NHL Opens Season Facing Billions in Losses from COVID-19

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Barry M. Bloom
·7 min read
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The National Hockey League is opening its COVID-shortened 56-game regular season Wednesday with a slate of five games, three of them in Canada.

Built around a regional schedule and four divisions, including one for all seven Canadian teams, the season has already been crosschecked by the pandemic.

The San Jose Sharks may be looking for a place to play their home games because of restrictions in northern California’s Santa Clara County. Meanwhile, the Dallas Stars have already had their season delayed at least four days and their camp shut down because of a COVID outbreak. The NHL reported Tuesday that 27 players on nine teams have tested positive since training camp opened, including 17 on the Stars, most of them asymptomatic. The league is closely monitoring that situation.

Still, the league plans to open games to fans on a very limited basis in three of its 31 cities. For a league that relies on 50% of its revenue from in-person attendance—through ticket sales, concessions, parking and advertising—the NHL is sure to take a financial bath, commissioner Gary Bettman said Monday in a media Zoom session that included deputy Bill Daly.

“The magnitude of the loss when you add it all up starts with a B,” Bettman said, referring to the word billion while declining to specify an actual figure. “We’re out of the M-range and into the B-range. That’s just what we have to deal with and what the clubs have decided to do, even though it would be a smaller number if we just shut down for a year.”

That loss could be in the neighborhood of $2.5 billion, based on the $5.09 billion the league generated overall in 2018-19, the last full season season before the games were halted last March 12 and resumed nearly five months later with the playoffs in bubble cities.

Those losses are on the low end, compared with the other three major professional sports leagues in the U.S. Based on figures collected by Sportico over the past few months, the National Football League is looking at $5.5 billion in revenue losses, the National Basketball Association $3.5 billion and Major League Baseball about $3 billion.

That’s a total of $14.5 billion in lost revenue for the four sports. The NHL, in the last year of its U.S. television contract with NBC worth $250 million a season, doesn’t generate the TV revenue amassed by the other sports leagues.

In addition, MLB commissioner Rob Manfred told Sportico this past October during the World Series that baseball owners had assumed $8.3 billion in debt to operate during an abbreviated 60-game season.

Similarly, Bettman said NHL owners would assume some unspecified amount of debt in the coming season.

“All of our teams have the ability to get through this,” Bettman said. “We’ve made some financial arrangements to make sure cash flow is what it needs to be, although that’s not found money. That’s debt. And our club owners are having to write checks. And while there’s an economic consequence to playing the season, all of our owners and clubs are in a position to weather it. We have no concerns in that regard other than the fact that everybody is going to lose a lot of money to do this.”

In addition, Bettman reiterated it would have been far more cost-effective for the NHL to shutter the season and return in 2022-23 when the coronavirus is expected to be better-contained and a great portion of the populace is vaccinated.

“Let me make something really clear: We’re coming back to play this season because we think it’s important for the game, because our fans and our players want us to, and it may give people—particularly in isolation or where there are curfews—a sense of normalcy and something to do,” Bettman said. “It would be cheaper for us to shut the doors and not play. We’re going to lose more money, at the club level and the league level, by playing than by not playing.”

Bettman added that selling sponsorships on helmets or the naming rights of each of the four divisions is not generating new revenue.

“They’re [aimed at] revenue retention,” he said. “It gives us the ability to retain revenues rather than have to refund it because of the nature of this season.”

Be that as it may, the NHL will open the season with about 5,000 fans in the stands at BB&T Center for Panthers games in Sunrise, Florida, the same when the season finally opens for the Stars at American Airlines Center in Dallas, and 3,450 for the Coyotes at Gila River Arena in Glendale, Arizona.

Health and safety protocols will be in place, including socially distanced seating, mandatory masking while not eating or drinking, and hand sanitizing. Still, as of Tuesday, Texas, Florida and Arizona were among the top five states as far as increased caseloads for the disease.

For the foreseeable future, the seven Canadian cities, plus major U.S. markets like New York, Los Angeles, Boston, Philadelphia, Chicago, Washington and the San Francisco Bay Area will not host fans. The operators of Amelie Arena in Tampa have reversed course and will bar fans from attending NBA and NHL games through at least Feb. 5 because of increased cases and deaths in the area. The NBA’s Toronto Raptors have been relocated to Tampa this season because of border restrictions entering provinces in eastern Canada and had allowed about 4,000 people to attend their early season games.

That decision puts into question attendance at the Super Bowl, which is slated to be played Feb. 7 in Tampa’s Raymond James Stadium, where fans have been able to attend Buccaneer games at 25% capacity since mid-October.

As far as the Sharks are concerned, the club’s management was slated to meet with Santa Clara health officials Tuesday to discuss availability of the SAP Center, but it doesn’t look good. Because of a ban on contact sports and a stay-at-home order in the county, the NFL’s 49ers were forced to play their final three home games at State Farm Stadium in Arizona, sharing the facility with the Cardinals. California continues to have the highest growth of coronavirus cases and deaths of any state in the nation.

The Sharks have been preparing for the season in the Phoenix area, and the NHL has slated them to play their first eight games on the road, including openers against the Coyotes at Gila River Thursday night and Saturday afternoon. San Jose’s first “home” game is scheduled for Feb. 1.

“They’re playing it by ear,” Daly said. “It’s obviously a very difficult situation for the club. It’s a difficult situation for the players, having to conduct training camp away from their families and not really having any certainty with respect to when they’ll be able to return to San Jose with some sense of normalcy.

“Obviously that club will be prepared to play its designated home games at an alternative venue should it come to that.”

Daly didn’t specify that venue, although Gila River, which is a hockey-only arena, would seem to be an obvious choice.

The Sharks find themselves in the same predicament as the Raptors and Blue Jays, who both had to play outside of Toronto this season. The Blue Jays ultimately played most of their home games at Sahlen Field, a Triple-A facility in Buffalo.

Meanwhile, after much negotiation with the Canadian government, the Montreal Canadiens are slated to open the season against the Maple Leafs at Toronto’s Scotiabank Arena Wednesday. Toronto, along with Edmonton, were the two bubble settings where the playoffs were staged when play resumed without incident last year. But Ontario and Quebec have been in various phases of shutdown since the Christmas holidays.

All seven Canadian teams are in the North Division and will not cross into the U.S. to play this season.

“It was a good process,” Daly said about getting to this point. “[Canadian health officials] took a lot of time reviewing [our] protocols. At the end of the day, we’re all comfortable that games will be safe not only for NHL participants, but for the communities in which we play.”

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