The Ottawa Senators hit the market 12 months ago. If this was a realtor selling a home, the listing might have included euphemisms like “needs TLC” or “cozy” or “lots of possibilities.” Ottawa was headed for a sixth straight season with a losing record and no playoffs; attendance ranked in the bottom quartile; only the Arizona Coyotes, playing in a college arena, posted lower revenue last season; and the club was—and still is—in desperate need of a new arena.
Yet, this fixer-upper triggered a frenzied bidding process that attracted bold-faced names including Ryan Reynolds, Snoop Dogg and The Weeknd. More than a dozen investor groups kicked the tires on the team, and nine of them submitted bids. It ultimately sold for $950 million to a group led by Michael Andlauer.
The NHL doesn’t have the buzz of the NBA or blockbuster media deals of the NFL, but its franchise values are soaring just as fast with the biggest gains at the bottom of the financial table.
Sportico spoke to more than 30 people in and around the NHL over the last four weeks, including eight bankers and lawyers involved in team transactions, to gauge the health of the sport. We found the average team is worth an estimated $1.31 billion, up 29% from a year ago. The total value of the NHL’s 32 clubs, including ownerships’ stakes in real estate, venues, TV networks and team-related holdings, is $41.9 billion. Click for a ranking of all 32 teams or a data visualization comparing the teams.
The Toronto Maple Leafs rank first at $2.65 billion followed by the New York Rangers ($2.45 billion) and Montreal Canadiens ($2.27 billion). Our estimates are control sale valuations, instead of limited partner investments, with revenue multiples the foundation of the calculations. Details on the methodology and a breakdown of the 32 NHL teams can be found here.
“Sports teams if done right are like the best SAS business models,” Ted Leonsis, Monumental Sports & Entertainment majority owner, said at Sportico’s Invest in Sports conference last month. “The reason that [SAS firms] are so valuable is they have ongoing, reoccurring, predictable relationships over time.”
Team Sales
Eugene Melnyk bought the Senators out of bankruptcy two decades ago for $92 million, and his heirs just sold the team for 10 times that. The price was nearly seven times Ottawa’s 2022-23 revenue of $139 million. For comparison, the 10 NHL teams sold between 2011 and 2020 were valued between two and four times their respective revenues, with the exceptions of the Maple Leafs (2012) and New York Islanders (2014) transactions. The revenue multiple jumped with the two team sales before Ottawa—Pittsburgh Penguins (2021) and Nashville Predators (2023)—which traded at an average of 4.5 times revenue.
Ottawa sold for a premium price thanks in part to the opportunity to secure a new arena and the rare chance to buy an NHL franchise in Canada—the Leafs were the last one sold, and the only NHL transaction valued higher than the Senators at roughly $1 billion when Rogers Communications and BCE bought Maple Leaf Sports & Entertainment.
The Ottawa deal follows a trend experienced in the NFL, NBA and MLS. During much of the past decade, there was a growing bifurcation in the value of sports teams, as ones in attractive markets garnered larger and larger premiums compared to clubs in less appealing ones. But more recently, the entry price or “stick value” of a team in these leagues has skyrocketed, causing teams at the bottom of the financial table to trade at higher multiples of revenue than ones in better markets in some cases.
It helps that the profit picture has improved at many of these clubs, with even Ottawa cash flow positive last season. Credit more owner-friendly collective bargaining agreements, as well as revenue sharing in the NBA and NHL—low revenue NHL teams pocketed nearly $300 million last season under the NHL’s plan, and the annual subsidies should hit $400 million within the next couple of seasons. The scarcity value of these assets is also better appreciated, making any seat at the table a valuable commodity, whether in New York or Ottawa.
In the NHL, more than 60% of the teams are valued between $880 million and $1.25 billion, by Sportico’s calculations. The NBA and NFL are in a different universe, and most NHL values sit between those of top MLS teams and the bottom half of MLB’s financial table.
At least four other NHL teams sold minority interests of at least 5% over the last six months that shine a light on the different entities looking at the sport. These LP transactions can occur at both a premium or a discount to a control sale, depending on the circumstances.
The NHL approved private equity investors in late 2021, and this summer, Arctos Sports Partners closed its second investment in the Tampa Bay Lightning. It required a special waiver from the league office since the double dip pushed Arctos past the 20% cap a firm can own of an individual team. The deal carried a $1.4 billion valuation, although the PE firm likely secured an LP discount of at least 20% to that appraisal. Arctos has also invested in the Minnesota Wild, as well as the New Jersey Devils and Pittsburgh Penguins via their respective holding companies, Harris Blitzer Sports & Entertainment and Fenway Sports Group.
In June, Qatar’s sovereign wealth fund, the Qatar Investment Authority (QIA), purchased a roughly 5% interest in Monumental Sports, which includes the NBA’s Wizards, NHL’s Capitals and WNBA’s Mystics, at a $4.05 billion valuation. It was the first investment by a sovereign wealth fund in an NHL team. Like PE investments, these deals are capped at 20% from a single fund and 30% from multiple funds. They must be passive stakes without any representation on a team's board of directors.
The Maple Leafs’ Stanley Cup drought is now 56 seasons, but the team sits atop Sportico’s valuations for the third straight year, with a near consensus among experts on its standing as hockey’s most valuable club. It is the lone hockey franchise in the largest city of hockey-mad Canada—the metro population is 53% larger than that of Montreal. The Leafs have the highest sponsor and media revenue in the NHL, including their $30 million-a-year arena naming rights deal with Scotiabank. MLSE also owns the venue, which ranked No. 11 last year in the world among arenas with $79 billion in concert ticket revenue from 67 shows, according to Billboard.
The value of the Leafs and MLSE was on display this summer when Larry Tanenbaum agreed to sell a 20% stake in his family holding company, Kilmer Sports, which owns his 25% share in MLSE. OMERS—a pension plan for 500,000 Ontario municipal employees—invested in Kilmer Sports in a complicated transaction that values MLSE at as much as $8 billion if certain thresholds are met. MLSE also includes the NBA’s Toronto Raptors, MLS’ Toronto FC, CFL’s Argonauts and their respective venues.
The Ottawa sale forced Andlauer to unload his 10% share of the Canadiens, which he acquired when the Molson family bought the team for $575 million in 2009. The family exercised its right of first refusal with a valuation of $2.5 billion on the LP deal this fall.
With the Ottawa sale, there are no control stakes of NHL teams currently on the market.
Expansion beyond 32 teams is not on the immediate horizon, but a $2 billion potential fee is already being bandied about in league circles, or more than three times the $650 million that the Seattle Kraken paid when it joined the NHL to start the 2021-22 season.
"We're just getting expressions of interest, and I take meetings all the time on a variety of subjects," NHL commissioner Gary Bettman told the media after the Board of Governors meetings in October. "If somebody wants to talk to us, we talk to them."
Ice Economics
NHL teams generated an estimated $6.8 billion in revenue during the 2022-23 season, including non-NHL events in cases where teams own or operate their buildings. It marked a 11% increase over the previous year, which was still impacted by COVID-19, particularly in Canadian cities that had capacity restrictions to start the season.
The NHL’s salary cap has barely budged the past four years, as players owed a $1.5 billion “debt” to make up for revenue shortfalls triggered by COVID-19. The cap is determined by league revenue, and the NHL CBA requires owners and players to evenly split hockey related revenue. Speculation swirled that the cap might not resume regular increases until 2026, but revenue has grown faster than anticipated, and the debt was nearly extinguished by the end of the 2022-23 season. The cap is projected to jump 5% next season.
The NHL has a hard cap on both the league and team level. You don’t have the loopholes, like in the NBA where the Warriors and Clippers are on the hook for a combined luxury tax bill of roughly $300 million both last season and the current one on top of their high payrolls. Before the NHL cap was introduced for the 2005-06 season, teams were generating on average around $20 million in cash flow after player costs but before other expenses; the average is now more than $100 million.
Club revenues have benefited from the introduction of helmet sponsorships in 2020 and jersey patches two years later. Last season, the NHL launched its new digitally enhanced dasherboards, and revenue topped $50 million, which exceeded the league’s original Year 3 projections, according to someone familiar with the forecasts. Another revenue bump last season came from the concerts and event business, which hit record numbers in many cities, as fans embraced live events.
NHL teams are less reliant on local media revenue than the average NBA or MLB team, so in one sense the bankruptcy of Diamond Sports Group should have a smaller impact. Hockey remains a must programming option in Canada and certain U.S. markets, such as Minnesota and Boston—Bruins ratings bettered the Celtics and Red Sox last season. Yet hockey draws much lower ratings in certain markets, which could trigger rights fee cuts or broadcasts dropped entirely from RSNs.
Arenas remain the biggest drivers of teams’ economics at 70% of total revenue, and teams are investing to move that percentage higher. The Los Angeles Kings, who also own Crypto.com Arena through AEG, built four new courtside bunker suites in the arena, which is also home to the Los Angeles Lakers and Clippers. The suites opened this season and all but one were immediately snapped up under long-term contracts at a cost of $5 million per year. Suite holders will have access to the myriad of concerts and premium events, like the Grammy Awards and 2028 Summer Olympics.
The Philadelphia Flyers are nearing the end of a $400 million renovation of the Wells Fargo Center that added new bars and eating options to the club level, as well as three huge new LED digital boards, and technology upgrades to help goose revenue.
NHL teams’ reliance on arena revenue highlights the importance of winning. The Devils won three Stanley Cups and appeared in a fourth Cup final over a nine-year stretch starting with the 1994-95 season, but had only a first-round playoff loss in 2018 to show for its 10 most recent seasons before last year, when it nearly doubled its win total and made the second round of the playoffs.
Sellouts increased from four to 21 last season and will top 30 this year, as the club ranked second in new full season tickets sold behind the Connor Bedard-fueled run in Chicago—the Devils will likely have to cut off season ticket sales for the first time in franchise history. The team added new premium products—20 loge boxes and 10 loft tables—which sold out immediately. The Devils also operate the Prudential Center and benefit from a heavy flow of events, with concert revenue ranked among the top 10 arenas in the world. The value of the Devils is up 41% to $1.17 billion.
The league also is in the early stages of expanding revenue outside of North America. “I think there's significant international upside potential for the NHL,” Ahron Cohen, Inner Circle Sports banker and former Arizona Coyotes CEO, said in a phone interview. “Their historical focus has been in European countries with a track-record of hockey affinity, but they have not yet meaningfully tapped into China, India, Mexico, and other major markets in Europe, like Germany, France and the UK.”
The NFL and NBA have formalized their investment platforms on the league level through 32 Equity and NBA Equity. The NHL doesn’t have an official investment vehicle but has built a portfolio of equity positions just the same in companies including DraftKings, Fanatics, Sportradar and startups in the technology space. The league originally invested in Fanatics in 2015 when the e-commerce platform was valued around $3.5 billion. It has participated in subsequent funding rounds, and Michael Rubin’s firm was valued at $31 billion in a round at the end of 2022. In 2021, the NHL pocketed $350 million when it sold its 10% stake in Disney Streaming Services, the former BAMTech, to Walt Disney. Each NHL team owns 1/32 of those cumulative equity positions.
As with NBA and NFL teams, NHL owners can use their clubs as a tentpole to move into related business ventures, but at an average team valuation of one-third (NBA) or one-fourth (NFL) as much as other leagues. The Vegas Golden Knights, San Jose Sharks and Washington Capitals have all snapped up rinks, which are at a premium in most metros—they also own AHL teams, which generate revenue and can be advantageous to have in the same market with travel for players that move up and down between the teams.
Leonsis has been one of the most aggressive in expanding his sports empire. Last year, MSE bought the 67% of NBC Sports Washington that it did not already own and then re-branded it under the Monumental banner. He has not been shy about his interest in an MLB team in the great D.C. market and has big ambitions. “Our goal is to build the world's most valuable sports and entertainment company,” Leonsis said. “And to do it in one of the 10 most important extended cities, greater Washington, on the planet.”
