MAROONSRoad
f/k/a Ghost
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
). 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
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
). 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
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