Thursday, February 10, 2011

Breaking Down NHL TV Deal is reporting that the NHL is hard at work negotiating a TV deal with NBC/Versus (now related companies under the Comcast umbrella). It's reported that the deal could keep hockey with NBC for 4 to 7 years.

A few points:

(a) Even if the NHL signs with NBC/Versus (which is highly likely), there is nothing stopping the NHL from signing deals with OTHER networks like ESPN. Look at the NFL - they are on every major network (except for the Slice channel) - ABC, CBS, FOX and NBC. The NHL has invested a lot of its own time and money in Versus so hockey is staying there in all likelihood. With Comcast now on board, seems very unlikely that Versus won't have hockey. Yes it is hockey by appointment, and is not available everywhere; however the foregoing factors keep it there.

(b) Getting on ESPN is important for the NHL. Since ESPN didn't renew its hockey deal, NHL coverage on ESPN has been spotty at best. The exposure the NHL would get through ESPN would be beneficial for its brand. Not only games but also news coverage. And don't forget, ESPN also has the NFL through to 2023. That means lots of people will be watching the network (it has a subscriber of 100 million worth $6 billion). So being on ESPN gets the NHL lots of eyeballs.

(c) The current deal with NBC is not a good one. NBC doesn't pay rights fees. The NHL and NBC just split ad revenue. That's going to change and expect to see NBC pony up some money.

(d) Whatever TV deal is struck, projections have each NHL team getting about $4 million in TV revenue a year. That's almost enough to sign Joffrey Lupul. How does that compare to the NFL? It doesn't. Each NFL team gets a yearly payout of between $150 to $160 million. It's a work in progress for the NHL but things are trending in the right direction.

One suggestion for a better game - make the ice bigger. The size of the ice was designed for players half the size and half the speed of current NHL players. It's a bit like a traffic jam out there and players aren't given the opportunity to create on the ice like they used to. With less room comes more injuries, particularly concussions. With a bigger ice, players would have more room to create, score more goals, all the while decreasing the risk of injury. Gary Roberts said that much recently.

Teams shouldn't be relying on power plays for goal production. We would see a lot more 5 on 5 goals with a bigger ice surface - not to mention a far more exciting game with an accent on player safety.

Why do I mention ice size in a column about TV revenue? Better game = more interest = better TV deal.

Yes I do appreciate that the NHL is a gate driven league as it derives much of its revenue from ticket sales. However, I don't buy the argument that if you eliminate seats in favour of a bigger ice, you lose too much revenue. What you lose in a few rows of seats today you gain 100 fold tomorrow in TV revenue.

The size of the ice hasn't changed - and it should.

I'm not advocating for Olympic size ice. Just something a bit bigger that gives players more of a chance to show what they can do - skate, shoot and score. And all that without getting their heads knocked off.

In an interview this week, Curtis Foster of the Oilers agreed that more ice made more sense.

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