October 04, 2010
Sports Business Journal had an extensive look at the NHL's recent history on U.S. television and where the League will go in its next contract, as deals with both NBC and VERSUS are in their final seasons.
Talk about humble beginnings: John Shannon, former NHL VP of broadcasting, told SBJ that "nobody wanted the product" after the lockout; and that the NHL's deal with OLN (now VERSUS) in 2005 was "a pretty good deal. Was it a home run? No. Did it take them off the mainstream? I would argue the lockout did anyway."
The rules changes to open up the game, Crosby vs. Ovechkin, the ratings generated by compelling Stanley Cup Finals matchups and especially the Winter Classic have dramatically changed that TV landscape for the NHL, for the better. From SBJ:
Owners and team executives expect the new deal to dwarf those numbers. One owner told SportsBusiness Journal that he expects to see at least a 50 percent jump in TV rights fees. That would push the league's annual haul to more than $115 million and increase each team's take to $3.87 million a year.
The real question: Who's paying for those rights? NBC? VERSUS? ESPN? Fox Sports? Where will the NHL end up in its next TV contract?
Early signs suggest that a bidding war is developing. The league is expected to enter an exclusive negotiating period with Versus later this year, and Versus has made no secret of its desire to renew with the NHL, which consistently brings the highest ratings to the Comcast-owned sports channel. NBC also has said that it would like to keep its rights package.
But others are lurking. ESPN said it wants to be involved. And sources said Fox Sports is considering whether to bid on a package.
SBJ had a Turnkey survey of "more than 1,100 senior-level sports industry executives spanning professional and college sports," that asked the following question:
Again, keep in mind that there were multiple choices here; someone could have voted for VERSUS and ESPN. But it's interesting to see how many execs believe the NHL will remain on VERSUS in the next contract. Wonder what that would have looked like in 2007?
It sounds like the NHL might be in for a TV revenue windfall. Or, at least, a windfall in terms of the NHL's finances.
Currently, NHL teams receive around $2.5 million per season in TV revenue from the NHL's national deals. There have been estimates that the total will increase to just under $4 million per team per season if the rights fees increase by 50 percent.
It's not a cure all for NHL teams in need of financial stability. Not in the least. But hey, maybe it means a veteran third-line forward instead of a kid making the minimum within a team's budget.