The NHL has borrowed $1 billion to help teams that are financially struggling from the COVID-19 pandemic, according to a report by Mark J. Burns and Chris Smith of the Chicago Business Journal.
The new debt comes from the private placement market where teams can address any issues involving “cash-flow issues, payroll costs, and other operational expenses.” Each of the league’s 31 teams are expected to receive approximately $30 million.
After the pandemic halted and effectively ended the remainder of the 2019-20 regular-season schedule, the NHL’s four-month hiatus brought on sizable financial losses as they worked their way back into the Toronto and Edmonton bubbles to hold the Stanley Cup Playoffs.
The Tampa Bay Lightning hoisted the Stanley Cup at season’s end on Sept. 28, three months after a normal NHL season concludes, forcing the league to push back the start of the 2020-21 season in the process.
Questionable negotiations and squabbling over money didn’t help the prospects of returning in a timely manner as hockey returned on Jan. 13, nearly three weeks after the NBA started its campaign.
A 56-game shortened schedule without fans in attendance once again had the NHL projecting massive losses in the realm of billions of dollars due to the lost revenue that comes from television deals for 26 more games under normal circumstances, ticket sales, parking, and concessions and merchandise sales at the arena.
NHL commissioner Gary Bettman alluded to such a move before the season began.
“We have made some financial arrangements that make sure our cash flow is what it needs to be, although that’s not found money, that’s debt,” he said. “Our clubs, our owners are having to write checks and so while there’s an economic consequence to playing a season, all of our owners and our clubs are in a position to weather it.”
This after Bettman admitted that it would “be cheaper for us to shut the doors and not play.”
Only two teams currently are allowing fans into their arenas amid another COVID spike. Both the Arizona Coyotes and Florida Panthers are filling their arenas at 25% capacity. Both the Dallas Stars and Nashville Predators are also planning to allow fans into the rink shortly.