It is hard to put a dollar figure on what the NHL will lose should it cancel the annual Winter Classic in the next couple of days – but that may be the least of the league’s woes.
Two marketing and communications experts believe the worst aspect of the outdoor game being axed because of the NHL lockout is the long-term damage from ruptured relationships with sponsors and fans.
Since this is the NHL’s second lockout in seven years, and the loss of the entire season for a second time is now a possibility given the stalled labour negotiations, there is a danger people from both groups will turn away and never come back.
“One of the bigger problems the NHL has with its sponsors is a lot of people remember the last lockout [2004-05] and if they go through another year like that, people won’t be as forgiving,” said Bob Stellick, the head of Stellick Marketing Communications Inc., a Toronto firm which handles marketing, communications and media relations for major corporations and sports groups.
“If there’s another year without hockey, they may ask, ‘Why am I a sponsor?’”
The 2013 Winter Classic is something special: Long-time Original Six rivals, the Detroit Red Wings and Toronto Maple Leafs, at the University of Michigan’s 115,000-seat stadium in Ann Arbor on Jan. 1. The anticipated sellout would set a world record for attendance at a hockey game.
Also in the mix is a two-week festival leading up to the game at Comerica Park in downtown Detroit, with two Wings-Leafs alumni games plus junior, U.S. college and high-school hockey events.
Since a great deal of preparation is required for the events, including building temporary rinks at the stadiums, the NHL would not practically be able to carry on with preparations and then cancel at the last minute because of the millions of dollars in costs and the logistics.
If the NHL cancels the game by Friday, it would forfeit only $100,000 (U.S.) of its $3-million rental fee to the University of Michigan.
Which why a decision to axe the game and winter festival is expected Thursday or Friday.
NHL deputy commissioner Bill Daly did not immediately respond to a request for comment Tuesday.
John Collins, the NHL’s chief operating officer who developed the Winter Classic into one of the biggest events on the league calendar (at least as far as the fans and sponsors in the United States are concerned), declined to be interviewed.
It is difficult to estimate the revenue the NHL will lose, as many of the event sponsors also have overall marketing deals with the league. Brian Cooper, the president of S&E Sponsorship Group, whose clients include corporations with NHL ties, told The Canadian Press he estimates there is about $3-million in corporate sponsorships directly related to the Winter Classic.
When ticket, merchandise and other sales are added, the league is looking at the loss of at least $15-million. While the host Red Wings get a share of that revenue, most goes into the NHL’s hockey-related revenue.
However, David Carter, the executive director of the University of Southern California’s Sports Business Institute, agrees with Stellick when it comes to the real damage.
“[Sponsors] are about using the backdrop of sports to sell products – and controversies, to include a sport going dark, drive them crazy,” Carter said in an e-mail. “They have other avenues to reach consumers and you can bet they are determining how best to retrench.
The NHL has been trying to become a mainstream sport with the U.S. public for decades, wooing the casual fan with varying degrees of success. The Winter Classic is a hit in the U.S., and practically equal with the Stanley Cup final in the eyes of casual fans (even though technically it is just another regular-season game). Carter thinks the NHL is playing with fire here as well.
“By cancelling the game, both hard-core and casual fans will revisit their interest and future spending on the game,” he said. “This, in turn, affects the rest of the industry because the more disenfranchised fans become the longer it will take for the NHL to rebuild its fan bases.”
However, a person who was once intimately involved with NHL finances and played a large role in the 2008 Winter Classic in Buffalo thinks the league will be able to soothe its sponsors.
Larry Quinn, the former managing partner and minority owner of the Buffalo Sabres said the NHL spent a lot of time preparing its sponsors for a potential cancellation.
“I’m sure everyone’s frustration level is high, but I’m also sure the league made them understand the parameters,” Quinn said. “Any sponsor committed to the kind of dollars involved was certainly well aware and probably briefed by the NHL.
“My gut tells me they’ll hang on to their sponsors.”