June 25, 2009

NHL Needs To Invest Beyond USA

The NHL is hell bent on making hockey work in the United States.

They may be on the wrong track, at least in the short term, by focusing on Sunbelt teams and maybe Kansas City and Las Vegas in the future. But they have correctly identified a long term solution - investing in grassroots, youth and amateur hockey in the USA.

This past season the NHL committed to up to $8 million US of financial support directly to USA Hockey, who then administers it as they see fit. That's up from $400,000 in 2005 and $1.2 million in 2008. The goal is to get more American players in the long term, in order to better stock and market American players in those non-traditional hockey markets.

Perhaps even the NHL is inspired by Barack Obama's stimulus plans.

But the NHL is missing the boat is outside of the USA. You know, in the countries that actually produce most of the players in the league - Canada and the European countries, especially in Russia and the Czech Republic, where hockey at the grassroots level is potentially about to face dark days.

This past season the NHL handed out $125,000 to Hockey Canada for grassroots programs in hockey's #1 country. I do not know how much, if any, the NHL gave any of the European countries. I suspect it would be no more than what Canada got, and certainly nowhere near as much as the $8 million USA Hockey got and will continue to get in coming years.

Beyond that, the NHL needs to better compensate CHL junior hockey teams that develop so much professional talent. And of course the European federations have long been after better transfer agreements.

The NHL needs to be rethink their sudden new found generosity and spread the wealth.


Anonymous said...

Certainly there are ominous rumblings about the future of youth hockey in Canada, but to portray that situation as parallel in any way to the grassroots hockey situation in the United States is imprecise at best. They are wildly different environments with vastly disproportionate levels of support, interest, expense and funding. A congruent comparison of the two really can’t be made. The strength of Canada’s youth hockey – with “strength” being used to encompass the terms “support,” “interest,” and “funding” – is almost immeasurably far above that of the United States. As such, it’s difficult to defend your assertion that the NHL should view Canadian hockey as having the same or even similar financial support needs as American hockey. Furthermore, your mention of the $125,000 the NHL allegedly gave to Hockey Canada only tells a portion of the story. A claim like that really should include mention that the NHL has helped bankroll Canadian hockey – especially the Canadian junior ranks – since at least the 1950s. The level of NHL financial support received by Canadian programs during that span far outweighs the financial contributions the NHL has made to grassroots American hockey efforts during the same time. Lastly, it should be noted that the NHL is making a fairly lucid strategic play by increasing its investment in American hockey. Canada is the home of hockey. Regardless of the ominous rumblings, hockey will always be Canada’s No. 1 sport and, as such, the vast majority of great athletes in Canada will always choose to play hockey. Those athletes will matriculate through the well-funded and operated Canadian youth and junior ranks with the sole goal of playing in the NHL. In a sense, the NHL has already “cornered the market” in Canada. As a result, there’s really no reason for the NHL to invest even more money in a market it already owns. The United States is a vast, untapped resource. It has the infrastructure and numbers to be a boon to the NHL talent pool, but not the interest or depth of funding present in Canada. By investing (significantly) in American grassroots hockey, the NHL is hedging its bet that a new frontier of elite, entertaining talent awaits just below the 49th Parallel. It’s a gamble with good odds for the NHL. Even in the highly unlikely case that an increasing number of Americans don’t become elite NHL talents, the league’s efforts to stoke a passion for hockey among American kids will render adults who love the game – and buy tickets.

Unknown said...

I disagree. The idea isnt to develop better talent for the league (frankly we already have good enough talent). While your theory suggests improving the talent pool this will not draw a significant number of new fans. However, focusing money on the local market (ie USA Hockey). This will improve the local talent in theory making them better / more common in the NHL. Local fans will then in theory be more interested in the game. This isnt an investment to improve the talent but rather as an investment in local talent to get more local viewers interested. You can argue that the NHL should expand internationally but we just arent there yet. The american market is in many ways still developing and having more american born players can only help its popularity. That being said 8M to USA hockey has a much higher rate of return to the Owners than to Russia for example

Anonymous said...

It's not about growing talent it's about growing a market. Look they dont care where the players come from they have more than enough players but to get people to watch hockey they need people who've played hockey or know something about the game. You get people playing hockey in the states your much more likely to have people interested in watching hockey. It's that simple.

Anonymous said...

So typical of Bettman.
More money comes out of Canada to support American teams that anywhere near what the NHL paid under the Canadian assistance program.
20% of the teams brings in 32% of the revenues. Let's not forget the lucrative TV monies CBC, TSN and others pay to broadcast games.
I don't care what anyone says on this matter, you can not justify this BS.

Anonymous said...

So essentially, Canadian hockey fans are sending their money (via the NHL) to USA Hockey so they can develop players to compete against our own in international tournaments. Yup, that sounds like Bettman's NHL to me!

Anonymous said...

According to Forbes' report in October 2008, six of the NHL's top 10 revenue-generating teams are from the United States. While there is no question that the six Canadian-based teams and their fans contribute significantly to the NHL's revenue, it's not accurate to suggest that the NHL is using only (or even primarily) Canadian dollars to support American hockey.

Anonymous said...

Then what's the ratio of US revenue to Canadian revenue? I can tell you it's not 8 million to 125k, that's for sure.