Why the richest NHL teams should share some costs with the smallest revenue teams

Much has been made about high-revenue owners sharing revenue with some of the financially challenged franchises.  My take is that the economic subsidies should not be revenue-based, but instead be cost based.

Smaller revenue teams certainly make disproportionately more money when big market teams like the Rangers, Bruins, Canadiens and Blackhawks come to town.  Also national TV revenue is split up proportionately across all teams even though small market teams typically aren’t featured as often.

As well, home teams keep all the ticket sales, thus the away games teams are for the most part money losing trips by small market teams.  These away teams are technically subsidizing the larger market teams (from an activity-based financial perspective).  Large market teams still make money from away games since they tend to have large television revenue from those games too.  If large market home team’s just covered the cost of the opposing team’s players, then this could be an equitable solution based on economic principles.

Looking at the numbers, it isn’t such a huge amount of money, but a couple of million dollars in cost savings for some of these smaller market teams would certainly help their cause.

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