What does the PWHL need to be a successful hockey business? More Canada

Open this photo in gallery:

A pro sports team in one of the Big Four leagues is like the Bank of Canada: a licence to print money.

It’s why, when the Seattle Kraken’s owners were awarded a National Hockey League team in 2018, they forked over an expansion fee of US$650-million. When you have a printing press that spits out currency, people pay for a piece of the action.

This season, the NHL expects league-wide revenues of US$6.2-billion. But it wasn’t always so. The NHL spent decades as a struggling cottage industry.

Which brings me to the Professional Women’s Hockey League. Look at it, and marvel. Right out of the gate, it has repeatedly broken records for the most fans at a women’s pro hockey game. And it’s about to do it again, with the Feb. 16 match between Montreal and Toronto at the 18,800-seat Scotiabank Arena reported to be a sellout.

The PWHL is only five weeks into its first season. It’s so new the teams don’t have names.

What’s known about the league’s finances shows where it’s succeeding – and less visible beneath the hype, where it’s struggling.

What emerges is a roadmap to PWHL success: follow the fans and follow the money. Put teams where hockey is popular. Like, you know, Canada.

The league is owned by Mark Walter, chief executive of Guggenheim Partners, a U.S.-based financial services firm with more than US$300-billion under management. Mr. Walter is also a part owner of the Los Angeles Dodgers and Chelsea F.C. of soccer’s English Premier League. He offers what previous attempts at a women’s pro circuit lacked: money and time.

You can learn a lot about the PWHL’s business model by looking at the NHL.

The NHL was long a six-team league, with all clubs in traditional hockey markets. The southernmost was New York City.

The PWHL launched as a six-team league. Three teams are Canadian. The southernmost American team is in New York City.

The NHL has revenue sharing, with money from a rich Canadian TV contract flowing to teams in the U.S., and teams with the highest ticket hauls (hello, Toronto Maple Leafs and Montreal Canadiens) supporting U.S. franchises such as the financially comatose Arizona Coyotes.

Thanks to common ownership, revenue sharing is also baked into the PWHL.

The NHL keeps expenses in check with a salary cap; same for the PWHL. The average player salary per the collective bargaining agreement is US$55,000, plus benefits such as health insurance, a housing allowance and a travel per diem of US$81.

That’s not bad for Year One, especially given the last failed try at a women’s pro circuit had most players earning a league minimum of US$10,000. In the AHL, the top level of men’s hockey below the NHL, minimum salary is US$52,725 – and that’s for a season of up to 80 games, compared to 24 this year and 30 to 32 next year in the PWHL.

Final similarity: The NHL, unlike the NBA or NFL, is a league where revenue mostly comes from attendance, not television. The business is backsides in seats. Ditto the PWHL.

Eyeballing the attendance figures shows where the PWHL is filling seats, and where it isn’t. Attendance varies greatly by city.

The Ottawa team plays at TD Place Arena, with a listed capacity of 9,274. Average attendance is 6,703 through five games. That’s better than many AHL teams.

Montreal had average attendance of 3,239 in two games at the 4,000-seat Verdun Auditorium, and an average of 7,490 fans in two games at the 10,000-seat Place Bell.

The Toronto team plays mostly at Mattamy Athletic Centre, whose capacity is just 2,740. But remaining games there are already sold out, as is the Feb. 16 game at Scotiabank Arena. PWHL Toronto is going to need a bigger barn.

The teams in Minnesota and suburban Boston are putting up respectable numbers. But New York City is struggling. Its home arena was in Bridgeport, Conn., 100 kilometres from Manhattan. The arena seats 8,400. Home opener attendance: 2,152.

For the team’s second game, the league hoped for a big splash with a marquee performance at UBS Arena, home of the New York Islanders. It’s a 17,000-seat facility. Attendance was reported as only 2,201, and you have to wonder how many were freebies.

The cost of players, coaches, management and other overhead likely puts the PWHL’s expenses north of US$20-million a year – and that’s before the not-inconsiderable cost of renting an arena. Selling 5,000 tickets per game, per team, over 16 home games, and netting, say, US$40 per ticket, would likely get a team to break even or better.

That’s why breaking even could be a struggle in much of the U.S. Which is why the league should think about more Canada.

Think London, Ont., where the London Knights have the highest attendance in Ontario Hockey League, and regularly sell out the 9,000-seat Budweiser Gardens. Think Kitchener-Waterloo, where the OHL’s Kitchener Rangers last season posted average attendance just shy of their rink’s capacity of 7,000.

Think Halifax. It has a 10,000-seat arena, no AHL team, and the Quebec Major Junior Hockey League’s Mooseheads have the league’s second-highest attendance.

And think Quebec City – with its underused NHL-sized arena, and fans so desperate for hockey that its junior team last year led the nation with nearly 10,000 tickets sold per game.

The NHL has grown big enough that Canada is now never more than a backup plan. The PWHL, like the NHL of old, had no choice but to take this country as a starting point. Half its teams are here, and I bet they’ll account for well over half of first-year revenues. That’s why the PWHL is going to survive, and maybe even thrive.