NHL Likely to Sell All TV, Digital Rights in 2011
June 15, 2009 7 Comments
From the fantastic John Ourand and Tripp Mickle of Sports Business Journal (reg. required):
The NHL is within a couple of weeks of announcing its broadcast TV deal with NBC for the next two seasons. The NBC renewal means that all of the league’s domestic and international TV deals will expire after the 2010-11 deal, including its cable TV deal with Versus and international TV deal with ESPN America.
During the league’s negotiations with NBC, there was some question about whether the NHL should sign another revenue-sharing deal with NBC. Given the ratings increases this season on Versus, some hockey executives wondered if the league should sell NBC’s package to Versus, which holds cable exclusivity.
But the NHL ultimately opted to extend the revenue-sharing agreement because of the breadth of NBC’s broadcast platform. Even with Versus ratings growth this season, NBC’s hockey coverage still was much more popular. For example, 79 percent of the 35 million unduplicated viewers who watched a Stanley Cup Finals game in 2008 only watched NBC.
“This is the power of the NBC relationship right now in our development,” said NHL Chief Operating Officer John Collins. “They provide us a big broadcast platform and the ability to create big events like the Winter Classic and Stanley Cup Final.”
By syncing the U.S. TV deals, the NHL will be able to go into the market with one big package and avoid some of the challenges of trying to sell the NBC package on its own this year, such as negotiating around Versus’ cable exclusivity.
This is a good idea for the league. Having everything to sell in one year gives you the chance to sell to companies that own both broadcast and cable networks (FOX, NBC, ABC) as well as try to leverage money from separate companies. It certainly doesn’t bode well for VERSUS, which can only bid for the cable portion of the package.
Puck The Media 
If the NHL is entering into a revenue sharing deal with NBC, which one would think NBC would rather do than pay rights, shouldn’t the league be able to leverage that into getting all 7 games of the Cup on network television?
Also, I’m not very familiar with the intracacies of TV contracts, but if Versus and NBC are both interested in carrying hockey in 2 years, couldn’t some sort of time buy deal be worked out between them?
Technically yes, if NBC wanted to go in on something with Versus they could, although I don’t see it that likely. However if they are looking for a network with a cable and network channel, ABC seems like the only choice. FOX does have FSN but the problem is so many local FSNs have basketball and baseball games as well as hockey that a national broadcast would be unlikely especially in April when MLB starts. NBC does have a bunch of channels they could use but usually don’t cover sports except in the Olympics. It will be interesting to see what they end up doing, and also who wants the NHL. If the ratings continue to climb then there could be a dog fight for them.
Unless ABC/ESPN wants the whole thing, there will likely be a broadcast deal and a cable deal. It’s the same for every other sport…MLB has a Fox contract and an ESPN contract, college football conferences have broadcast deals for the top games each week and then cable for the other games.
I think what this allows the NHL to do is to sell his TV rights in any way it sees fit in 2011 with every option available. If they tried to get a bidder this year, they already have a deal with Versus in place so they have little wiggle room. For example, doesn’t the Versus contract state they must get two games of the Stanley Cup final? In 2011 though, the NHL could offer, say, Fox all seven games. That’s what I think the real goal of this is. And it brings ESPN/ABC to the table since the Versus contract would be up.
Good point. Another thing to look at is possibly doing a similar schedule to the NBA. ESPN/ABC gets games and Versus gets games. then give Versus a conference final, ESPN/ABC a conference Final and then ABC does the Cup Finals. That would be a possibility.
Not sure they’d have interest in this, but a Fox network-FX cable deal might be another way to go. I could see it working very much like how TNT has NBA games. And I do think there are some distinct advantages to having a network partnership; just think of how they could advertise the games in the fall during the NFL on Fox telecasts and during the spring on MLB telecasts. And I’m guessing that FX has a wider distribution, particularly through DirecTV/Dish and standard cable, than Versus.
It’s a smart move by the NHL to put everything up for sale at once. It makes complete sense. I suspect ESPN to get involved to put on ESPN2
Yeah, I can see what the league is trying to do. But they will be holding their breath that the ratings are still good enough in two years to where they get more than one bid for rights. And as other posters noted, there is the factor of Olympic television rights bidding, which should happen sometime next year after the 2016 Summer Games host is chosen (those rights will be pooled with Sochi 2014).