NHL Faces Complex Decision With Next US Television Deal

For the National Hockey League, any chance to gain revenue must be handled very carefully.

As the least profitable member of the four major North American Sports leagues, the NHL has to be opportunistic and intentional when handed chances to economically develop. This has become an even more urgent reality in the era of the coronavirus, which has left the league with millions of dollars of debt. Teams are struggling to make ends meet without gate revenue. The league has (wisely) increased its acceptance of advertising as a result, with brands creeping onto helmets, center ice, division titles, the glass, and seemingly anything else they can print a logo on.

All of this to say, the expiration of the league’s 10-year, $2 billion contract with NBC is coming at the end of this season. NBC currently has an exclusive right to broadcast the NHL in the United States. Since the signing of their deal, the NHL has had to watch other sports leagues sign monstrous contracts with television providers, thus leading to massive increases in their revenue. Now, it’s the NHL’s turn to benefit from those increases. But it will not be easy.

Tampa Bay Lightning 2020 Stanley Cup
NHL commissioner Gary Bettman presents the Tampa Bay Lightning with the Stanley Cup following their series-winning victory over the Dallas Stars in Game Six of the 2020 NHL Stanley Cup Final at Rogers Place on September 28, 2020 in Edmonton, Alberta, Canada. (Photo by Bruce Bennett/Getty Images)

A year ago, this new deal seemed like an obvious win for the NHL. But, while they are still due for a large pay raise, the fall of cable and the rise of COVID-19 has greatly changed what the TV landscape looks like. There are now a lot more questions everyone involved must consider.

Will US networks still want to shell out billions of dollars to a struggling league as they battle their own strife? If the league does sign exclusively with a cable-based network, will they see the growth they’ve achieved in the last decade begin to fade away as more households cut their cords? Will the NHL sign a deal that seems good in the short-term, but that will see them further in the dust of other sports in the long run?

There is no shortage of options for Commissioner Gary Bettman and the rest of hockey leadership to consider. They’ve largely put negotiations on hold for the time being, but will soon have to sort through a bevy of different options. NBC, ESPN, and Fox have already expressed large interest in the league’s favor, and there is sure to be more offers as the expiration date comes closer. Who has the best case to be the next partner (or partners) of the NHL?

NBC

The option the NHL might be most inclined to take is to stay solely with NBC. There is something to be said for loyalty, and after a decade and a half working together, the two may be comfortable forging ahead together. NBC has done a substantial amount to help grow hockey in the United States, with programs such as Kraft Hockeyville and Hockey Week in America forming under their direction.

They’ve also been responsible for the development of outdoor games, from the first Winter Classic in 2008 to the two games being played at Lake Tahoe on Feb. 20 and 21. Game 7 of the 2019 Stanley Cup Final was the most-watched NHL game ever in the US, averaging a Total Audience Delivery (TAD) of almost 9 million viewers (8.914). Overall, the 2019 Playoffs were the most watched since 1996 and a testament to the growth that the NHL and NBC have accomplished during their partnership.

The Detroit Red Wings and Toronto Maple Leafs clashed in the 2014 Winter Classic, at Michigan University’s “Big House”. (Tom Turk/The Hockey Writers)

It’s not all sunshine and roses for the pair, unfortunately. Most NHL games are aired on the soon-to-be-defunct NBC Sports Network, which has access to only 80 million households in the US. While NBC is planning to move its NBCSN content to USA Network, which broadcasts to 87 million homes, it is worth considering if hockey would have more exposure through other outlets.

The 2020 Playoffs, like many sports functions in the last year, struggled mightily with viewership. Game 6 between the Dallas Stars and the Tampa Bay Lightning averaged only 2.88 million viewers, only a third of the number watching the previous year. While much of that can be blamed on the sheer weight that people have to carry living through a pandemic, some of it can be blamed on viewership stolen by other sports playing on other channels. Even in 2019, the most-viewed Final in years was dwarfed by the average of 20 million people who watched the NBA Finals, the nearly 14 million who watched the World Series, and the 100 million who tuned in for the Super Bowl.

The NHL has to fight to not play second fiddle to other leagues, and has to decide if using NBC is holding them back from potential exposure that would help them expand. There are other suitors to talk to, after all.

ESPN/ABC

The self-proclaimed worldwide leader in sports and it’s parent company, ABC, have expressed interest in hosting NHL content. They currently air a select number of games on ESPN+, and have the resources to challenge NBC’s claims to the league.

Despite some struggles of late, ESPN is still considered the “mainstream” of sports entertainment. Average viewers are more inclined to turn on ESPN before NBCSN, meaning the NHL could potentially gain more casual viewership. The network and the league drifted apart during the 2005 lockout, at the conclusion of what was considered the “dead-puck era.” Now that the NHL is trying to evolve back into a league that exhibits skill and action, there’s reason to believe they have a new generation of sports fans to draw in. They just have to get in front of that audience.

ESPN has NBA, MLB, and NFL content regularly on their network channel. They have talkshows that bicker about those leagues all the time. It doesn’t take a hockey aficionado to notice that the NHL falls by the wayside. A potential partnership would be a boon for the exposure the league could gain from coverage like that. And it would stop quotes like this from surfacing from time to time:

Love you too, Max

But it’s important to remember that ESPN would not be a utopia, either. The network has suffered over the last decade, falling from its heights along with other members of traditional television. Not just because of COVID-19, either — according to NextLevel Finance, the sports hub has gone from 99 million subscribers in 2013 to just 83 million in 2019. That’s less than USA Network, and has likely only gotten worse during a turmoil-filled 2020.

They’ve had to release hundreds of employees, including some top personalities. Even as ESPN+ continues to grow, the future of the network is shakier than it’s ever been. It will be interesting to see how the NHL evaluates ESPN’s position, and whether they think joining them would be a good investment. With COVID-19 clouding statistics, it will not be an easy decision.

FOX

At the beginning of February, it was reported that Fox intends to be a major challenger to NBC for the NHL’s favor. Fox, since selling some of its assets to the Disney corporation, has begun to rely more on its sports programming. They are expected to put in a large bid for the NHL’s rights, with the understanding that NBC can match any offer that may be tendered.

Connor McDavid Edmonton Oilers
Wherever the NHL ends up, it needs to do a better job at marketing talented players like Connor McDavid (Jess Starr/The Hockey Writers)

Fox Sports 1 hosted around 80 million subscribers mid-2020, similar numbers to the NHL’s current hosts. But if the offer they give to the league, is substantial enough, there’s potential the dollar signs would be persuasive enough to land the deal. Fox may be a worse long-term option for the NHL than the bigger ESPN or more familiar NBC, but in the short-term, the league needs cash. Money talks.

Other Suitors

CBS could also be an option for the league. They have their own sports network, as well as an impending streaming service they might be willing to give up a lot of funds for in order to gain more content. At this juncture, they have not made as much noise as some of the other major providers.

Perhaps the NHL should use this change in contracts as a chance to try and anticipate the future market. As cable continues to suffer and its channels try to transition onto an online format, some potential partners for the league are already there.

NHL Seattle franchise announcement
The Seattle Kraken are set to begin play in Climate Pledge Arena during their inaugural season later this year. (Photo by Patrick McDermott/NHLI via Getty Images)

Amazon has recently snuck into the NHL-sphere, buying the naming rights to Seattle’s freshly constructed arena (which they subsequently titled Climate Pledge Arena). The online shopping titan has only gotten stronger through the pandemic, meaning they have plenty of funds to bring on content to their streaming service, Amazon Prime. In October of 2020, the platform had 126 million subscribers, a 14 million increase despite the damage COVID-19 inflicted on so many others. Through Amazon, the NHL would have exposure to its biggest audience yet — particularly in the younger generations.

Prime could be a great option for the NHL. They have a large amount of revenue, a large and growing audience, and currently have less traffic with other sports leagues. With fewer resources available than other leagues, the NHL could make this an innovative choice that helps progress them into the future.

Mix and Match

Potentially the wisest move the NHL could make would be to split up their rights, rather than sign another exclusive deal. The NFL is hosted by several national networks, and sometimes on Amazon. The MLB can be found on FOX and ESPN. If the NHL were to remain primarily with NBC, but give multi-game packages to the likes of ESPN or Fox, that offers multiple revenue streams and multiple points of exposure. If I were Commissioner Bettman, I would greatly consider giving at least part of my rights to Amazon. That’s a growing market, one that you’ve already worked with minimally.

Spreading the NHL product, while taking away from uniformity, is likely the best solution to this change of contracts. The league has to grow following the difficulties it has faced during the pandemic. Even if it means taking less money up-front, Bettman and company have to be mindful of which options will get them in front of the most eyeballs. Advertising will increase in value, tickets will increase in value, hockey will increase in social value. Everyone reading this (especially those who made it all the way through) are well aware of just how great the sport of hockey is. There is a new audience around the country that just needs better exposure to the product. This is the NHL’s chance to reach them.

Alec Martinez secures the 2014 Stanley Cup for the Los Angeles Kings

For as much as money talks, I still think that moments talk louder. A new generation of fans is waiting to experience its moments. Wherever the NHL finds itself next, I hope the memories they produce are just as mesmerizing.


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