Golden Knights, NHL prepare for 3rd COVID-impacted season

At one point, the Golden Knights resorted to using a whiteboard to do the math.

If they were allowed to have pods of two or four fans at games but needed them to be socially distanced, how many could they fit within T-Mobile Arena’s 17,000-plus seats? And how would that shift as capacity limits, government regulations and COVID-19 conditions changed during the 2021 NHL season?

One Knights ticket representative devised an algebraic formula on a whiteboard at the team’s offices at City National Arena to help figure it out because it was a problem that needed solving over and over. The variables were always changing during the condensed schedule, which for the Knights contained a 10-day COVID-19 pause, 11 home games without fans, 21 with limited crowds and six at full capacity.

The team and the rest of the NHL hope the equations are simpler this season. But there are still a lot of variables as the league prepares for its third pandemic-impacted season in 2021-22, about 18 months after it shut down March 12, 2020.

“The unknown is challenging,” Knights president Kerry Bubolz said. “It’s easier to manage the circumstance where you know where you’re trying to get to. This one’s had a lot of twists and turns along the way. … It certainly will be an impact, but hopefully it won’t be an impact like what it was last season or even the previous year, which was still significant.”

Crowd questions

The NHL took dramatic measures to combat COVID-19 the past two seasons.

The 2020 postseason was played at two Canadian bubbles. Last year’s condensed schedule featured strict protocols that largely prevented players from stepping outside their homes and the rink, and the league still had to postpone 57 regular-season games.

Restrictions will be looser this season for fully vaccinated players. That means 98 percent of the NHL — all but 10 to 15 players — according to deputy commissioner Bill Daly, who spoke Thursday at the NHL/NHL Players Association media tour in Chicago.

A larger question will be what the rules are for fans. They weren’t allowed in the bubbles. They weren’t allowed into eight buildings in the 2021 season — Buffalo, Detroit and every Canadian market except Montreal. Only the Knights reached full capacity, and Boston, the New York Islanders and Tampa Bay got close.

There’s optimism attendance will creep much closer to normal this season, but there are still many questions. The answers are key, because commissioner Gary Bettman has said about 50 percent of the NHL’s revenue is gate-driven.

The chief concerns surround COVID-19’s more contagious delta variant and how it will affect consumer and team behavior. Dr. Patrick Rishe, the director of the sports business program at the University of Washington in St. Louis, said the pandemic will force clubs to make difficult decisions as they weigh maximizing safety against revenues.

Requiring proof of COVID-19 vaccination, for example, is a step in the name of safety, but could drive some potential customers away from the box office.

The Knights currently do not require proof of vaccination or a negative COVID-19 test to attend a game at T-Mobile Arena. Some teams will require fans to have at least one, including Buffalo, Chicago, Seattle, St. Louis and all seven Canadian teams.

“All of these things are going to again make it very difficult for these team presidents who on the business side have to make decisions about what’s the best way to move forward to balance these goals of maximizing revenue at the facility while at the same time making people feel safe, making people feel comfortable,” Rishe said. “It’s not an easy position to be in.”

Financial impact

Part of the reason safety questions are so important is because the NHL can’t risk the pandemic going backward.

The league already took a huge hit to its bottom line with no fans for the 2020 playoffs and limited, at best, crowds last season. It will take it years to make up for that lost revenue.

“We can manage wearing masks and all the things that we’re all kind of talking about with vaccines, et cetera and testing,” Bubolz said. “But it’s when capacity starts to be impacted, (that’s) when you start to see the impact on the revenues.”

The Knights’ revenues are expected to return to their pre-pandemic levels if they can have full capacity all season, Bubolz said. Owner Bill Foley told the Review-Journal in March that’s about $2 million a game.

It remains to be seen if every team will have as rosy of a projection and, if not, what it would do to the long-term financial outlook of the league. The NHL has had a flat salary cap the past two seasons, and any increase will be minor for the foreseeable future.

Daly did tell Sportsnet on Thursday that the cap is expected to go up by $1 million in 2022-23. That, per the terms of the league and players association’s 2020 collective bargaining agreement extension, means hockey-related revenues are expected to surpass $4.8 billion this season.

That figure puts the NHL in the ballpark of its 2019-20 revenue — $4.4 billion, a $5.05 billion pace for 82 games, according to Forbes — because of new national TV deals with ESPN and Turner Sports and a 32nd franchise in Seattle.

Any salary cap increase larger than $1 million won’t happen for a while. The players, who were given their full salaries during the 2021 season despite the limited fans, need to make the owners whole in the form of escrow payments since the sides are supposed to split the league’s hockey-related revenue 50-50.

Chris Moynes, the managing director of ONE Sports + Entertainment Group, which helps many NHL players manage their finances, said that probably won’t happen for years.

“I still think it’s going to take some time,” Moynes said. “I still think it could potentially be to the 2024-25 season before we see normal growth or salary growth or cap-space growth. (The near-flat cap) might be kind of what we’re looking at the next couple years.”

Adapt and change

Attendance and finances are two major things the NHL could use more certainty on.

The league also faces smaller but not insignificant questions about how the pandemic will change the way it does business for good.

COVID-19 forced the NHL to get creative to find new partners and ways of bringing in money. Teams sold helmet advertisements, broadcasts featured digital advertisements and divisions had sponsors in 2021. Bettman said that helped teams retain $100 million in revenue.

The digital and helmet ads are expected to stay, and the league will continue to get creative in future years. Teams can start wearing sponsored jersey patches for the 2022-23 season, and the Knights have already had discussions about it.

“We didn’t get much pushback,” Bettman said of the 2021 innovations. “I think it didn’t turn out to be a distraction. All the fan feedback and research we’ve gotten and done said this isn’t a problem for us, so we’re comfortable with the steps that we took during the season.”

Changes will happen at the club level, too.

Bubolz said dealing with capacity restrictions helped the Knights learn a lot about their food and beverage service, their ticket policies and how people enter, exit and move about T-Mobile Arena. More than anything else, the team learned their fans can adapt to different rules if it means being able to attend games.

“Did I like the fact that we had a no bag policy?” Bubolz said. “No, I didn’t like that. But people adapted, and we were able to manage through that. … Through those learnings, I think we’ll be a better, more efficient, better from a customer-service perspective venue as we go forward with everything.”

A new season

There is still belief as the season nears that these questions will prove easier to solve than the ones teams faced in the past 18 months. That these won’t require a whiteboard to figure out.

That would be welcome news for clubs, because Bubolz said “if there’s a sports executive that’s out there that dealt with an obstacle that’s more difficult than this, I would be surprised.”

The past 18 months have featured heartbreak, frustration and joy. There have been countless sacrifices mixed in with victories large and small.

One of the bigger ones for Bubolz came when the team welcomed back an announced crowd of 2,605 against the Minnesota Wild on March 1. It was the first time fans were back at T-Mobile Arena since March 3, 2020.

It was a sign that things were getting back to normal, and the Knights don’t plan on looking back.

“That was maybe the most emotional moment I’ve had since I’ve been here other than October 1st, because at that point it had literally been an entire year since we’d had fans for a game,” Bubolz said. “That was a special day because of all our hard work to get to that point.”

Contact Ben Gotz at bgotz@reviewjournal.com. Follow @BenSGotz on Twitter.