CBA School: Article 50 – Team Payroll Range System (part 1, Hockey Related Revenue)
By Ryan Pike
4 years agoThe good news is we’re almost through our thorough review of the CBA. The bad news is we’re into the longest and densest sections. So we’re splitting the next Article in two, as Article 50 detailing the cap system is 82 pages long and incredibly detailed.
So here’s Article 50: Team Payroll Range System – Part 1, Hockey Related Revenues.
We’re looking exclusively at Section 50.1 here, which is a deep dive into Hockey Related Revenues.
What are hockey related revenues?
They’re pretty broadly defined:
“Hockey Related Revenues” or “HRR” for each League Year means the operating revenues, including Barter (as defined below), from all sources, whether known or unknown, whether now in existence or created in the future, as expressly set forth in this Section 50.1(a), of each Club or the League, for or with respect to that League Year, as expressly set forth in this Section 50.1(a), on an accrual basis, derived or earned from, relating to or arising directly or indirectly out of the playing of NHL hockey games or NHL-related events in which current NHL Players participate or in which current NHL Players’ names and likenesses are used, by each such Club or the League, or attributable directly to the Club or the League from a Club Affiliated Entity or League Affiliated Entity, as expressly set forth herein, and is subject to any inclusions or exclusions as expressly set forth in the Article 50.
So, in short: revenues arising directly or indirectly from the playing of NHL hockey games or NHL-related events in which NHL players participate or names and/or likenesses are used (and attributable to the league or the member clubs).
So what counts under HRR?
The list is pretty long, and some of the items have rather complex calculations attached to them depending on if a team shares their home arena or not.
- NHL regular season and playoff gate receipts
- Pre-season games
- Special games (All-Star Game specifically mentioned)
- NHL national, international and national digital broadcasts
- NHL Networks
- Local cable television broadcasts
- Local over-the-air television broadcasts
- Local pay-per-view, satellite and other broadcasts
- Local radio broadcasts
- Club internet (revenue generated from operation of team websites)
- Publications
- In-arena novelty sales
- Non-arena novelty sales
- Concessions (during NHL games)
- Luxury boxes/suites
- Club/premium seats
- Fixed signage and arena sponsorships
- Temporary signage and club sponsorships
- Dasherboards
- Parking (during NHL games)
- International hockey games
- Other revenues: left open-ended, but mentioned are club and/or league-sponsored or branded events, sale of player-worn jerseys or equipment, among others.
For new types of revenue that emerge during the life of the CBA, the document allows things to be “read into” whatever category they’re most like.
For the curious, 65% of the arena sponsorship revenue for single-tenant buildings counts as HRR.
What’s not counted as HRR?
This list is much shorter.
- Revenues from the assignment (e.g., waiver fees) of any player contract
- Revenues from the sale or relocation of any club, or grant of any new franchise
- Revenues from the operation of teams (other than NHL teams) owned or controlled by NHL club or club-related entity
- Revenues from the sale of club personal property (e.g., non player-worn stuff)
- Proceeds from loans/financing
- Dues, loans, advances, cash calls, capital contributions received by NHL or related entities
- Amounts collected by the league for any disciplinary action
- Revenues paid by the league for Player Compensation Redistribution System
- Interest income; investment income; insurance recoveries; real estate proceeds
- Any thing of value received in connection with the design or construction of an arena
- “Any thing of value that induced or is intended to induce a Club either to locate or to relocate (e.g., amounts paid to enable a Club to buy-out its lease obligations or enable it to pay any relocation fee) or remain in a particular geographic location such that it will enable the Club or its Club Affiliated Entity to enhance categories or revenue streams constituting HRR, so long as such things of value or other revenues are not reimbursements for operating expenses of the Club”
- Escrow reimbursements
- Revenues from international projects other than international NHL games (e.g., World Cup of Hockey)
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