy. Player salaries were approaching $2 million a year in a league increasingly regarded as second-tier. On the horizon a lockout loomed, with no guarantee fans would care when and if the NHL reopened.
But as the league prepares to celebrate the 100th anniversary of the Montreal Canadiens franchise with its All-Star Game at the Bell Centre this weekend, the NHL is reinvigorated, even amid a grim economy.
Consider: through Jan. 11, overall attendance was higher than the 2007-2008 season, with franchises such as the Washington Capitals on pace to set new records. A number of corporate partners have either inaugurated sponsorships or renewed deals with the league in the past year, including well-regarded names such as Honda, McDonald’s, Ticketmaster and Cisco.
"The game is still on a resurgence since the work stoppage,” said NHL COO John Collins, referring to the 2004-2005 lockout which engineered the introduction of a salary cap. “We're seeing dramatic turnarounds (in attendance) in significant markets. Chicago is a poster child."
The sold-out Winter Classic at Wrigley Field on New Year’s Day also attracted 4.4 million television viewers, the most-watched regular-season game since Philadelphia’s Broad Street Bullies ruled the league in the 1970s, while merchandise sales during the Detroit-Chicago game exceeded even those of Cubs’ playoff contests. And, for the second year in a row, the regular-season affair enjoyed a corporate sponsor (Bridgestone).
Despite the Winter Classic’s success, Collins said there are no plans at the moment to expand it into a series of games.
"It's still a little early to think of that,” he said. “We like the big-event feel of Jan. 1."
A slew of young stars, such as Patrick Kane and Jonathan Toews in Chicago along with Sidney Crosby of Stanley Cup runner-up Pittsburgh, are attracting a new generation of fans. For this year’s All-Star Weekend, a new event has been created: a game between first-year players and second-year players, which will showcase budding talent. And fortunately for the league, reports say players are unlikely to opt out of the collective bargaining agreement this fall, which will give the NHL stability at least for a few more years.
Franchise values are hitting record highs. According to Forbes, the Toronto Maple Leafs are tops in the league, despite having not won a Stanley Cup since 1967. They are now worth north of $400 million, up from $332 million the year before. Interestingly enough, five of the top seven team valuations belong to Original Six franchises (the Blackhawks weigh in at 16th at $179 million, up seven percent from the previous season).
At the same time, the league faces problems. The Phoenix Coyotes counted less than $20 million in ticket revenue last season (Toronto brought in about $60 million with a sky-high average ticket price of $70). In spite of an improvement this year, the Coyotes are reported to be veering toward bankruptcy. The New York Islanders are also in dire straits. The league’s television deal remains one of the weakest in pro sports.
Bill Daly, deputy commissioner of the NHL, cited media as one of the key areas the league needs to work on in the coming years.
”We need to continue to grow our league-generated revenues through national media (both new media and traditional) and sponsorship,” he noted.
This weekend in Montreal, existing NHL sponsors plan to gather and market themselves like never before. The league estimates $10 million will be spent on such items as Breakaway Challenge (sponsored by ConAgra),Xbox (host of an interactive gaming zone) and UpperDeck (presenting sponsor of a memorabilia show).
So the NHL has much to be pleased about as it enters its last All-Star Weekend until 2011 (the Winter Olympics takes precedence next year). Though its prospects were sketchy as recently as 2004, the NHL now is clearly on solid ice.