The NHL is Surging in Value

Maple Leafs are most valuable NHL team

The average NHL team now has an enterprise value (equity plus net debt) of $413 million, 46% more than a year ago. For the first time since Forbes began tracking NHL team values in 1998, three of the league’s five most valuable teams–Toronto Maple Leafs($1.15 billion), Montreal Canadiens ($775 million), Vancouver Canucks ($700 million)–are Canadian. The New York Rangers ($850 million) and defending Stanley Cup champion Chicago Blackhawks ($625 million) are the two U.S. teams to make the top five. And this is also the first time that every Canadian franchise ranks among the top 16 in the 30 team league. 

Why is this so important for the NHL? Because hockey was born in Canada. Nurtured there. And it is where the majority of the game’s stars are born and hone their skills. In Canada, hockey is not just another professional sport. The ice is where character is measured. Hockey isn’t a religion in Canada. It isthe religion. This passion delivers at the turnstiles–regardless of market size.

Reference: The NHL's Most Valuable Teams.

I'd like to believe that the Blackhawks have had a significant contribution to this NHL surge.  They play hockey with finesse - skating agility and speed, puck handling and passing wizardry, and scoring prowess - rather than fight or brawn.  Moreover, they have proven themselves to be tough players as well.  In virtually every playoff game last season, opposing teams have outhit them.  Still they endured, and came away with the Stanley Cup championship.

It baffled me that opposing coaches, especially Claude Julien of the Bruins, kept at this hard hitting strategy through their final loss in that Cup-winning Game 6 last June.  It didn't work.  Specifically his Bruins laid out quite a heavy artillery in the first period, and Blackhawks weathered the blitzkreig with just a 1-0 deficit.  By the second period, the Bruins were noticeably worn down, and were consequently vulnerable to those thrilling two goals in 17 seconds by the Blackhawks in the waning minute of that fateful Game 6.

These findings from Forbes make sense:  While markets in US cities are big, the hockey markets in Canada are bigger for NHL teams.  So should the Coyotes, Panthers and Lightning relocate to Canadian cities?  It bears serious consideration for owners, if it hasn't yet.  

Expect the NHL to become more popular, and thus more valuable, as TV deals, ticket sales, and retail under gird its business model.  Top players will garner more endorsements, and supplement their incomes with off-ice earnings, as do NFL and NBA players.

Thank for you reading, and let me know what you think!

Ron Villejo, PhD