A new HMI study finds the NHL is “a low-risk” sport in the long run and is unlikely to experience significant growth in attendance this season.
HMI Senior Analyst Scott Kacsmar said the report also finds the league’s business model could be “at risk” if it continues to expand beyond its current capacity of 2,000 arenas.
“We have found that the NHL has a low-growth potential in the short-term.
We believe the market is unlikely for growth of this size,” Kacsmas said.
“The model is a very difficult one to maintain, especially given the financial challenges that are inherent in this model.
This is an expensive business model.
There is a tremendous amount of risk associated with the model and this is something that the league is going to have to deal with in the near term.”
The NHL has more than 2,200 arenas, including more than 200 in Canada.
While expansion into the United States, which is projected to bring another 3,000 fans to games each year, has been discussed as a potential revenue driver, the league has so far avoided those discussions.
The NHL’s future in the U.S. remains in question after the league moved to a 20-team league model in 2020.
The league currently has one team in the Los Angeles area, while four teams are in other markets.
Kacsmar also said the league could find itself in a “tough spot” if the NBA, which has struggled with attendance and revenue this season, expands to 32 teams in the next decade.
“The NBA, the biggest threat for the NHL, has a great history in the United State, but it has to figure out how to attract more fans and generate more revenue, which would mean expansion to the 30 teams in Los Angeles, Dallas and Phoenix,” Kausmar said.
“There is no doubt that expansion is a big risk, and if the league does not have a solution, the NBA has to think about what to do.
There are a lot of unknowns, so it is a tough position.”
Kacsmas also said he believes the NHL’s salary cap is set to double next season and that this could create a “huge opportunity” for expansion.