NHL Commissioner Gary Bettman on rising team valuations, league expansion and gambling

NHL team valuations rose 15% year-over-year to an average $2.2 billion in CNBC’s 2025 rankings, led by the Toronto Maple Leafs at $4.3 billion (Commissioner Gary Bettman said the Leafs would fetch more on the open market). Bettman cited a record $7.7 billion Canadian media-rights deal, recent transactions including the Arizona-to-Utah relocation at $1.2 billion and prior expansion fees (Vegas $500M, Seattle $650M), signaled future expansion would require ~ $2 billion entry fees, and noted league partnerships with Kalshi and Polymarket to manage prediction-market exposure.

Analysis

Market structure: Winners are franchise owners, rights-holding broadcasters (RCI/Rogers), and sports-betting vendors; losers are scarce — small-market franchises, over-levered arena financings, and legacy cable bundles that lose exclusivity. The $2B+ informal floor for expansion raises franchise pricing power and constrains supply (few teams available), implying >10% annual nominal appreciation potential in private market comps absent macro shocks.

Risk assessment: Key tail-risks are regulatory action on sports betting/prediction markets, a high-profile betting scandal, or a consumer recession that cuts gate/merchandise revenue. Timeline sensitivity: immediate (days) — sentiment/stock moves around media-rights headlines; short (weeks–months) — betting volume and ad revenue flows; long (quarters–years) — realized franchise M&A valuations and sponsor renewals. Hidden dependency: local TV carriage and arena economics (parking/F&B) drive real cash flow more than headline valuations.

Trade implications: Direct plays favor long Rogers (RCI) to capture the $7.7B Canadian rights monetization and long public betting winners (DraftKings/DKNG) to capture NHL betting volume; use defined-risk option structures (9–12 month call spreads) to lever upside while capping premium. Pair opportunity: long RCI vs short a legacy cable-centric broadcaster with high sports-rights exposure (size small, 1–2% net) to capture secular cord-cutting vs rights monetization divergence. Entry window: enter pre-next quarterly results (30–90 days) and scale out on outperformance or material regulatory headlines.

Contrarian angles: Consensus optimism may underprice downside — expansion-driven froth can reverse if multiples compress or a scandal hits betting platforms; historical parallel: regional-sports-network overspend post-2010 that led to write-offs once subscriber economics changed. Unintended consequence: rising franchise prices push more owners to leverage/monetize non-ticket revenue, increasing credit risk in owner-level debt and municipal arena bonds — avoid concentrated exposures there.

Key Decisions for Investors

• Establish a 2–3% long position in RCI (Rogers Communications, TSX/NYSE) within 30–90 days to capture media-rights monetization; target 12-month upside 15–25%, set a hard 10% stop-loss, and hedge with a 9–12 month 20–30% OTM call spread (sell higher strike to finance).
• Initiate a 1–2% long position in DKNG (DraftKings) to capture incremental NHL betting volume over 6–12 months; prefer buying a 6–9 month call spread (25% OTM buy / 50% OTM sell) to limit premium; trim/lock gains if DKNG rises >30% or if regulatory headlines intensify.
• Execute a pair trade: long RCI (1.5% weight) vs short 1.5% of a legacy cable-heavy broadcaster with weak sports carriage (size small, name-specific after due diligence); rebalance after Rogers’ next quarterly cash-flow print or on any public betting/regulatory shock.
• Avoid direct private-equity bids or fund commitments for NHL/expansion franchises unless acquisition price <= replacement-cost threshold (set internal cap at 12x current EBITDA or <$2B entry); this preserves optionality amid potential multiple compression and prevents overpaying in a frothy market.