TV Contract Question

[ken0042]

Just trying to get my head around some numbers:
Rogers currently has a contract for $5.232 billion (Canadian) for 12 seasons.
That is $436 million per season.

How does that money get split up? Equally between the 7 Canadian Teams? Giving each team just over $62 million per year?
Or does the NHL itself get a cut?
Or is it split among the 30 teams? If this- do we get a cut of the American TV market?

I am just figuring out how much money each team brings in from TV revenue.

[Hanni]

According to this the players get half

The money generated from the agreement is considered hockey-related revenue, which means the players receive 50 percent of the revenues based on the Collective Bargaining Agreement.

and this says

Now each team stands to earn $5 million ($4.7 million U.S.) from the upfront payment plus an average minimum $10 million ($9.5 million U.S.) to $16.6 million ($15 million U.S.) in Hockey Related Revenue over the life of the deal, as another source familiar with the deal says the money will be split evenly among all 30 teams. How the upfront payment will be accounted for could sway that number in any year.

[Resolute 14]

I'm pretty sure both the Rogers and NBC deals are equally shared among all 30 (soon 31) teams. And since it counts as HRR, the players will of course get half.

[Weitz]

I think the regional deals are split 50/50 with players and with the team that signs the deal as well.

[Resolute 14]

Yeah, regional deals are still HRR, so the players get half. Team gets the other half. In situations where the team and regional network are owned by the same group, the market value of the deal is independently determined and used for HRR purposes so as to prevent the owner from hiding TV revenue.

[GreenLantern2814]

And yet Ken King would have you believe Rogers is just going to sit by and allow one of the seven Canadian teams to 'just move' if an arena deal isn't reached.

Not bloody likely.

[Huntingwhale]

Originally Posted by Resolute 14

I'm pretty sure both the Rogers and NBC deals are equally shared among all 30 (soon 31) teams. And since it counts as HRR, the players will of course get half.

If the players get half, it goes simply to increase the salary cap?

[getbak]

Originally Posted by Huntingwhale

If the players get half, it goes simply to increase the salary cap?

Yeah, it's not really accurate to say that the players get 50% of the tv revenue (although, in the grand scheme of things, you can look at it that way).

The tv revenue goes into the total league-wide HRR. That total HRR is used to calculate the salary cap, and the CBA guarantees the players exactly 50% of all combined HRR.

The players get 50% of the money, but as part of their combined salaries, not as separate money.

[tsquared1967]

Originally Posted by GreenLantern2814

And yet Ken King would have you believe Rogers is just going to sit by and allow one of the seven Canadian teams to 'just move' if an arena deal isn't reached.

Not bloody likely.

Rogers doesn't get a vote on teams leaving for another city. NBC, CBS and Fox couldn't stop St. Louis Rams, San Diego Chargers and Oakland Raiders from leaving in the NFL.

[ken0042]

That's different. Those NFL teams moved to other markets in the same country, and one could make the argument they are better TV markets. If Rogers negotiated for 7 Canadian teams, it would change the terms if there ended up only being 6 Canadian teams.

However you can see that I was trying to ask a question somewhat related to a new arena, but tried to leave that part out.

[Weitz]

Originally Posted by Huntingwhale

If the players get half, it goes simply to increase the salary cap?

If player salarys equal more than 50% HRR then every player loses a % of their salary to "escrow".

So in reality when they keep electing to escalate the cap by 5% it's just increasing escrow and potential lost wages if HRR doesn't go up a similar amount.

[getbak]

In the distant past, the Canadian teams split the Canadian tv money and the US teams got the US money. When the owners thought that they were going to cash in on a huge US rights deal, the Canadian owners agreed to combine and split all the tv revenue equally among all teams.

That backfired on the Canadian owners because the massive US deal never happened. Back before the lockout season, Bettman created the Canadian equalization fund (or whatever it was called) to help balance out the exchange rate between the Canadian and US dollars. This essentially returned the Canadian tv money to the Canadian teams.


Since the lockout, that fund was eliminated, and all tv revenue, on both sides of the border, is split equally among all teams.

[Northendzone]

It would be interesting to know what wording rogers deal with the NHL has around expansion/contraction with respect to the number of Canadian NHL teams

[Fire]

Originally Posted by Northendzone

It would be interesting to know what wording rogers deal with the NHL has around expansion/contraction with respect to the number of Canadian NHL teams

99% sure expansion/contraction wouldn't result in any changes in the contract.

[MarkGio]

Originally Posted by ken0042

That's different. Those NFL teams moved to other markets in the same country, and one could make the argument they are better TV markets. If Rogers negotiated for 7 Canadian teams, it would change the terms if there ended up only being 6 Canadian teams.

However you can see that I was trying to ask a question somewhat related to a new arena, but tried to leave that part out.

Based on the wording of the contract you would think Rogers has grounds to sue the league, but Bettman is a lawyer who also has been a long standing commissioner. I'm sure he didn't leave himself vulnerable to such a large part of the league's business model, which is leveraging cities to pay for franchise arenas.

[Erick Estrada]

Originally Posted by MarkGio

Based on the wording of the contract you would think Rogers has grounds to sue the league, but Bettman is a lawyer who also has been a long standing commissioner. I'm sure he didn't leave himself vulnerable to such a large part of the league's business model, which is leveraging cities to pay for franchise arenas.

Only the regional contract would be affected as the national contract is based on HNIC and the rights to broadcast national games and has nothing to do with regional rights to teams. Rogers would still get the exact same amount of national games to broadcast and it's not like the viewing population in Calgary leaves with the Flames. Did HNIC ever sue the NHL when the Jets or Nordiques moved? No.

[ken0042]

Originally Posted by Erick Estrada

Did HNIC ever sue the NHL when the Jets or Nordiques moved? No.

They may not have sued, but there may have been clauses in the contract that specified number of teams, etc. Do you know for certain that wasn't the case? Not trying to bust your chops, just asking. The internet was still in its infancy in 1995 and 1996, so a web search not giving any results might not be telling the whole story.

[mikephoen]

Originally Posted by Northendzone

It would be interesting to know what wording rogers deal with the NHL has around expansion/contraction with respect to the number of Canadian NHL teams

Assuming Rogers hires the same quality of contract lawyers as they do people to run their hockey broadcasts, then I would guess that they copy and pasted the wording for their lunch order into the contract where they were supposed to put the clause for expansion/contraction.

[SofaProfessor]

Originally Posted by tsquared1967

Rogers doesn't get a vote on teams leaving for another city. NBC, CBS and Fox couldn't stop St. Louis Rams, San Diego Chargers and Oakland Raiders from leaving in the NFL.

Rogers may not get a vote but you can bet they would be less willing to throw down as much money next time the contract negotiation rolls around if there's fewer Canadian teams. Rogers is all about vertical integration. They need this popular entertainment on their networks so you tune in and see the commercials for their wireless plans and home internet. Fewer Canadian teams means fewer local games which means fewer eyes on the screen.

The networks that broadcast NFL games may have made more of a stink if the Rams or Chargers wanted to move to Great Falls, Montana. But, instead, they are moving to one of the world's largest metropolitan/tv broadcast areas. The media was drooling over this. The only NHL comparable would be moving a team to be the second NHL team in the GTA.

[Erick Estrada]

Originally Posted by ken0042

They may not have sued, but there may have been clauses in the contract that specified number of teams, etc. Do you know for certain that wasn't the case? Not trying to bust your chops, just asking. The internet was still in its infancy in 1995 and 1996, so a web search not giving any results might not be telling the whole story.

Nope I don't know if there are any clauses but if the Flames owners wanted to relocated there's no way a TV contract would matter as the league would be gaining a new TV market in Seattle (I'm assuming this is the market they would target) anyway which would help for the next US network negotiations. There may be some changes in the Rogers deal but it would likely be a formality as owners would never want to be put in a situation where TV deals impose on their abilities to relocate their team.