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How NHL lockout is hurting key sponsors, during holidays and in the future

Greg Wyshynski
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There haven't been many effective pressure points during the NHL lockout. The start of the season, the Winter Classic, the All-Star Game and the start of the NBC television schedule in the U.S. have all been sacrificed in 2012. Players are relatively happy skating and collecting pay checks in Europe. Owners don't seem to have a sense of urgency either.

But one gear in the NHL's financial machine has been mighty squeaky lately: Sponsors and marketing partners.

Molson Coors was one of the most prominent sponsors to lament the lockout, with its CEO declaring that there will be reparations for the damage done to the brewer's sales sans hockey this year.

On Monday, Sports Business Daily delivered a combination punch to the League regarding its sponsors.

Terry Lefton had a piece on the NHL's licensees losing out on holiday sales due to the lockout (reg. required):

"Our NHL business is off substantially," said Mitchell Modell, CEO of the 150-store sporting goods chain which bears his family name. "The dollars are small relatively, but the percentages are big. Thank God for the NBA, because it came back strong last year [after that league's lockout] and they are more than offsetting our NHL sales."

Last spring's strong NHL playoffs resulted in impressive sales for NHL-licensed products, especially notable since the Boston Bruins' 2011 Stanley Cup Championship was such a bellwether for the league. Accordingly, year-to-year sales of NHL merchandise for licensed sports ecommerce specialist Fanatics.com increased 14 percent from January into this month. However, sales of those same goods from July through last week on Fanatics.com showed a 14 percent decrease. Fanatics operates ecommerce for the league, but those totals do not include sales on NHL.com.

Or lack thereof.

So the holidays are bleak for the NHL's marketing partners; what about the future?

Terry Lefton and Christopher Botta wrote a piece that looked at how the lockout might affect future relationships between the NHL and its sponsors. From SBD, a key passage regarding NHL COO John Collins, who has been a driving force in securing high profile sponsors and expanding the League's revenue opportunities:

"We shut down for a full season and it took us two years to get back to where we were," said Andrew Judelson, who was senior vice president of sales and marketing at the NHL for eight years, including the canceled 2004-05 season, and is now an executive vice president for WWE. "There was a year of selling and then a year of getting those partners up to speed and activating. The unfortunate thing is that the league had so much momentum over the past several years, and now you wonder how much of that momentum has been extinguished. … The good news is social and digital media allow your sponsors to activate and plan to activate much more quickly and in the U.S., most of the NHL partner activation is during the Stanley Cup playoffs, so that is still very possible."

Genesco Sports Enterprises CEO John Tatum, whose clients include league sponsors MillerCoors and Pepsi, also gave Collins and the NHL points for communication. Still, Tatum backed Judelson's assertion that signing new corporate sponsors will be the league's biggest challenge whenever the labor standoff ends.

"New sponsors are going to be the slowest thing to get back," said Tatum. "They had so much momentum with last season's playoffs and all the postseason games on national TV for the first time [on NBC and NBC Sports Network]. Fans will come back, but you have to reclaim some portion of their media consumption, because that has changed. I'm also concerned about the franchises that were struggling before the lockout."

(But the lockout will fix those teams, silly! Why else have a lockout?)

It's naïve to believe that the NHL didn't communicate the potential for another cancelled season with its key sponsors, although perhaps the League didn't paint as dire a picture as it might have for, say, the Players' Association.

Things have gotten rather dire, however.

This lockout has effectively killed the momentum the NHL has built up, and it'll likely take another 18 months to recapture it. (Following through with the Toronto vs. Detroit Winter Classic festivities, with distance from the lockout, would be an essential way to help recapture it.)

The longer this goes, the more uncertainty there is about the impact on sponsors, sales and, above all else, the consumers.

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