The NHL’s final four shouldn’t be tainted by salary cap fear-mongering

Photo by Josh Lavallee/NHLI via Getty Images

Small markets are the future of hockey, not its downfall.

Then there were four. The Stanley Cup Playoffs are down to the last remaining teams, with the Eastern and Western Conference Finals starting on Thursday. It also leaves us with the four warmest climate teams in NHL history, with the Carolina Hurricanes and Raleigh’s six inches of average yearly snowfall being the most “winterly” team left — which is hilarious in its own right.

Carolina, Dallas, Florida, and Las Vegas absolutely earned their right to be here. Three of which were some of the best teams in the NHL in 2022-23, with Florida being the only real outlier, but absolutely proved their mettle in the playoffs by beating both the President’s Cup-winning Bruins and the Maple Leafs. Still, we’re back to the same, tired, squawking refrain from hockey “purists” that pops up every single time non-traditional markets see success in the sports. It’s even reached the point where the financial solvency of the league is being cited as justification why these teams shouldn’t be playing.

What Raycroft (the former Bruins’ goalie and current NESN analyst) is saying is technically correct, but also wildly dismissive of what these teams achieved. The driving force behind the playoffs should never, ever be about the salary cap or fiscal strength of the league. Doing so is short-sighted drivel designed to be eaten up by big-market teams who got bounced in the playoffs when they were expected to do far better.

Raycroft is pitching a softball directly to his Boston-based audience, and he knows it. It posits a failing Eastern Conference Finals as some sort of moral victory for the Bruins, imagining a far better world where Boston didn’t get out muscled and dominated by the Panthers in the opening round. It presents a cosmic shame to hurt hockey by having these teams left. A heaping helping of copium for fans dismayed that the Bruins let their legendary season crumble.

Myopic thinking like this isn’t just unfair to the players left competing for the Stanley Cup, but fails to see what an incredible opportunity this is.

Future growth and current success are inexorably linked

The point surrounding these 2022-23 playoffs is certainly true. The NHL’s system of assigning salary cap based on HHR (hockey related revenue) is certainly impacted by having smaller market teams left in the pool. Not only do smaller markets command less face value for ticket prices, but viewership could potentially suffer as a result of not having a major media market in the cup itself.

Here Raycroft argues that $100 tickets (the cheapest remaining in Raleigh for Panthers vs. Canes) is a horrible thing, when Boston would be commanding $1,000 for the same seats. The math here is questionable at best.

The average price of Bruins playoff tickets this postseason was $280 — not $1,000. Meanwhile the average price of Hurricanes tickets were $230, not $100. Currently the average price of tickets for the Eastern Conference Final in Raleigh is $285, according to available tickets. This represents a 20 percent increase in prices.

Boston is a voracious hockey market, so let’s assume for a second that tickets get a 60 PERCENT increase for the Bruins. This is extremely generous, but let’s math out what that means in a seven game series, all played in an 18,000 seat arena, with every game sold out.

Bruins $448 tickets: $56.4M
Hurricanes $35.9M

This is a difference of $20.5M. Certainly a large amount in isolation, but when applied to HRR it means each team would get $640,000 more from a big market team than a small one.

Raycroft appears to be conflating secondary market prices with primary market prices, when HRR only applies to initial ticket sales — not those from scalpers or resellers. While I have no doubt Bruins tickets would eventually reach $1,000 each, that doesn’t help the NHL.

What you have in Boston is a maxed out market. These are some of the most die-hard fans in all of hockey, in a huge market, which sells out every night at high prices. The same can be said for Montreal, Toronto, Detroit, and a small handful of other cities. The growth potential for this to push any higher is extremely low, because the market can only bear so much when it comes to pushing ticket prices higher. This bears out, because the Bruins raised their ticket prices on average $4 each in 2022-23.

Meanwhile, the Hurricanes have near infinite room for growth when it comes to average ticket price. The same can be said for the Panthers, Golden Knights, and Stars. This season Carolina increased their ticket prices by 3.9 percent on the year, with another 5-7 percent increase expected in 2023-24 due to their success. This will average out to an increase of $5.95 per ticket.

In total, hockey growth in smaller markets out-paces how much more of a ceiling teams have to move in larger ones. Seeing small market teams succeed might result in less HRR in the immediate future, only to have a mammoth rise on the back end.

With Carolina’s 2022-23 average attendance as a benchmark, expected ticket increases will net the league an additional, sustainable, $4.7M — rather than a quick-hit playoff run. It also means sustained financial success, vs. a cash cow based on performance. In short: The more markets in hockey succeed long-term, the better.

These four teams are paragons of making small market hockey work

It’s bizarre to single out small market teams, but even stranger to blame these teams specifically.

The Hurricanes averaged 19,526 attendance at home this season. Second only in the NHL to the Montreal Canadiens
The Panthers saw ticket sale growth of 12.6% in 2022-23, exceeding the league average of 7.9%
The Golden Knights led the NHL in sold seat capacity at 104%
The Stars are 4th in the west in average attendance at 18,371

These non-traditional markets have made mammoth inroads to cultivate rabid, albeit smaller fanbases. Now they get to start the practice that large market teams began decades ago of pushing their ticket prices higher until they see attendance dip.

With the exception of the Panthers (a team who is still growing its roots and have to compete for Florida’s attention with the Lightning) these teams are selling over 99% of the tickets on a daily basis. Demand is out-pacing supply, which means there’s room to grow revenue.

The long-term health of the NHL requires a rising tide THROUGHOUT hockey

This isn’t a difficult economic situation to grasp. Only six teams in the NHL had negative growth in 2022-23 (Blackhawks, Coyotes, Islanders, Golden Knights, Predators, Wild). Having 26 teams with modest growth inflates the HRR and salary cap far more than an incredibly lucrative, smaller league.

Of the 26 teams with growth, 16 of them came from media markets that rank outside the Top 10 in North America. Hockey is making huge inroads in smaller markets, and this is an amazing thing for the sport. Small market success makes for attractive opportunities for investors, increasing the potential for expansion teams, widening the league’s reach as a whole, raising the revenue and the salary cap in the process.

Sure, in the 2022-23 Stanley Cup Finals it might mean less revenue right now, but teams like the four remaining in the playoffs are helping to secure hockey’s future. That’s something to celebrate, not lament.