Gary Bettman, NHL commissioner this week hinted that the NHL may be forced to cancel the remainder of the 2019-20 season and playoffs. We estimate that this decision would cost all NHL teams over $200mm in revenues from ticket sales alone, and therefore as much as $600mm when applying a rough function of hockey-related revenues as a multiple of ticket sales. With about one-third of the league operating at a reported cash flow loss and about one half approximately barely breaking even, this would spell disaster for owners of the teams. and possibly for the players (especially if the owners try to claw back salaries akin to what is being contemplated by the NBA).
Our methodology in compiling this estimate is admittedly spartan, however, is likely a reasonable stab at the economic fallout for the NHL. We used average ticket price data for 2014-15 (last available information) and compounded 40% (and did not adjust for the Canadian dollar). We then multiplied this number times average attendance and home games remaining for each team to derive a number for the impact of canceling the remainder of the season. This number was $48mm.
We then performed a simulation of a possible playoff format as speculated by the New York Times Under their scenario, when applied to our AB metric, we concluded that if the team with the higher AB score prevailed in each case (which is not particularly far fetched as we have demonstrated over the years), each would play a number of home games proportionate to their success. We concluded that the NHL would miss 91 playoff games over 16 rounds of the Stanley Cup Playoffs (5.68 games per round). This would cost the NHL, based on the data for the teams playing the games $162mm (with Boston eventually winning the cup and playing 12 home games over the course of the playoffs, a $26mm hit by itself for the Bruins).
We hope, as does everyone, that the public health is served and that the NHL may successfully conclude its season with maximal entertainment value (that only the NHL playoffs can provide) as well as minimal economic impact.
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