In the current NHL labour squabble, the players are concerned how the league can push its revenues so they don’t lose money under the proposed 50/50 sharing scheme (versus the current 57 per cent the players take in).
One revenue number they know is stable: the 10-year, $2-billion (U.S.) deal the NHL signed last year with NBC for its national U.S. rights. Because of the PVR revolution, live TV sports are now the straw that stirs the broadcast business cocktail.
As such, there was debate about the NBC contract when it was announced. Had commissioner Gary Bettman scored a coup or had he sold off the rights for too long?
Compared to the NBC contract that preceded it – a revenue-sharing deal with no upfront money that made nearly nothing for the NHL – the current deal is impressive, guaranteeing the league $200-million a year to have its games on NBC and NBC Sports Network (NBCSN).
Critics, however, took issue with the extended term of the contract, saying the NHL has no idea of what the technological landscape will look like in a decade. Who in 2002 foresaw the technological innovations of PVR, social media, tablets and smartphones that shape the industry in 2012? That $200-million a year might look like chump change in five years, let alone in 10, if the tech revolution keeps making pro sports richer.
In its defence, the NHL points out it needed stability with a U.S. broadcaster after so many decades of bouncing like a lottery ball from network to network. Once play resumes, NBC has a decade to help grow the sport and, goes the thinking, increase hockey’s footprint on American TV.
That needs TLC. The proof of the NHL’s failure to exploit TV over the decades is reflected in the revenue discrepancy between it and the other major pro sports. Forget the NFL and Major League Baseball, who get billions for their rights; the NHL’s take-home is still dwarfed by the NBA’s $930-million a year. It’s also puny next to the fees being paid for NCAA football.
Before Bettman, then-NHL president John Ziegler had the league rights hopping from networks such as ESPN to fly-by-nights such as SportsChannel America. Bettman has continued the hopscotch pattern since taking over in 1993, as the NHL has gone from NBC to ABC to FOX, back to ABC and then back to NBC following the 2004-05 lockout.
On the cable side, when ESPN balked at paying full price for the NHL coming out of that lockout, the league bounced to OLN. OLN changed names to Versus and now NBCSN.
All this volatility did nothing for the NHL’s reputation with viewers, networks and sponsors. But the hiring of John Collins as NHL chief operating officer has stabilized the league’s image. The advent of the Winter Classic and the all-star game draft, and popularizing the NHL entry draft were steps in that direction.
Now, much of that is jeopardized by the current lockout.
If another full season is lost, it will set back the NHL’s corporate and broadcast reputation to the 1980s.
North of the border
Canadian broadcasters are privately smarting over the NHL’s labour gamble. With a new national contract due in the fall of 2014, however, most are keeping their feelings to themselves, lest they anger the commissioner with a little candour.
At CBC, some are quietly rooting for cancellation of the 2012-13 season so they can get an extra season added to their current contract, thereby delaying a decision of how much money they can afford to bid when the $100-million a year deal ends.
In addition, a delay in NHL rights payments would allow CBC to enter a more robust bid for CFL TV rights, should they come up this March.
Industry insiders tell Usual Suspects the entire CFL TV negotiations for a new contract in the 2013 season might take very different look if the NHL’s TV contract is set back a year.
Commissioner Mark Cohon is watching carefully, perhaps cheering that he has the floor open to his league in the next few months.