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June 3, 2014 | 11:37am ET
Numbers Don't Lie; NHL cashing in on Cup
By Michael Grossi, Features Editor
TheFourthPeriod.com

TORONTO, ON -- When the Los Angeles Kings, appearing in their third consecutive Western Conference Final, faced the defending Stanley Cup Champion Chicago Blackhawks, themselves appearing in their fourth Western Conference Final in the last six years, fans around the world were treated to a match-up of two of the NHL's most consistently competitive teams.

The NHL, as a business, was also in for a treat, as the matchup represented the second and third largest markets in the United States, a dream scenario for a league that routinely watches the network ratings with bated breath.

With Game 7 of the Western Conference Final delivering the NHL's best ratings since signing a deal with NBC, the potential of a ratings monster of a Stanley Cup Final has become very real.

In a match-up that, allegedly, put both Biggie and Tupac in their graves, we are now left with an East Coast-West Coast battle.

Unlike Los Angeles' last trip to the Final in 2012, where the average rating for the series was a terrible 1.8, the Kings are going up against the Rangers -- not their adopted little brother and much weaker draw, the New Jersey Devils.

While other factors are obviously involved, the chart and graph below show the relationship between the Average Market Rank of teams that appear in the Stanley Cup Finals and how that rank affects the average Nielsen Ratings.

The success of small markets, especially Canadian ones, following the 2005 lockout, combined with a shift to Versus and the lockout itself putting off many hockey fans, severely hurt NHL television ratings.

In recent years, however, the NHL has recovered well with strong representation from large, hockey-mad markets.

Year Nielsen Rating (Cup Final) Stanley Cup Winner Market Rank of Cup Winner Stanley Cup Runner-Up Market Rank of Cup Runner-Up Avg. Market Rank of Teams in Final
2006 1.8 Carolina Hurricanes 28 Edmonton Oilers 27 27.5
2007 1.2 Anaheim Ducks 18 Ottawa Senators 25 21.5
2008 2.6 Detroit Red Wings 13 Pittsburgh Penguins 21 17
2009 3.1 Pittsburgh Penguins 21 Detroit Red Wings 13 17
2010 3.4 Chicago Blackhawks 3 Philadelphia Flyers 7 5
2011 2.7 Boston Bruins 12 Vancouver Canucks 22 12
2012 1.8 Los Angeles Kings 2 New Jersey Devils 28 15
2013 3.3 Chicago Blackhawks 3 Boston Bruins 11 7
(Nielsen Averages from Sports Business Daily)

Based on this line of best fit being true, the NHL is looking at the possibility of taking in a 3.64 rating nationally, and that is simply based on market rank and not a weighted average where the actual size of markets would play a larger role in determining the final Nielsen rating.

(With New York City and Los Angeles combined make up over eight per cent of the United States' total population 3.64 could prove to be a very low estimate.)

That 3.64 would by far surpass the 3.4 put up during the 2010 Stanley Cup Final that featured Chicago and Philadelphia, the NHL's third and seventh biggest markets, respectively.

Perhaps more important for the strength of the NHL is how a franchise's value changes following a trip to the Stanley Cup Final.

Year Team Value Rank % Change Avg. % Change that Year
+2006 Carolina
Hurricanes
21 44 13.6
+2006 Edmonton
Oilers
19 40 13.6
2007 Anaheim
Ducks
12 25 11.06
2007 Ottawa
Senators
14 17 11.06
2008 Detroit
Red Wings
4 3 9.833
2008 Pittsburgh
Penguins
18 26 9.833
2009 Pittsburgh
Penguins
11 14 1.266
2009 Detroit
Red Wings
4 11 1.266
2010 Chicago
Blackhawks
7 16 1.166
2010 Philadelphia
Flyers
6 10 1.166
2011 Boston
Bruins
5 8 5.066
2011 Vancouver
Canucks
7 15 5.066
2012 Los Angeles
Kings
10 19 18
2012 New Jersey
Devils
19 13 18
+2013 Chicago
Blackhawks
5 79 46
+2013 Boston
Bruins
6 72 46
Average     25.75 13.25
+ represents season following a lockout.
(All franchise value information from Forbes)

According to this information, the average team in the Stanley Cup Final sees their franchise value increase at a rate of double the league average that season.

Seasons 2006 and 2013 were both coming out of a lockout and the more owner-friendly CBAs can be looked at as the reason we see such large increases in franchise valuations.

To gain an increase of say 14 per cent, the average increase in value of teams appearing in the Cup Final during non-lockout years since 2006, the Rangers would see their value rise from $850 million to $969 million, just shy of joining the Toronto Maple Leafs as the NHL's only billion dollar franchises.

The Kings, the NHL's 10th most valuable franchise, according to Forbes, would see their value rise from $450 million to $513 million. While it is understood that Forbes' numbers are educated guesses, at best, they provide the best educated guess that we have.

The 2014 season has proven to continue the roll of good business for the NHL. As television ratings and team valuations continue to rise, the lockout that kept teams off the ice for much of the 2013 season is looking to have been worth it for long run league success.

Now, that's enough business talk. Enjoy the series.

Michael Grossi is the Features Editor for The Fourth Period.


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