Is there money in ice hockey?

Marc Elliott

WILD owner Craig Leipold

CARLTON PEAK – I saw my first professional hockey game in the early sixties. It was a Sunday afternoon tilt between the Montreal Canadiens and the Chicago Blackhawks. I was a young kid viewing the proceedings on an old black-and-white TV and after a couple of minutes of watching this entirely new experience had my rapt attention. I was at my family's residence just off West Seventh in the capital city of St. Paul. Two blocks away were the local outdoor hockey and skating rink and the old St. Paul auditorium, the home of the CHL St. Paul Rangers was minutes away.

I would soon start playing and then join a team and just about as much time as possible was spent practicing the craft in countless pickup games of pond hockey. Frozen toes and runny noses were frequent reminders of at least some of the price to be paid as a young "apprentice" of the sport that dominates cold Minnesota winters.

I could catch one National Hockey League game a week back then when one of the major networks featured a Sunday game of the week. But other than that my knowledge of the league was restricted to that and whatever newspaper stories I could come across. That changed when I was in junior high and it was announced that a group of Twin Cities businessmen had obtained the rights to an NHL expansion team that would play in a new arena under construction out in Bloomington right off of the 494 strip. They would be the new neighbors of the old Met Stadium, home of the Twins and Vikings. The arena was constructed for $7mil and had the best sightlines of any building in the game when it opened for play.

Growing up I had a keen interest in many things. If I experienced something it was a sure bet that I would be digging for as much information and education as I could find on that given topic. Hockey was no different. After becoming hooked by the game, I couldn't find out enough about it and sought out books and other material on it. While there was an abundance of info available on coaches, players, teams, and playoff years, now that I think back there didn't seem to be a lot of data available on the business end of the game. At the time I can't say it interested me much, but it was developing.

The Minnesota NorthStars were part of the first league expansion. They, along with five other teams began play in the 1967-68 season. The first six NHL teams came to be known as the Original Six. This group of new teams was referred to as "The Next Six." The Minnesota club was led by locals Walter Bush Jr. and Robert Ridder. They paid a whopping $2mil for the expansion fee, (mere lunch money by today's standards) and in May of 1966 a contest was held for the fans to name the team and the "NorthStars" name was the winner. It was an homage to the state moniker of "The Star of the North."

So, for somewhere around $10mil the NHL was now in business in The State of Hockey. You could see a game in person starting at $5 on up. Player salaries were better than working at the local factory of note, but of the four major sports in the US, they were behind the others and you would take a veritable beating to earn your pay. It was a very tough league and sport to make a living in.

In the states the game and the league were considered to be a "niche" sport and not in the mainstream. Baseball was still on top with the NFL slowly carving out its gains. It wasn't often mentioned in mainstream sports media but the NHL struggled for years from a business standpoint. Many fans don't know it but the league was close to financial insolvency at least once in just the past forty years.

In the early '90s and for a variety of reasons, the NorthStars were close to folding and ended up relocating to Dallas. For anyone that loved the game and that team here, the sting of that is still verbally challenging to describe. It was a much different time in the game with harsh underlying economics.

Fast forward to the later '90s. New Commissioner Gary Bettman is early into his tenure and is still kind of "settling in." Local businessman Bob Naegele decided that the area had been without an NHL team long enough. He and the league got together and with Naegele plunking down an $80mil expansion fee and another $45mil toward the construction of the Xcel Energy Center, the club would begin play in the 2000-01 season, bringing the league to a total of 30 teams. This was the conclusion of a 1990 NHL plan to expand to that number.

At that point hockey still lagged behind the other majors in the US in terms of revenue streams through media rights. The league was behind the others in just about all sources of revenues. This would become a focus of Bettman's beginning then and continuing to this day.

There was a time when just a handful of teams were financially solvent while much of the league was not. This was evidenced by wide discrepancies in what some teams were spending on player salaries.

And then the long-rumored fight to institute a salary "cap" in the league came about and cost the league a season when the players were locked out. In Bettman-speak the cap became known as "cost certainty" and the lockout of the players by the league was termed a "labor stoppage." Looking back now the cap was a necessity to save the league from itself. It made financial sense and has delivered parity to the league.

In addition it has benefitted the players as well. In 1970 the average player's salary was $18k. The average is $3.5 mil today. That number is skewered by top-end player pay, but it has increased substantially.

Increasing league revenues, enhancing media rights deals and team valuations became a focus of Bettman's from the 04-05 lockout forward.

The league added two more teams in expansion deals to round out to 32 teams. The Vegas entry paid a $500mil fee and Seattle paid a whopping $650mil to get into the party. The league's new American TV deal is shared by ESPN and Turner Sports and is worth roughly $625mil per season to the NHL. The league is in the middle of a Canadian TV deal worth $5.32bil over 12 seasons.

In early 2008 Naegele sold his interest in the WILD to current owner Craig Leipold. While no sale price was announced the value of the team at that time was an estimated $180mil. A Forbes group 2022 NHL team value ranking listed the Wild at 22nd on the list at $850mil. Holy equity, Batman! That was an increase of 26% over the previous year's valuation! It also means that Leipold has obtained an ROI of about four times his original investment!

Translating the trajectory of all NHL business from my youth to the present is crazy, but it's a crazy in a good place right now. PEACE