NHL-NBC TV Deal

Discussion in 'The Business of Hockey' started by Ziggy Stardust, Jan 23, 2005.

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  1. Ziggy Stardust

    Ziggy Stardust Master Debater

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    I'm just pulling these past articles up to show the unhealthy financial situation the league is in as a whole.

    http://www.usatoday.com/sports/hockey/nhl/2004-05-19-martzke-nbc_x.htm

    http://sports.espn.go.com/espn/sportsbusiness/news/story?id=1804362

    http://www.tsn.ca/nhl/news_story.asp?ID=84443

    http://business.bostonherald.com/businessNews/view.bg?articleid=28781

    http://www.andrewsstarspage.com/5-23cba.htm

    http://www.post-gazette.com/pg/04142/319803.stm

    http://www.foursport.ca/June3_2004.htm

    http://msnbc.msn.com/id/5009347


    It further proves that small market clubs only hope of generating revenue is through local, TV revenues. The national TV contract will hardly be any help. It is difficult for small market clubs to compete in the league when the big markets can easily outbid them for their players. It becomes difficult to re-sign restricted free agents when they see players signing $3,4,5,6,7+M per year deals.

    A team like Calgary or Edmonton can't have a payroll that matches a Toronto or Detroit or Dallas or Colorado. When a Jarome Iginla sees what those teams are paying for players like Pierre Turgeon or Peter Forsberg or Doug Weight or Steve Yzerman or Mats Sundin... he is obviously going to demand a contract within the same ballpark. Calgary then has two options... cave in to a long term commitment and risk losing money and be forced to trade away other salaries... or, trade him away. It's a no-win situation in my opinion.

    There isn't enough revenue available to talk about revenue sharing. I think it is a must, but as the articles above will prove, there isn't a pie big enough to share with all 30 teams. And I am also skeptical that a hard salary cap will work. I think a system more along the lines of what the NBA has (a soft-cap... allowing teams to re-sign players) is a system that could work for the league.
     
    Last edited: Jan 23, 2005
  2. ScottyBowman

    ScottyBowman Registered User

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    Why is Carolina considered a small market with a state population of 8 mil and Colorado considered a large market with a population of 4 mil? Wait?? Can it be the fact that nobody cares or watches hockey in NC AND the league is trying to force a team down there??
     
  3. Ziggy Stardust

    Ziggy Stardust Master Debater

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    Small/big hockey markets are all determined by revenues generated. Los Angeles in its self is a big market, but is it considered a big hockey market? Tough to say... it did become a fad in the early 90's... then in the mid-90's it all plummeted up until they moved to Staples Center. Same goes with Anaheim. They were a fad and that quickly died down and I would consider them a small hockey market.

    And wasn't it ultimately Peter Karmanos's decision to move the Hartford Whalers to Carolina? Either way... the NHL's plan was to convert hockey into a national US sport and that is why they started targetting markets you typically wouldn't consider being "hockey" markets. That was their idea of getting the attention of the southern states, by expanding to Carolina and Atlanta. There was interest shown by businesses and sponsors, they had the arenas available, and at the time, the NHL couldn't pass up expanding to markets where ratings and interest must be generated in order for the league to be considered a national sport in the US.
    And just as it happened in Anaheim last year, the Hurricanes became a fad for a short while during their Cinderella run to the Stanley Cup Finals.

    Today I obviously do not agree with the league's expansion decisions. I couldn't understand why Florida needed two teams when you had the Lightning enter the league in 92-93 followed by the Panthers in 93-94. The league was looking forward to having big wigs such as "DISNEY" and "BLOCKBUSTER" involved with the NHL... and I believe they felt they could help the Florida hockey market by adding another team in an attempt to add a rival to the Lightning. In the NBA you have the Magic and the Heat (not sure they make much of a rival though), so the NHL wanted it's equivalent. I'm not making excuses for the NHL, I'm just trying to come up with a reasonable explanation as to why they made their decisions.

    Which is what leads me to believe why the NHL had its hands tied when they signed that TV deal with NBC. Do hockey markets like Toronto or Detroit care to watch an Atlanta or Florida game? Of course not. Neither does a national audience.
     
  4. hockeytown9321

    hockeytown9321 Registered User

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    Of course, they could always ask MLSE or Cablevision for some money. Then again, that would require the league to care if its members survive, so thats out the window.
     
  5. Hobey Baker

    Hobey Baker Registered User

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    No, it's because even though the teams are named "Carolina" and "Colorado", they actually play in Raleigh (city pop. 276,093; 1,294,691 in metro area) and Denver (city pop. 554,636; 2,220,805 in metro area). As you can see, the markets are considerably different.
     
  6. ScottyBowman

    ScottyBowman Registered User

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    Ok. But Atlanta, Tampa, Miami, and Phoenix all have bigger metro populations. Most people classify these teams as small market on this board.
     
  7. Ziggy Stardust

    Ziggy Stardust Master Debater

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    As I said... if there was a bigger piece of the pie to go around for everyone to share it would be great... and that is what the NHL needs with a big national TV deal but unfortunately we won't be seeing them signing one anytime soon unless the on-ice product improves as does the quality of the game and broadcasts on the television. As many of you oppose the idea, hockey has to be more "TV friendly" in order to garner a bigger national audience and attract more sponsors and eventually get that big lucrative national television contract.

    The league had that opportunity following the 1993-94 playoffs after the Rangers won the Cup... then the lockout happened and killed off the momentum the league built. Remember the Sports Illustrated cover... the NHL was hotter than the NBA.

    Anyway... back on topic. You say it would require the league to care for its members. Now there is a select few teams out there who generate great gate, local, media revenues. What percentage of those teams' gains do you divy up to the less fortunate clubs? The league also must ensure that the revenue being shared with the smaller markets is not being "pocketed" but is being spent on hockey transactions/operations.

    Let's assume the smaller markets manage to survive but just barely (as they are today). Pittsburgh for example. How could the league ensure their survival if they barely make anything in gate receipts or TV revenues? Will revenue sharing help them survive in the long run? I think not. For the short term it will patch things up, but in the long run, it isn't going to help improve Pittsburgh's attendance or television/radio ratings. It isn't going to help them gain anymore sponsors. And when they were successful, Pittsburgh proved they could generate an audience. They fell on some hard times and have paid the price and their future still seems uncertain in the city of Pittsburgh.

    Do I think a hard cap is the solution for everything? Of course not. But some form of "cost certainty" is necessary. Call it what you will, but there has to be some form of restraint and some form of revenue sharing. A bit of cooperation and open communication from both sides would be pleasant. Unfortunately, the two heads representing the owners and the players are more concerned with their own personal goals rather than collectively agreeing that the sport of hockey is in dire need of a change in order to be considered a "BIG FOUR" sport in the US again. When poker gets more coverage on US television and crushes hockey in the ratings, that is an indication that something is severely wrong with hockey in a national audience.
     
  8. Hobey Baker

    Hobey Baker Registered User

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    They're wrong. ;) In a per capita mode, these are small hockey markets because of the amount of people that give a crap, but in every other sport (i.e. sports that the average Joe cares about) they are very large, lucrative markets. I'm with you overall - I don't think that hockey belong in the Bettman markets. Not in the least. Do you know how sick I get when I say "Tampa Lightning, Stanley Cup Champions"? It's a travesty. Someone should have explained what hockey was to Gary B. before they brought him in to run the show.
     
  9. hockeytown9321

    hockeytown9321 Registered User

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    I agree. I just think its a shame Bettman gets off scott free by most people here.

    One other point: you say the league has to become more attractive to TV, and the 1994 Rangers could have been the start. I agree. thye need strong teams in the big markets. So lets have a salary cap which allows those big markets more access to star players through free agency.
     
  10. Ziggy Stardust

    Ziggy Stardust Master Debater

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    Well, I wouldn't say Bettman has got off "scott free." I think you'll notice the chorus of boos anytime he steps foot on the ice of a NHL arena. He's been critisized for years starting when he first got the job as NHL commissioner.

    There are some foolish owners out there who should take the brunt of the blame. They could afford to spend lavishly and had an endless team budget to sign players. The Rangers started it all with the $7M per year contract offer to Joe Sakic who was a restricted free agent at the time, forcing Colorado to match. They were "forced" to match. Here is a blurb from an article...

    Rangers general manager Neil Smith said New York deliberately frontloaded its offer to Sakic with a $15 million signing bonus, hoping it would discourage Colorado from matching it. "We had the ability to pay a large signing bonus," he said. "We did it that way to get Joe, and because maybe it would not be matched." Smith said Colorado's decision to match sent an important message around the NHL. "You're not going to sign a Group II free agent off the Avalanche," he said. "They've stepped up and proven that."

    The Rangers would then go on to sign Mike Keane (4yr,$8M), Brian Skrudland (3yr,$5.2M), Scott Fraser (3yr,$4M), John MacLean (3yr,$7.2M), Mike Richter re-signed for 4 years, $21.8M. They signed just about any free agent out there, even if they didn't need them; Brent Fedyk... Zarley Zalapski. Neil Smith sent Petr Popovic along with $2.1M in cash to get Kevin Hatcher from the Penguins (who was making $3.1M already).

    They go on to sign Theo Fleury (3yr,$21M). They also go on to sign Stephane Quintal (4yr,$11.4M), Valeri Kamensky (4yr,$17M), Kirk McLean, Tim Taylor (4yr,$5.8M) and Sylvain Lefebrve (4yr,$10M) all to ridiculous contracts.

    They decide to bring back Mark Messier (2yr,$11M). Sign Vladimir Malakhov (4yr,$14M). Think they learned their lesson after years of failures? Of course, they fire Neil Smith and bring in Glen Sather.
    What does Sather go on to do? Sign Bobby Holik (5yr,$45M), Darius Kasparaitis (6yr,$25.5M) Greg de Vries (4yr,$13M).

    All of these contracts priced out other teams and drove up the asking price for #3-4-5-6 dmen and checking line forwards.
    I attribute this big financial mess the NHL is in in large part thanks to the New York Rangers. In 1999, the Rangers had 13 players in the top 100 list of highest paid players.

    It opened the door for other teams to spend foolishly in order to keep up with the Rangers stupidity.
     
  11. rwilson99

    rwilson99 Registered User

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    You can't blame Bettman for the Lightning. The Tampa Bay franchise was approved by John Ziegler in 1990. The same commissioner brought the NHL to Edmonton, Winnepeg, Quebec City and Hartford via a merger with the WHA.

    The Lightning were the brainchild of HHOFer Phil Esposito. Without this "travesty" of hockey in Tampa Bay, Martin St. Louis would never have seen significant NHL playing time and Dave Andreychuk would have never won a Stanley Cup. NHL Hockey has failed or is near death in many traditional markets (Quebec City, Winnepeg, Hartford, Minnesota (The North Stars), Ottawa (Payroll? What Payroll?), Buffalo (Bankruptcy), and Pittsburg (In Mario Lemiuex's recievership).

    IMO, the disdain for hockey in non-traditional markets is Anti-American elitism, tainted by financial ignorance. The NHL expansion led the league to a $600 Million TV contract that was not capitalized on, due to a failure by the league to market new superstars and enforce the rules of the game.

    If contraction is what you want. Remember that the list may begin with some non-traditional markets, but will quickly expand to Ottawa, Pittsburgh, Buffalo and other teams that you, or some proper sophisticated hockey fan might care about.

    Finally, if the Cup belongs in Canada, remember that your logic places the Flames back in Atlanta, and Wayne Gretzky wandering around Indianapolis waiting for the WHA to come back.

    Expansion into non-tradional markets is not the problem with the NHL.
     
  12. Its not a horrible deal, they still have $140 million to look forward to with ESPN.

    The NBC could be good for the game in the long run, and build up there price in the future.
     
  13. Hockey_Nut99

    Hockey_Nut99 Guest

    This is what's wrong with the NHL system. Those teams have a right to spend what they want, but it hinders the whole league. It's a trickle down effect no matter what. It's like a kid saying "But my friend got one so I want one too"..Players compare themselves to other players with similar numbers and want the same as the next overpaid guy. The problem is that a team isn't sitting there and saying: "Hey we better not give X Player 6 million b/c those other teams are going to get screwed". Yes, teams over pay guys but that isn't the root of the problem. It's the effect it has on the whole league. This why the cba needs to be restructured. Everything an individual market does effects others teams. That is not a healthy competitive league.
     
  14. Its Cap or bust, I will never watch a NHL game again unless there is some form of cap.
     
  15. CantHaveTkachev

    CantHaveTkachev Still a joke of a team

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    the NHL did not "fail" in Winnipeg and Quebec City....they didn't have the money to pay for a new arena so they sold their teams to american owners who moved them south.(one to hockey "hotbed" Phoenix and the Nordiques won a cup in its 1st year in Colorado. I'm interested to see what the fans of the Avs think when their team doesn't make the Playoffs every year...)

    Contraction is what I want...Nashville, Carolina, Florida and Phoenix do not have the support and their "luster" has worn off. Expansion has only watered down the league to what it is today. 3rd line checkers become 1st liners... :help:
     
  16. coyoteshockeyfan

    coyoteshockeyfan Registered User

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    Phoenix doesnt have support? You might want to check out their attendance numbers, they are very solid in comparison to the league average, and much better than the previous location of the franchise.
     
  17. Hobey Baker

    Hobey Baker Registered User

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    thank you.
    I'm really tired, so here's hoping this makes a little sense.

    The league didn't "fail" in Buffalo or Minnesota either. Buffalo is again on solid footing with Golisano after a few unfortunate years of seedy ownership courtesy of the Adelphia thief. If you're going to somehow add Buffalo to a list of contraction eligibles, you might as well put the NYI on that list also. Minnesota had their team Modell'd from them. Hartford and Winnepeg were never large markets to begin with, but they still would do better than Miami and Carolina today based on the fact that more people care and support the teams in those areas.

    Martin St. Louis owes his career to the Tampa Bay market?! The guy was a late bloomer whose talent couldn't have been denied regardless of location. He just wasn't hot stuff when he was fresh out of college.

    It's hard to capitalize on a TV contract when you're trying to make a group of people who just saw a puck for the first time instantly support a game full of mulletheads. The ratings were awful even when Gretzky was doing his Nike commercials. Bettman took the game south and it hasn't worked. Plain and simple. I'm sorry if that offends the few people who actually go out and support their teams in the non-trad markets.

    I believe the poster before was assuming that I'm a Canadian, or that I'm pro-NHLPA. Well, I'm an American who's on the side of the owners. I'm just a realist who recognizes that Gretzky's trade to LA was one of the worst things to ever happen to the game.
     
  18. tulsytrid1

    tulsytrid1 Registered User

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    http://www.hockeyresearch.com/mfoster/business/nhl_attn.html Count on there how many times Winnepeg's average attendance was higher than the teams you mentioned :banghead:
     
  19. cws

    cws ...in the drink

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    The NHL didn't fail in Atlanta the first time around either. They weren't breaking any records to be sure, but they also weren't dragging the league down in any way. It was their owner who lost his shirt when the real estate market (his primary business) hit the skids, he had no choice but to sell. Calgary investors swopped in with more money than several bids to keep the team in Atlanta and, presto!, the Calgary Flames were born.

    That still ticks me off, as the Flames were becoming more known within Atlanta. Gotta give respect though for putting the old logo on the assistant captains of Calgary. But I digress...

    I'll grant you that the luster has worn off in several of the expansion/relocation cities. But to move them from those cities would be counter-productive. It takes time, a lot of time, for hockey to become "fully" integrated into the sports cultures of these cities. Somewhere in the area of 20 years (or about a generation).

    Now, we all know that cycle has already been completed in Winnipeg and Quebec City. And if the economic conditions were good enough for those two cities to have an NHL team in this day and age, I'd be 100% for it. I always loved the excitement of the fans in those cities. Unfortunately, that just can't happen right now. Many hockey-saturated markets just aren't big enough (population, corporate structure, etc.) to justify an NHL team.

    But how would it be any better if some of these teams were moved to other locations that have the favorable economic conditions to sustain an NHL team? Of the few that might be available, there are no guarantees that it will work. And would it be worth it to throw away 4, 5, even 10 years of development to move these teams to other markets where you have no guarantee of it working any better? That last question is pretty much rhetorical.
     
    Last edited: Jan 24, 2005
  20. GKJ

    GKJ Global Moderator

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    Also the NHL is the only sport on NBC aside from Arena Football and the olymipics.
     
  21. shnagle

    shnagle Registered User

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    Great post. People seem to forget that Bettman works for the owners and Goodenow works for the players. Unfortunately, nobody is working for the good of the game. Also, your dead on about the revenue problems for the NHL. Many posters have stated that the league needs real revenue sharing. In my opinion there is simply no revenue to share because there is no TV deal. I just don't see how the concept of "cost certainty" without major revenue growth will be able to sustain 30 teams in this league. In my opinion contraction would be the ideal answer. However, the league doesn't want to lose frachises and the NHLPA doesn't want to lose jobs. Just my two cents.
     

  22. Outside of Canada, the only markets doing well are the hockey markets.
    Duh.
     
  23. Motown Beatdown

    Motown Beatdown Need a slump buster

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    Well they have NASCAR too.

    I think NBC will do a hell of a lot better job of marketing the game than ABC did in the past. Some of the promos they are running after the AFL are great. Using stars like Elway and Jon Bon Jovi.
     
  24. rwilson99

    rwilson99 Registered User

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    Where would Marty St. Louis have caught on in a 21-team league? He was let go from a Calgary squad that hadn't made the playoffs in 3-4 years at the time, and hadn't won a playoff series since 1989. In Tampa, he landed with a team in the fourth year of four consecutive 50-loss seasons as a fourth liner.

    Hockey's expansion into the South (Dallas*, Tampa, Miami, Atlanta, Nashville, Pheonix*, Carolina*) has been more successful than the absorbtion of the WHA which brought Gretzky into the league. 2 of the 7 Southern franchises have won the Stanley Cup, while 3 of the 4 WHA franchines in tradional hockey markets have moved, and the greatest of the former WHA franchises had to sell away thier team one player at a time. (*Moved Franchises)

    Demographic shifts in an affluent society that wishes to live in warmer climates dictated expansion into southern markets. While the NHL expanded south, so did the NBA (Carolina, Orlando, Miami, New Orleans, Memphis), NFL (Jacksonville, Carolina, Houston) and MLB (Miami, Tampa Bay, Arizona). Only one expansion team from each of MLB, NBA, and SFL hails from a northern market, Colorado (MLB), Cleveland (NFL), Colorado (MLB) since the 1990s, while three came from the NHL (Ottawa, Minnesota and Columbus).

    The NHL did nothing but follow demographic trends in an attempt to nationalize the sport. Every southern based franchise will not succeed, but growth in these markets (largely coming from northern cities) gives these teams a much better opportunity for a future than the WHA franchises that largely came from smaller, shrinking, traditional markets.

    Contraction doesn't solve any of the NHLs problems, it will only solidify the marginilization of the sport in North America.
     
    Last edited: Jan 24, 2005
  25. Main problem is NHL does not promote and market there games like NFL or NBA do. People will care if you make the games seem important. ABC showed promos of the Stanley CUp like a regular season game.

    NBA games they got dancers singing official theme songs, build up for the FInals from the start of the playoffs. NHL needs to promote it add exciting things to it. Have actors and Gretzky people like that doing doing commercials. Make the Stanley Cup seem like a spectacle.

    I think the NBC deal will in the end be beneficial for the NHL in the long run, it might hurt them a bit right now, but this could be just a launching pad on how hockey should be marketed, and the NHL can obtain a large million dollar contract. They will never get the billions the NFL or NBA bring in. They should be happy that if there ratings climb a company will offer them $250 Million.
     
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