USA Today: NHL TV Contract Deadline is June 1st

Discussion in 'The Business of Hockey' started by vopatsrash, May 27, 2005.

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  1. vopatsrash

    vopatsrash Registered User

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    I don't see this anywhere, so I thought I'd start a thread on it.

    The NHL TV contract is discussed in this article from USA Today...

    "NHL TV: You hate to see the suffering face more stress. But the NHL, maybe by Wednesday, faces another hurdle: Keeping its national TV money.

    TV deals, like any business deals, aren't always driven by deadlines. But ESPN already has extended the date to June 1 for renewing its option to continue its NHL coverage for one season for $60 million.

    That total would be a big drop from the $120 million that ESPN paid each of the previous four NHL seasons, a deal that helped average player salaries grow from $1.35 million to $1.83 million.

    But now the NHL would be lucky to get anywhere near $60 million. Like any league that cancels play, it faces the prospect that not all its fans will return. And, in terms of TV, it seems expendable: ESPN's makeshift replacement programming has drawn comparable ratings to NHL games.

    The wild card is whether any other network would want hockey, whose TV ratings are truly diminutive. NBC got the Stanley Cup Finals without paying a rights fee.

    NHL spokeswoman Bernadette Mansur says "there's nothing to say" about TV issues; ESPN spokesman Mike Soltys says only "June 1 is the deadline."

    A logical guess: The NHL stays on ESPN for well under $60 million and NHL owners, by next week, have another reason to cry poverty."
     
  2. Levitate

    Levitate Registered User

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    and that would be crap cuz it was already known they were going to get less money out of a deal this year and that should have been part of the idea all along
     
  3. Jarqui

    Jarqui Registered User

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    "That total would be a big drop from the $120 million that ESPN paid each of the previous four NHL seasons, a deal that helped average player salaries grow from $1.35 million to $1.83 million.

    So they were already taking a $60 mil hit and are now facing another $60 mil hit. At 54% of that $120 Mil revenue to the players, that's $89,000 less to each player.

    Who thinks they get a deal settled by June 1 when they are not meeting again until around June 1 ?

    It doesn't look good for an ESPN TV deal if June 1 is "the date".
     
  4. Pavel

    Pavel Registered User

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    With that deadline staring them in the face perhaps they could come back after Memorial Day and close the deal Tuesday.
     
  5. HockeyCritter

    HockeyCritter Registered User

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    As much as the loss of this television contract will hurt, I think it is more important to hammer out a workable, reasonable, long-term CBA . . . . rushing to finish it to meet this deadline can cause more harm than the loss of $60-million.
     
  6. Kritter471

    Kritter471 Registered User

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    Another thing - if the NHL/NHLPA can approach ESPN and say "we believe we are working on a path that will lead us to an agreement for the opening of next season," I bet ESPN keeps them, though at a somewhat reduced rate.

    It'll be really interesting to watch for that, because all the public statements are along those lines, but coming out and saying that to ESPN would put huge pressure on both sides to stop being deadline hunters.
     
  7. RLC

    RLC Registered User

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    As much as I hate losing another 60mil contract, ultimatly the new rules and more exciting product is at the heart of the matter.
    Getting the right mix is what the NHL needs. In the state the NHL is now, this might take 5 years before new rules produce high demand for ESPN. BUT if all goes well the contract at that time will be much more then 60mil.
     
  8. HockeyCritter

    HockeyCritter Registered User

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    I think people overestimate ESPN's influence and ability to pressure the NHL/PA. Their contribution, both financially and marketability, has greatly diminished over the years. Direct TV and satellite providers have a greater impact on the game in numerous respects. It is there that the NHL/PA will feel the pressure.
     
  9. GKJ

    GKJ Global Moderator

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    Not happening.
     
  10. Kritter471

    Kritter471 Registered User

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    I think people underestimate ESPN's reliance on the NHL to fill programming voids. They have two (now three) 24-hour sports networks to fill with programming, and with the popularity of some of their firestorm shows - poker - tapering off, they'd love to put a show on that draws a constant audience and gives them credibility, even if it's small.

    Now, will they pay $60 million still? That's doubtful. They will want to excersize the idea of "well, we don't want you that much," as leverage for future negotiations. But even with this deadline approaching, I don't see them totally dumping the NHL, especially if the league/PA or whoever gives them clues that a deal will be reached this summer.
     
  11. HockeyCritter

    HockeyCritter Registered User

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    The NHL was a ratings bust for ESPN - - they don’t need the sport regardless of the number of channels they have. There is more than enough programming to fill the "void" left by hockey (and I don't mean poker). College sports (ever growing in popularity) seems a natural fit.
     
  12. Jaded-Fan

    Jaded-Fan Registered User

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    $60 Million = $2 Million a team.

    a) I do not see the owners taking a bad deal over $2 million
    b) You could get a group of clog dancers and get enough people to watch to justify $60 million. It is chump change, and especially with a very desirable hard to reach audience (I read somewhere once that most sports demographics best reach young male audiences than any other programming, which is why networks overpay, the advertisers have little other way to reach this audience).
    c) I would bet dimes to dollars once hockey starts up again they could get $60 million from somewhere. How low is the offer going to fall? $1 million a team? And the owners are going to jump through hoops over a couple of million?
     
  13. mooseOAK*

    mooseOAK* Guest

    The NHL never got great ratings for ESPN but the hockey fan demographic is more attractive to advertisers than it is for poker and the minor college sports like baseball. Hockey fans tend to be more affluent, it isn't a cheap sport to watch or play, and have more disposable income.
     
  14. GSC2k2*

    GSC2k2* Guest

    What is the big deal? This deadline has already been extended at lease twice, when there was far less hope of a resolution. There is no doubt in my mind that, if two more weeks are needed, ESPN will grant another extension.
     
  15. Hasbro

    Hasbro Can He Skate?! Sponsor

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    I think Bettman can sell ESPN on the deal being ready in short order, at least getting an extension till the 15th.

    Anyway, anything to get Goodenow off his ass!

    Did I read correct that they are taking memorial day weekend off?! Jebus guys get a deal done and have all the vacation you want. God knows they've had a light workload the past 10 months!
     
  16. Jaded-Fan

    Jaded-Fan Registered User

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    Sports became attractive to advertisers because of a few crucial demographic facts. To begin with, American males between 18 and 49 don't watch as much television as other groups. But they do watch sports. Therefore sports have become a palatable and profitable way to capture their attention.

    http://www.medialit.org/reading_room/article206.html

    If ESPN wants to dick around over $2 million a team, let 'em. There will be plenty of others lining up to take their place at such a bargain price.
     
  17. Jarqui

    Jarqui Registered User

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    We also shouldn't ignore the cascading effect: if the ESPN deal goes, there will be a long line of arena advertisers looking for a decent discount for their ads on the boards which will no longer get to be seen by the ESPN viewing audience and no longer get to be seen as much due to a dwindling fan base.

    Of course, each time this happens, if they are not talking linkage, all the numbers have to be renegotiated because revenues have dropped.

    As well, with the revenue loss, fixed overhead expenses don't go down so 52% of the total lower revenues may become "similar" to what 54% of the original revenues were because the variable revenue pie is smaller but the fixed expenses are not.

    They're entering a pretty crazy spiral downward if they don't get the deal done soon.
     
  18. Weary

    Weary Registered User

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    Nope.
    Hockey and poker demographics are nearly the same. And the fact that poker draws higher ratings these days -- at least since the last time NHL hockey was played -- makes it that much worse.
     
  19. Hasbro

    Hasbro Can He Skate?! Sponsor

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    Oh course remember when we were hearing this **** about pro wrestling? :dunno:
     
  20. Benji Frank

    Benji Frank Registered User

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    60 million $$$ spread over the NHL right now amounts to a 3rd or 4th defenceman. Even after the t's are crossed and i's dotted, it still not cover much more then a second/third defenceman!! I'm sure the NHL owners are more inclined to try to get the best deal they can over the next couple of weeks or months and then GIVE AWAY the TV rights for next year maybe to 2 or 3 networks if that's possible just to get as much exposure as possible over the course of next year with this "new" product & attitude!!

    In my opinion, the more pressing issue is getting a deal done in time for the draft ... June or July whenever it might be. Put Crosby in a market where they'll recognize him and perhaps then the league can grow around a face like his ... Gretzky did it in Southern US, Mario brought the Pens back to life out East ... even to an extent, Lindros brought excitement to Philly....

    IMO, putting a Crosby in Boston, Chicago or New York & then getting as much exposure as possible over the next 12 months no matter what the return pricetag is would do a whole lot more then making a deadline for a 60 million $$ deal.......
     
  21. WC Handy*

    WC Handy* Guest

    When poker is televised during the WSOP it's the type of thing that the majority of poker fans is going to watch. Just like NASCAR. Just like bowling. Essentially, all the 'teams' play in the same event so everyone has someone to cheer for.

    The NHL has 2 teams in each of the games that and the fans of those two teams won't ever account for more than 15% of the league's fan base.

    The ratings comparison is all but irrelevent.
     
  22. GKJ

    GKJ Global Moderator

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    I'll bet money Crosby ends up in LA or Anaheim.
     
  23. Weary

    Weary Registered User

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    The WSOP final table in 2004 had none of the really big names of poker. There were guys like former champion Dan Harrington and up-and-comer Josh Arieh, but no one with a huge following. It got high ratings because people have become interested in the game.

    I don't think ESPN considers ratings comparisons to be irrelevent. I think they consider them highly critical.[/QUOTE]
     
  24. Hasbro

    Hasbro Can He Skate?! Sponsor

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    Yeah the Rangers would be to obvious a fix. :sarcasm:
     
  25. mooseOAK*

    mooseOAK* Guest

    Then we will never see hockey on ESPN, it doesn't make sense to spend all that money on an NHL broadcast when all you need to do is put a camera beside a card table.

    Seriously, you have no idea what you are talking about. Go to a casino sometime and tell me those people are the types that advertisers are going to spend a lot of money going after, other than the casinos themselves of course.
     
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