NHL TV Ratings and Revenue

Discussion in 'The Business of Hockey' started by MAROONSRoad, Mar 7, 2007.

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  1. MAROONSRoad

    MAROONSRoad f/k/a Ghost

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    Hello business of hockey forum readers,

    This thread is for discussing various aspects of the NHL’s TV ratings and revenue (and the trends for such ratings and revenues). This is an area where information is not always readily available/accessible. If you have any information or want to add to the discussion, please post a reply in this thread with a source and link (if applicable).

    We often hear or read that the NHL is a “gate driven” league. What is meant by this statement (I assume) is that in comparison to other professional team sports in North America - the NFL, NBA and MLB - the NHL obtains a disproportionate share of its overall revenue from ‘in-arena’ sources, meaning (i) gate receipts from tickets including a percentage of luxury suite revenue allocated to ‘hockey revenue” for each arena and (ii) concessions and merchandise purchased by fans that attend the games. I think it’s a fair estimate that over half of the NHL’s revenue is derived from ‘in-arena’ sources as described above. This does not even include the advertising revenue from in-arena signage (scoreboard, ring, concourse signage, etc) that in some cases is directed mainly or solely at the audience attending the game rather than fans watching on TV (I assume board signage is aimed more at the TV audience).

    Anyway, the thread is not about the in-arena revenue, but the TV business of the NHL.

    The following hypothesis for why the NHL makes a disproportionate share of its revenue from ‘in-arena’ sources compared to the other leagues is not controversial (I hope :dunno: ). The reasons are simple:

    a) Although some NHL teams achieve good or even great local ratings in the USA, for whatever reason, hockey is not watched on TV by a broad spectrum of Americans, geographically or demographically, compared to the other professional team sports and thus it does not command much of a national (or sometimes much of a local) audience compared to the other three professional team sports;

    b) This lack of a large national audience, in particular, in the USA means fewer advertising dollars to the broadcasters of the NHL in the USA compared to the other major sports and in turn fewer dollars for broadcast rights fees flow to the NHL; and

    c) Local and national NHL TV ratings in Canada, no matter how large in percentage terms, cannot compensate for the above, due to Canada’s small population (just under 33 million - http://www.statcan.ca/english/edu/clock/population.htm) relative to the USA (301 million - http://www.census.gov/population/www/popclockus.html).

    The result is seen in these figures reported on June 9, 2006 by the Christian Science Monitor,

    "TV earnings for the National Football League, for example, are 66 percent of revenues. Hockey gets only about 3 percent of revenues from TV — a testament, critics say, to its lack of broad appeal. What's more, though on-ice fighting is down this year, hockey still sees occasional toe-to-toe brawls, which deter many soccer moms."

    http://www.cbsnews.com/stories/2006/06/09/sportsline/main1697024.shtml

    Another worrying consideration for the NHL as a TV property is the trend to fragmentation of the media and entertainment market that the 1990s brought on with the explosion of new media in the form of the internet and cable TV. Whereas the NHL had a captive audience in certain local USA markets because of old media’s monopoly coverage -- radio, local/national network TV sports news segments and local newspapers, for example -- the new media has allowed people’s interests to become more niche especially in the leisure/entertainment category and unless a sport is a major part of a community’s culture (see Football in the USA, for example) it is unlikely to retain its old ‘captive’ audience in a more fragmented/niche market place. For this reason, I see the NHL fans in the USA becoming more of a hardcore following. This hardcore group of fans will actually have much better sources of information and coverage than it has ever had in the past due to the internet, cable/satellite, PPV, etc., but that does not mean the NHL will expand it media footprint into the mainstream. On the contrary, the fragmentation of the marketplace means the exact opposite is happening.

    The situation is the same but different in Canada. There is the same ‘fragmentation’ of the media, but because hockey was already so firmly established as an entertainment/leisure option at a national level, the new media has actually caused the popularity of the NHL to increase. This is a view from someone that has spent much of the last 12 years living abroad (outside of the NHL universe in North America) and then returned to Canada. Cable broadcasters TSN and Sportsnet in particular have made a huge business of providing 24/7/365 coverage of all things NHL. You just can’t get away from NHL coverage in Canada, whether it’s having a drink at a bar (hockey games always on TVs thanks to cable/satellite), listening to the radio (the latest sports update on who scored in the Tampa Bay vs. Carolina match up) etc., etc.

    This initial post went on way too long so I’ll end it here. Next I hope to post some of the facts and figures I’ve gathered with less theory as to the why’s or wherefore’s.

    GHOST
     
    Last edited: Apr 19, 2007
  2. Corban

    Corban .

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    Good post. And this is just another reason Pittsburgh is very important to the NHL.

    Penguins a smash TV hit

    http://www.post-gazette.com/pg/07044/761652-194.stm


    Evgeni Malkin & the NHL - Are you kidding me ?

    http://www.blogmaverick.com/2006/11/02/evgeni-malkin-and-the-nhl-are-you-kidding-me/
     
  3. saskganesh

    saskganesh Registered User

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    I'm interested in more local ratings (like with the Pittsburgh example) than the elusive national audience thing. Anyone have data? :)
     
  4. MAROONSRoad

    MAROONSRoad f/k/a Ghost

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    Since you've ask, here are some local numbers I've found reported in the press for the two largest local TV markets in the NHL, New York City and Los Angeles:

    LA:

    Ducks average 16,000 TV households per game this year (up from 9,000 last season) in a market of 5.6 million TV households according to the LA Times in an article by Helene Elliott published December 18, 2006.

    Quote from the article:

    "The ratings on FSN Prime Ticket are up 59% over a year ago, the biggest growth among NHL teams on Fox regional sports networks."

    [Link to be added]

    NYC:

    Islanders average 7,336 per game,

    Devils average 13,206, and

    Rangers average 36,834 TV households per game

    this season in a market of 7.4 million TV households according to a NY Times article by Richard Sandomir published on February 2, 2007.

    [Link to be added]

    I'll post more later.

    GHOST
     
    Last edited: Mar 7, 2007
  5. rekrul

    rekrul Registered User

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    There is actually something that few consider here and that is how the NBA and MLB are continuing to raise the Rights fees beyond what they can deliver on scale now. Is it fair to think of a situation in the next 10 years where the NHL might get a lot more exposure because the networks will have to pay so much less to broadcast it. Think about why dull fests like Poker are on in the first place because they are cheap to produce and have no rights fees. Yes Hockey does take production into accout but some savy network may one day see a much cheaper product that can delivery the all important 18-40 Yr old male audiance. Who makes more money now ABC with NBA games or NBC with Hockey when you factor in how much Disney paid to broadcast the NBA in the first place. Typicly the NBA outdraws the NHL 3 to 1 so that many more eyeballs get more revenue and see porgramming for other shows. But I herd Disney is hating the deal because they are losing overall $$ to pay the NBA.

    Think Davis Stern will ever take less money in a network deal?
     
  6. EatSleepJeep

    EatSleepJeep Registered User

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    Crosby would draw viewers if he played in Tuscaloosa, Alabama or Jackson, Mississippi. Don't fool yourselves into thinking it's because of Pittsburgh.
     
  7. Jonjmc

    Jonjmc Registered User

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    Pittsburgh has always had these high ratings, including the times when the team was bad and had neither Lemieux nor Crosby. The quote offered was misleading.
     
  8. NJD Jester

    NJD Jester Registered User

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    So are we to assume that if the Penguins leave Pittsburgh, that entire city will stop watching hockey on television?

    Any evidence of that happening in Winnipeg, Hartford or Quebec City?
     
  9. TorontoSports

    TorontoSports Registered User

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    Is there any article on the Ratings before sid came to pittsburgh? I know by attendance that the Pittsburgh market tends to go to pens games when they get the next "phenom." If not, than whatever it's another market like the Islanders.
     
  10. Pens75

    Pens75 Pens Fan Since 1975

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    Wrong on both accounts...

    1) Pittsburgh supported their Pens without a "phenom"... unless you consider Kehoe a "phenom"...
    http://youtube.com/watch?v=SD1Jw-VbTPY

    2) Pittsburgh has had good TV ratings as long as I can remember, back to the 80's, Sid & Kids not the issue.

    - Islanders average 7,336 viewers a game
    - Devils average 13,206 viewers a game (based on a .18 rating)
    - Rangers average 36,834 viewers a game
    - #2 in U.S. = Pittsburgh average viewer rating is around a 5.0
    - #1 in U.S. = Buffalo average viewer rating is around a 7.0

    * These are local ratings, how many people watch their own team, verifiable through the archives and their links.

    Rangers have Jagr and an enormous population, what is their excuse for poor ratings?

    There are plenty of "stars" and "good teams" in U.S. cities that have poor TV ratings and poor attendance. The fact is, Pittsburgh is the oldest hockey market in the U.S. and the least of the NHL's problems when it comes to viewers.
     
    Last edited: Mar 7, 2007
  11. J-Zilla

    J-Zilla Registered User

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    It will be a tragedy if the Penguins move from Pittsburgh. :(
     
  12. undraftedstlouis

    undraftedstlouis Registered User

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    Anyone have the numbers for Versus vs the previous #'s on ESPN?


    http://media.www.the-mass-media.com...s/Qa.With.Johnathan.Kraft-2758314-page2.shtml

    Here Kraft (part-owner of the NFL Patriots and MLS Revolution) claims that MLS gets higher ratings on ESPN2. I'm guessing MLS performs average to below average on ESPN2 for it's typical audience while the NHL probably bumps up the typical Versus audience (hence even if lower, the NHL would probably be more valuable).

    What percent of total revenue is TV money? Compared to NFL/MLB/NBA?
     
  13. MAROONSRoad

    MAROONSRoad f/k/a Ghost

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    Neilson TV Market Size Data (TV Households)

    Below is copied some data that may be useful when comparing markets. I've only included the US NHL cities. The data is from Neilson Media Research.

    You can download the Excel Spread Sheet from Neilson here if you want the entire picture:

    http://www.nielsenmedia.com/nc/port...toid=6573d3b8b0c3d010VgnVCM100000ac0a260aRCRD

    GHOST



    Nielsen Media Research Local Market Universe Estimates

    Estimates as of January 1, 2007 and used throughout the 2006-2007 television season

    Effective September 23, 2006

    RANK Designated Market Area (DMA) TV Homes % of US

    RANK Designated Market Area (DMA) TV Homes % of US
    1 New York 7,366,950 6.616
    2 Los Angeles 5,611,110 5.039
    3 Chicago 3,455,020 3.103
    4 Philadelphia 2,941,450 2.642
    5 San Francisco-Oak-San Jose 2,383,570 2.141
    6 Dallas-Ft. Worth 2,378,660 2.136
    7 Boston (Manchester) 2,372,030 2.130
    8 Washington, DC (Hagrstwn) 2,272,120 2.041
    9 Atlanta 2,205,510 1.981

    11 Detroit 1,938,320 1.741
    12 Tampa-St. Pete (Sarasota) 1,755,750 1.577
    13 Phoenix (Prescott) 1,725,000 1.549

    15 Minneapolis-St. Paul 1,678,430 1.507
    16 Miami-Ft. Lauderdale 1,538,620 1.382

    18 Denver 1,431,910 1.286

    21 St. Louis 1,228,980 1.104
    22 Pittsburgh 1,163,150 1.045

    29 Raleigh-Durham (Fayetvlle) 1,006,330 0.904
    30 Nashville 944,100 0.848

    32 Columbus, OH 898,030 0.807

    49 Buffalo 639,990 0.575
     
  14. Jaded-Fan

    Jaded-Fan Registered User

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    Where is KC on that list? Seriously the NHL would take a huge hit if they lost the Pittsburgh market and don't think that they do not know it. 22nd is the total size market. That alone would be a tough loss. But add in that the Pittsburgh market has been a top three local market for the Penguins games for literally decades and the loss would be felt even more. Wiull it be a devastating loss to the NHL? Likely that is going too far. But it is a definate hard hit for a sport looking hard for a national television contract, and an unneccessary one given that the Pennsylvania offer is now competitive with most previous arena deals and is a deal that the Pens would have cried to take only a couple of years ago. My money is on Bettman coming to put pressure not just on the state but on Mario too to not get too greedy. If Mario pushes this too far and there is a legit offer on the table the league would step in to cover its own self interest.
     
  15. MAROONSRoad

    MAROONSRoad f/k/a Ghost

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    According to the numbers listed at Andrewsstarspage.com

    Recent ESPN/ESPN2/OLN Ratings (Regular Season)
    Season Network Rating Network Rating
    2001-02 ESPN 0.49 ESPN2 0.23
    2002-03 ESPN 0.46 ESPN2 0.23
    2003-04 ESPN 0.47 ESPN2 0.24
    2005-06 OLN 0.20

    http://www.andrewsstarspage.com/NHL-Business/NHL-TV-Ratings.htm

    GHOST
     
  16. MAROONSRoad

    MAROONSRoad f/k/a Ghost

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    Hi Jaded-Fan,

    I truly hope the Penguins remain in Pittsburgh forever.

    Here's your data:

    22 Pittsburgh 1,163,150 1.045
    23 Portland, OR 1,117,990 1.004
    24 Baltimore 1,097,290 0.985
    25 Indianapolis 1,060,550 0.952
    26 Charlotte 1,045,240 0.939
    27 San Diego 1,030,020 0.925
    28 Hartford & New Haven 1,014,630 0.911
    29 Raleigh-Durham (Fayetvlle) 1,006,330 0.904
    30 Nashville 944,100 0.848
    31 Kansas City 913,280 0.820

    Remember, it's not how many 'households' you've got, it's how many hockey fans there are in your market!

    GHOST
     
  17. trueblue9441

    trueblue9441 Registered User

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    just because the rangers have poor ratings doesnt mean that they have a significant amount of less people watching games.. if the numbers are right and im doing the correct math buffalos ratings work out to about 44000 households watching each game when they are the best team in the nhl, meanwhile the rangers have been mediocre at best all year
     
  18. MAROONSRoad

    MAROONSRoad f/k/a Ghost

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    Hi Skybax,

    Do you have links for any of the above data. It looks accurate to me. Buffalo, Pittsburgh and Detroit are among the very best markets in the USA. I'd like to see the figures for Minnesota, Dallas and Colorado also.

    Here's what Richard Sandomir wrote in the NY Times on February 2, 2007 regarding Detroit:

    "Among all the Fox Sports Net regionals, the Red Wings lead all hockey teams, averaging a 5.0 rating and 96,915 households."

    Since 1.0 Neilson rating point equals 1% of TV households in a given Designated Market Area (DMA), if your ratings for Buffalo and Pittsburgh are correct, we get the total figures as follows:

    Detroit 5.0 rating 96,915 households
    Pittsburgh 5.0 rating 58,158 households (1,163,150 x .05)
    Buffalo 7.0 rating 44,799 households (639,990 x .07)

    If my math is correct! :help:

    Those are much better figures than you see in NYC or LA with their huge markets. The Devils, Islanders and Rangers combined local TV ratings are around 47,000 "per game" (if three games playing at once could be considered one game), only 2,200 more than Buffalo's TV numbers, yet NYC has more than ten times the number of Neilson TV households. I'm shocked by that.

    GHOST
     
    Last edited: Mar 7, 2007
  19. MLH

    MLH Registered User

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  20. Pens75

    Pens75 Pens Fan Since 1975

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    So these numbers are TV Homes % of US and not population correct?

    While the Pittsburgh DMA is 1,163,150, the population is roughly 2,300,000 correct?
     
  21. Pens75

    Pens75 Pens Fan Since 1975

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    Some Pittsburgh games pull as high as 7.0, but these are average numbers were talking.

    Pittsburgh was 4.0 in 2006 and has increased since then, but it may only be 4.5.

    Without current hard data as of March 1st, it's fair to suggest...

    #1 Buffalo 7.0
    #2 Detroit 5.0
    #3 Pittsburgh 4.5

    ... until I see otherwise.

    In regards to hockey markets relative to population size, anyone who knows Pittsburgh or lives in Pittsburgh understands the market is not in question and never in question. You can't go 10 minutes outside anywhere in the greater Pittsburgh area with seeing Penguins something, it's everywhere, and it's been that way since the 1970's.
     
    Last edited: Mar 7, 2007
  22. MLH

    MLH Registered User

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    From what I've heard (and I struggle to get a lot of imformation from markets outside of Buffalo) Buffalo is #1 at roughly a 6.5 (it gets a bit higher when you add in HNIC ratings on CBC when the Sabres play the Leafs) and Pittsburgh and Detroit are very close at roughly 4.5.
     
  23. Hunter Gathers

    Hunter Gathers White guilt milquetoast piece of human garbage. Sponsor

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    Pretty sure that these numbers don't take into account viewings in NJ, upstate NY, Connecticut, and Long Island (all of which have TONS of Rangers fans watching the games).

    I believe that number is just for NYC alone.
     
  24. kdb209

    kdb209 Registered User

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    The Andrew's Stars Page business page is a decent resource for historical US national network television deals and ratings.

    Unfortunately, it is very hard to get a handle on US local ratings and revenues. Other than anecdotal reporting in local media, these numbers tend not to get broad distribution.

    Note also, that for many/most US RSN cable deals, there is not necessarily a corellation between ratings and revenues. Typically a team and RSN have negotiated medium to long term cable deals with pre determined rights fees that are not directly linked to ratings (until the next contract negotiations).

    The poster child for this are the New York Islanders, who's longterm cable deal (a many time renegotiated and extended extension of their original Sportschannel deal signed by Torrey/Pickett and Dolan in the late 70's) pays them $17M+ per season thru 2030.

    Most of the revenues for the RSNs do not come from advertising revenue, but from per subscriber rights fees paid by the cable company to the RSN, so there is not even a hard link between ratings and RSN revenues. RSNs need programming, and 70-80 NHL games fill a good bit of their schedule, even if their ratings aren't always the greatest.
     
  25. Hunter Gathers

    Hunter Gathers White guilt milquetoast piece of human garbage. Sponsor

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    Again, as I said below, that figure is hardly proving much of anything because it fails to take into account NJ, Southern upstate NY, Connecticut, and (I think) Long Island TV ratings (all of which are the market area for Rangers, Devils, and Islanders games). I think that that 7M number is JUST NYC, because there is no way in hell that only 7M people have TVs in all of those areas I listed unless this is 1950.
     
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