For NHL, Best Move Might Be ESPN
MIKE PENNER Los Angeles Times July 15, 2005
They wiped out a season, they wiped out more than 300 days, they wiped out a $60-million television contract with ESPN.
Now that the NHL appears to have gotten that pesky self-immolation phase out of its system, how does it go about picking up the pieces of its shattered national image and drag its scarred and battered face back onto television screens across America?
If it takes the advice of sports media analysts and experts, the league will go back to ESPN ASAP.
"I think there's certainly a likelihood that they will renegotiate their deal with ESPN," said Neal Pilson, former president of CBS Sports. "Perhaps at a lower number and probably with fewer games. That's a speculation, but I think ESPN2 is a perfect carrier for hockey, and I think it works for both parties."
Marc Ganis, president of the Chicago-based sports industry consulting firm Sportscorp Ltd., says the NHL has no other viable option.
"They have to go to ESPN," he said. "There really is not much of a choice here, not necessarily because of the money they'll make off the game broadcasts, but rather the promotional exposure that ESPN will offer across a broad spectrum of sports fans.
"At the moment, while the NHL is relaunching itself, that's much more valuable than an extra few million dollars a year. So I think they have to go back to ESPN and try to work out a deal with Mark Shapiro and hope that they can get a short-term deal like they did with NBC and not have to give up a guaranteed rights fee for longer than a few years."
At present, the NHL's only national television deal in the United States is with NBC, which plans to broadcast a smattering of Saturday games, mostly during the second half of the 2005-06 regular season. The league's contract with NBC calls for telecasts of seven regular-season games, six playoff games and up to five Stanley Cup finals games. The agreement does not involve upfront money, with revenue to be shared by the NHL and NBC.
ESPN declined to pick up its option for the NHL's 2005-06 season after the league canceled its 2004-05 season, but the network released a statement Wednesday noting that it "had a very good, long-term relationship with the NHL" and is "always open to listening to potential scenarios that have us both equally sharing any risk."
There has been speculation that the NHL might opt for a different cable outlet for its national broadcasts, with such names as TNT, USA Network and Spike TV being bandied about.
"I think this Spike TV [rumor] is kind of interesting," said Paul Swangard, managing director of the University of Oregon's Warsaw Sports Marketing Center, "but I still think they need an ESPN kind of deal just to contribute to the legitimacy of the property. â€¦ ESPN is arguably the legitimizing network of sport right now. They can even make poker seem relevant.
"And now the other dimension is HD," high-definition television. "And that's where ESPN comes into play again. They have two HDs, they have ESPN and ESPN2 both operating in HD.
"The NHL in '03-04 was running HD through Mark Cuban's HDNet, but that was just sort of novelty. I think now that ESPN has legitimate HD capacity, that to me is a marriage for both. It's compelling for the NHL to want to do a deal, and it's the best way to see their product on TV."
Other speculation had the NHL placing some national telecasts on one of NBC's cable properties, such as MSNBC or USA, but Pilson dismissed that possibility.
"I don't think [MSNBC] would be a terrific place to put hockey," he said. "I think hockey belongs on a channel where's there are a lot of young men [watching]. There are other channels out there that have that kind of viewership."
Pilson said USA's demographic "is not that compatible with hockey. They have an older, mixed demographic, men and women, mostly with entertainment programming. The sports they do have are golf and tennis, which is not the hockey demographic."
Spike has the type of demographic the NHL wants. "Spike's demo is the 31-year-old male," Pilson said. "But there's a question as to whether Spike is going to continue its format."
The NHL could go to a smaller cable network," Ganis said, "but they would significantly reduce their promotional exposure" compared with ESPN.
"This is one of those situations where the NHL is just going to have to bite the bullet. Bite the short-term bullet because of the long-term benefits. And they have some flexibility, with there being a pullback on player salaries, if their revenues are less than the $1.8 billion they're estimating."
Media analysts say any new NHL-ESPN deal will feature little or no upfront money to the league.
"I think ESPN has decided that what they want is a revenue-share deal," Ganis said. "And they hold all the cards right now."
Said Swangard: "I think ESPN knows that they have some negotiating leverage here. But I think from a general standpoint, this idea of revenue sharing â€¦ is not a bad way to do business. It's exactly what they just told the players they wanted to do, that we're going to try to grow this business together and if we grow the business, for every dollar we bring in, we'll give you 54 cents.
"I think that's just another way to reinforce this mentality that needs to be pervasive inside the league that, you know, we all have to be selling, and we all have to be selling togetherâ€¦.
"At the end of the day, would I rather have an upfront payment? Absolutely. But I'm not sure hockey is in position to be demanding that type of activity. It puts the onus on the league to sell their product. And I think that is what they were expecting they were going to have to do anyway."
Ganis said that with the proper rule changes, improved marketing strategies and right television package, the NHL has a chance to reinvent itself.
"You know the old saying, 'You never get a second chance to make a first impression?' " he said. "The NHL has one of those very rare opportunities for a second chance to make a first impression. At a terrible cost, but they have that opportunity.
"I am very eager to see how they take advantage of it."