ESPN signs 7 year deal with the NHL

[Marshmallow Man]

NBCSN shows car shows and professional tag so axe throwing is a bit of an upgrade. ESPN has lost a bit of popularity but it’s still the biggest sports network by far. When people want to watch sports the first channel they check is espn. Espn also has a huge social media following. If they regularly post about the NHL on Twitter and Instagram the leagues ratings will go up. Being on ESPN helped make the nba and ufc more popular so I think it’ll make the NHL more popular too.

None of that will make any difference unless the product is good. The only time hockey had buzz in the US in my lifetime was the early 90s. It was run and gun, high octane hockey with tons of offensive star power. The 94/95 lockout and dead puck hockey killed all the juice the NHL had and it never recovered.

 

[IU Hawks fan]

The NFL must be hemorrhaging money in that case. I take it they are the least successful of the major sports in the US? With a measly 17-game season, their TV rights fees must be abysmal. Merch and sponsorships too!

Talk about apples and oranges.

 

[Marshmallow Man]

Talk about apples and oranges.

The point I’m making is that there isn’t nearly the causal relationship between number of games played in a season and league revenue as you might think, especially over the long-term. If it were that simple, you’d play 164 games and double your revenue overnight.

The league last played a 76-game regular season in 1969-1970. If you go back in a time machine and convince them to keep the regular season at 76 games permanently, league revenues in 2021 wouldn’t be $1 less than they are today. If anything, they might be even higher.

 

[eddygee]

The price ESPN paid for package A is too much for any other network to pay for a proportional priced package B. I think that's why package B negotiations have been going alot longer than expected.

That's what alot of people don't understand. ESPN paid extra for the benefit of killing off NBCSN when they took 60-70% of the rights. The slowness in NHL selling the other portion of rights shows the way other Networks view the value of the portion of those rights. In theory you can understand the planning. Have the ESPN deal where people go whoa the NHL is a hot commodity look at what ESPN paid and there was alot of good P/R for 2-3 weeks. NHL probably figured with that deal we can set a new market rate for our games and get something more like $200m for Package B as other networks will figure lets get in on this too.

The only thing they didn't forsee was other networks dragging their feet on the $200m yr price tag. Sort of like some articles have mentioned that NBC has balked. They paid $200m yr for 100% of the NHL rights so why pay $200myr for 40% of NHL rights. That's bad business to share holders. Disney/ESPN likely knew they'd kill off NBCSN and this would happen. Bettman should of insisted that Stanley Cups rotated years. Doing it the way where one networks get the balk in consecutive years makes it less attractive vs rotating year to year.

The whole construction of the deal right down to the years shows the cunningness of the construction of the deal on ESPN's half. A seven year deal creates the imbalance that a 8 doesn't. You go a 8 year deal between two networks it's easier to split, 7 yrs established there will be a A Package and B Packages.

 

[LosVikingsDeChicago]

I think the deal with ESPN is extremely short sighted by the NHL because they're really giving ESPN all of the leverage. If I'm NBC, I'm making an extremely lowball offer and working from there. Actually, NBC can probably negotiate a really good deal. So now the NHL is left holding their "d" and the networks basically have them over a barrel because there hasn't been a rush to bid for the package (no pun intended).

 

[jkrdevil]

That's what alot of people don't understand. ESPN paid extra for the benefit of killing off NBCSN when they took 60-70% of the rights. The slowness in NHL selling the other portion of rights shows the way other Networks view the value of the portion of those rights. In theory you can understand the planning. Have the ESPN deal where people go whoa the NHL is a hot commodity look at what ESPN paid and there was alot of good P/R for 2-3 weeks. NHL probably figured with that deal we can set a new market rate for our games and get something more like $200m for Package B as other networks will figure lets get in on this too,

The only thing they didn't forsee was other networks dragging their feet on the $200m yr price tag. Sort of like some articles have mentioned that NBC has balked. They paid $200m yr for 100% of the NHL rights so why pay $200myr for 40% of NHL rights. That's bad business to share holders. Disney/ESPN knew likely they'd kill of NBCSN and this would happen. Bettaman should of insisted that Stanley Cups rotated years. Doing it the way, where one networks get the balk in consecutive years makes it less attractive vs rotating year to year.

The whole construction of the deal right down to the years shows the cunningness of the construction of the deal on ESPN's half. A seven year deal creates the imbalance that a 8 doesn't. You go a 8 year deal between two networks it's easier to split, 7 yrs established there will be a A Package and B Packages.

This 100%. Let's do a back of the envelope estimate using the $240 million NBC is paying the league this year for exclusive rights. With fewer exclusive games, only having the cup final 3 of 7 years, and the second choice on the conference final, let's assume the "B" package is about 40% of what NBC is currently getting on an exclusive basis. Also, let's assume a 75-80% rights fee bump for a new contract as the last one was negotiated a decade ago.

That puts an estimated value for a "B" package at about $170 million. It's an estimate based on not knowing what exactly is in it, so let's give at a range of say $165 million to $175 million as its probable value. The league is asking for $200 million. That's quite a gap. Over 7 years that comes to a difference between $175 million to $245 million. You are looking at a difference that would be about the same as a full extra season or more for free.

Now maybe ESPN would be willing to close the gap to gain exclusivity (which has value that other bidders can't get). But now from the league's perspective now you are at the mercy of ESPN. You still have one of their lower valued deals, so you still aren't going to get priority. Much of that value for ESPN is keeping it away from other networks to build up. That could leave the league in a 2004 type situation where they get squeezed on the next deal and basically have to pay back that extra value you got on this deal.

 

[OG6ix]

I think the deal with ESPN is extremely short sighted by the NHL because they're really giving ESPN all of the leverage. If I'm NBC, I'm making an extremely lowball offer and working from there. Actually, NBC can probably negotiate a really good deal. So now the NHL is left holding their "d" and the networks basically have them over a barrel because there hasn't been a rush to bid for the package (no pun intended).

ESPN is paying almost double than NBC ... I think the NHL did a much better job choosing espn for the money and reach. NBC doesn't know what they want out of their network in terms of sports. They also just paid 200 million to the WWE for their network to be exclusive to peacock. If anything NBC got a huge bargain in the last NHL deal and the NHL got screwed as TV contractors started escalating. The 2005 deal with NBC was a revenue sharing deal as well so if I'm the NHL I have no sympathy for NBC if they feel crossed or butt hurt. I still think fox gets the B package I always felt that this new deal would be a split between ESPN and FOx. These two channels have consistently been trying to gobble up sports content while NBC seems to focus on golf and the Olympics (excluding the NFL because everyone wants a piece of the pie).

I never felt NBC was aggressive enough in their NBCSN when it came to acquiring in demand content. It's almost like they figured "hey ppl will watch because it's sports." Their studio content was a joke too. All I ever really saw was the Dan Patrick show which was basically a live radio show.

 

[S E P H]

The price ESPN paid for package A is too much for any other network to pay for a proportional priced package B. I think that's why package B negotiations have been going alot longer than expected.

Actually, NBC is quite fortunate how cheap the deal they got from the NHL considering the comparison of ratings versus the NBA and their deal. NBA is paying pretty much four times as much for just the double of ratings at best.

 

[ForumNamePending]

I dunno... Like I said before, after everyone totally whiffed on calling the ESPN deal, all the game theory in these threads feels a bit much, but when in Rome... If the NHL, due partially to ESPN ruthlessly and brilliantly killing off a competitor, is having trouble unloading the "B" package, and on top of that is already facing a total shit sandwich in 7 years time, that's probably bad news for most everyone else moving forward.

The numbers that were recently floated for the next NBA deal seemed downright zany to begin with, but if things are trending towards a buyers market, I have to think the NBA is going to fall well short of their ambitions.

I believe both the MLS and EPL deals are up soon, if the NHL is getting squeezed, if I'm them, I'd be pretty concerned about being squeezed as well. Actually, in the case of the EPL, the US deal is a relative drop in the bucket, so for them it probably barely matters one way or the other.

Actually, NBC is quite fortunate how cheap the deal they got from the NHL considering the comparison of ratings versus the NBA and their deal. NBA is paying pretty much four times as much for just the double of ratings at best.

All things considered, national viewership for the NBA is probably more like 3 or 4x higher than NHL viewership, but the current NBA deal is also worth ~13x more than what NBC is paying the NHL. But ya, I would think the NBC/NHL deal turned out to be be one of the bigger bargains in sports over the past decade.

 

[eddygee]

I dunno... Like I said before, after everyone totally whiffed on calling the ESPN deal, all the game theory in these threads feels a bit much, but when in Rome... If the NHL, due partially to ESPN ruthlessly and brilliantly killing off a competitor, is having trouble unloading the "B" package, and on top of that is already facing a total shit sandwich in 7 years time, that's probably bad news for most everyone else moving forward.

The numbers that were recently floated for the next NBA deal seemed downright zany to begin with, but if things are trending towards a buyers market, I have to think the NBA is going to fall well short of their ambitions.

I believe both the MLS and EPL deals are up soon, if the NHL is getting squeezed, if I'm them, I'd be pretty concerned about being squeezed as well. Actually, in the case of the EPL, the US deal is a relative drop in the bucket, so for them it probably barely matters one way or the other.



All things considered, national viewership for the NBA is probably more like 3 or 4x higher than NHL viewership, but the current NBA deal is also worth ~13x more than what NBC is paying the NHL. But ya, I would think the NBC/NHL deal turned out to be be one of the bigger bargains in sports over the past decade.

I agree no way is NBA getting that amount I could've seen a case back in 2016-2017 when it was peak Steph Curry and the Warriors driving ratings but things have cooled off a bit. The last NBA deal was definitely a over pay but one I doubt ESPN regrets as most nights NBA is in the top 5 ratings in the Top 150 so they are still generating ad revenue.

On MLS and EPL, I think with MLS they are somewhat protected MLS is basically ran by former NFL execs and has alot of NFL ownership in the league. They went the route of spreading network deals vs exclusivity. Meaning they in theory could piece mill their way to a respectable TV deal vs relying and burdening 1 or 2 networks to pay the brunt. They currently have 3 network deals which could be 4 next deal as Turner has expressed interest in getting a MLS rights package and CBS looks to be ramping up their soccer rights properties and are over spending to capture that demographic away from ESPN. See $75m yr Serie A deal. Serie A ratings are 2-3x less than MLS.

US rights were a drop in the bucket for EPL. But as articles have stated the US media rights market along with China has moved up in importance for EPL as money payouts from those markets increased while overall TV money has been in decline since the last deal. The main issue there is while not as bad as the rest of Europe, teams bring in alot of revenue but spend almost all of it on players other Euro leagues spend over by as much as 160% which is why we just had the whole European Super League talk as alot of BIG teams in leagues are getting desperate as they are in major debt. Barcelona and Real Madrid are both said to be in 1.3bil in debt.

Now focusing back to the Premier League believe it or not they have much more to worry/think about because they'll have to access their whole US marketing strategy, do they take the money from ESPN (EPL is said to be giddy about ESPN $$$) if they go with ESPN they are going behind paywall on ESPN+ as they aren't bumping US sports coverage Sports Center etc. especially College Football off ESPN. The coverage will more or less resemble Bundesliga ESPN coverage or if people remember the days ESPN last had EPL rights in 2012 there will be alot of games on 6/7am in the morning after a bass fishing show getting 200k viewers. Which basically puts that league back where they were before NBC got the rights. A popular league for Euro soccer die hards in the States, but a league that before NBC got the rights basically had slightly less viewership than MLS. EPL has already seen viewership stagnate the last few years on NBC peaking in 2015-16 at 514k avg now around 450k on NBC networks with 30+ OTA NBC games inflating that average vs a league like NHL 12 NBC games. NBC created NBC Sports Gold as a way to recoup the money they spent on EPL with NBC exec Rick Cordella citing with the move NBC "made no to little money off EPL rights" " we're trying to find a way of how do we remunerate the rights we paid for"( Google EPL NBC remunerate). So there is much to think about there. Take the money from ESPN and lose a lot of the 30+ OTA game access from NBC that really got EPL the popularity levels it gained since 2013, or do you stick with a misfit of USA Network and a ever decreasing OTA NBC games while more games get shoe horned onto Peacock. CBS sports is also a dark horse but while some are convinced CBS is out of College Football after losing the SEC to ESPN, I'm not I think they bid for PAC 12 or pig up a solid Mid Major Conference as everyone wants in on football be it NFL or College Football. Any scenario the doesn't involve resigning exclusively with NBC for EPL leaves the Premier League back in a pre NBC days level of coverage.

In the end NHL may be best going with FOX if NBC is unwilling to pay that amount. FS1 needs to build up FS1, the properties they have lack synergy and make the channel not a destination channel. Adding more content can change that IMHO.

 

[Spydey629]

So, are we 100% certain Steve Levy is going to be the #1 play-by-play man?

If that is the case, he is going to be pretty busy October through early January:

ESPN will keep Monday Night Football booth of Steve Levy, Brian Griese, and Louis Riddick

 

[jkrdevil]

So, are we 100% certain Steve Levy is going to be the #1 play-by-play man?

If that is the case, he is going to be pretty busy October through early January:

ESPN will keep Monday Night Football booth of Steve Levy, Brian Griese, and Louis Riddick

With exception of opening night, ESPN’s linear television coverage of the NHL likely won’t start until after the NFL season based on the number of games they are scheduled to air. ESPN likely will also be hiring a secondary and tertiary play by play announcer. I don’t think anyone expect Levy (who whoever they install in the #1 spot) to call the games on ESPN+/Hulu. Just the ESPN and ABC games.

 

[Spydey629]

With exception of opening night, ESPN’s linear television coverage of the NHL likely won’t start until after the NFL season based on the number of games they are scheduled to air. ESPN likely will also be hiring a secondary and tertiary play by play announcer. I don’t think anyone expect Levy (who whoever they install in the #1 spot) to call the games on ESPN+/Hulu. Just the ESPN and ABC games.[/
N

Opening Night is exactly what I was fixated on.

Monday Night @ TBD, followed by Opening Night @ TBD sometime in July. I wasn’t even thinking about the fact that ESPN games will be few and far between before New Years.

 

[DaBadGuy7]

 

[Harry Kakalovich]

I don't get ABC OTA unfortunately.

 

[OG6ix]

JR is currently unemployed! When PK Subban retires he will be on one of these channels for sure!

 

[DaBadGuy7]

JR is currently unemployed! When PK Subban retires he will be on one of these channels for sure!

Doubt Roenick gets another job with a broadcasting network. I think Brett Hull and Chris Chelios are the names this tweet might be referencing.

 

[jkrdevil]

My guess is Chelios.

 

[OG6ix]

Doubt Roenick gets another job with a broadcasting network. I think Brett Hull and Chris Chelios are the names this tweet might be referencing.

I hope it's someone new - loved Chelli as a player but he has the personality of a Robot. Hull is meh - would be nice to see some new.

 

[Marshmallow Man]

Would Gretzky do it? He never had a big personality but he’s *still* easily the most recognizable name in hockey to US viewers. Him being associated with ESPN’s coverage would get a lot if headlines in the sports press.

 

[Anisimovs AK]

They should get Torts considering he will not be coaching next year

 

[Jozay]

 

[DaBadGuy7]

As @Fenway has reported in the past

 

[Fenway]

As @Fenway has reported in the past

Sean WANTS it and is willing to work for less money

 

[jkrdevil]

Sean WANTS it and is willing to work for less money

With all do respect to Steve Levy (who I like as a broadcaster overall) McDonough is the better option.