NHL Season cancellation costs 400 million in ad revenue

[devildan]

NHL SEASON CANCELLATION COSTS $400 MILLION IN AD REVENUE
Corporate Sponsors Reassess Long-Term Commitments
February 22, 2005

http://www.adage.com/news.cms?newsId=44382

Click to read more...

 

[GKJ]

need to register...


can you put up any important parts without posting the entire article?

 

[Old Hickory]

Use these to log in

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adage1

For almost any site like this that you need to register. Go to bugmenot.com and they'll have passwords

 

[krandor]

Not good. Now that TV networks and other places see what a season without hockey is like for them, how many will want to come back?

 

[Hoek]

Use BugMeNot.com

Marketers had already shifted ad dollars away from the NHL to other sports back in September. Now, two corporate partners who asked not to be identified told Advertising Age last week they will reconsider their sponsorships with the league.

"There was a lot of internal discussion here, even before the lockout, about whether enough of an audience was there to justify what we've done with the league," said a marketing officer from one of the companies. "I'm sure those discussions will be revived."

"Our sponsorship is an effective way to reach the wide variety of adult fans who follow the sport, and we're confident this will continue in the future," Tony Ponturo, vice president of global media and sports marketing for Anheuser-Busch, said in a statement.

Other sponsors either declined to comment or did not return calls.

Sounds like the bigger sponsors are still on board, but as you would figure the league is going to lose some business.

 

[mr gib]

Not good. Now that TV networks and other places see what a season without hockey is like for them, how many will want to come back?

thats another job for gary - how do you think he'll do? -

 

[Digger12]

Use these to log in

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adage1

For almost any site like this that you need to register. Go to bugmenot.com and they'll have passwords

Thanks...

As for the article, I wonder how much of this loss will be passed on to whatever future cap offer the owners present to the players.

Say the NHL loses 20% of its revenue streams for next season, IMO a conservative estimate. Out of 2.1 Billion, that's 420 million. That's 14 million/team, so maybe the NHL lowers its salary cap offer of 42.5 to 28.5 in order to offset the loss? Good job, NHLPA!

 

[GKJ]

thats another job for gary - how do you think he'll do? -

How did he do with seasons WITH hockey?



This is money the owners will never see again. People can say what they want, with a season, the NHL would not have lost $400M. Anyone who thinks they would, please save your time.

 

[GKJ]

Say the NHL loses 20% of its revenue streams for next season, IMO a conservative estimate. Out of 2.1 Billion, that's 420 million. That's 14 million/team, so maybe the NHL lowers its salary cap offer of 42.5 to 28.5 in order to offset the loss? Good job, NHLPA!

It's not the PA's fault the owners found it necessary to cancel the season. We know the players wanted to play. If the owners are such great businessmen, then they should have come up to $45M and then made money from the lockout. Silly owners.


The labor board will see this and rule accordingly.

 

[krandor]

As for the article, I wonder how much of this loss will be passed on to whatever future cap offer the owners present to the players.

That is the problem now. How can either side at this point have any idea what would be the proper numbers for a soft cap or a hard cap?

Once businesses and corporations remove the NHL from their advertising budgets, it becomes much harder to get them to put it back in.

 

[mr gib]

How did he do with seasons WITH hockey?



This is money the owners will never see again. People can say what they want, with a season, the NHL would not have lost $400M. Anyone who thinks they would, please save your time.

one image i can never forget - have you seen the picture of bettman with david stern in the nba office's when he was with the nba? - circa 1990 - a mere boy with a terrible mullet - i supposed that's not fair but this guy... - and there is so much more to lose -
http://www.forbes.com/business/forbes/2004/1129/124.html

 

[Digger12]

It's not the PA's fault the owners found it necessary to cancel the season. We know the players wanted to play. If the owners are such great businessmen, then they should have come up to $45M and then made money from the lockout. Silly owners.


The labor board will see this and rule accordingly.

Fault is irrelevant at this point. The owners simply won't have the revenue streams to justify a 42.5 million dollar cap, so why shouldn't they adjust their offer accordingly?

As for the players wanting to play, obviously they didn't want to play that badly if 42.5 was too cheap for their sophisticated tastes.

 

[Greschner4]

Fault is irrelevant at this point. The owners simply won't have the revenue streams to justify a 42.5 million dollar cap, so why shouldn't they adjust their offer accordingly?

As for the players wanting to play, obviously they didn't want to play that badly if 42.5 was too cheap for their sophisticated tastes.

It can't be more obvious now that the owners are perfectly willing to tear down the whole league and start from scratch, can it?

A lot of sponsors are going to abandon the league, yes. But there's very little indication that the owners have any problem with that. There's no reason to assume that they do.

 

[mooseOAK*]

How did he do with seasons WITH hockey?



This is money the owners will never see again. People can say what they want, with a season, the NHL would not have lost $400M. Anyone who thinks they would, please save your time.

With a shortened season that $400 million would have been pro-rated accordingly.

 

[CarlRacki]

How did he do with seasons WITH hockey?

He got the NHL its first ever national broadcast contract in the U.S. and the two largest TV contracts in league history, bringing in more than $755 million to owners since 1995. In fact, the 1999 deal with ABC represented a 386 percent increase over the previous deal's value. How many leagues have seen comparable growth?
Those darn facts.

 

[SuperUnknown]

It's not the PA's fault the owners found it necessary to cancel the season. We know the players wanted to play. If the owners are such great businessmen, then they should have come up to $45M and then made money from the lockout. Silly owners.


The labor board will see this and rule accordingly.

The players know that without a season revenues are going downhill.

Imo, this proves the owners are ready to go as far as they need to in order to get a CBA that works for them. They contend that even with these revenues they can't raise the bar to $45M (well not with the PA's other demands anyway).

The problem the PA has is they are the ones who are the most affected by that loss of revenue. Since people have been saying this before the season, they are accountable for being fools and playing the "wait more, lose more" game. Analysts thought revenues would be down to $1.5B next year. That's a prediction, not something 100% sure. With this, revenues may be down to $1.3B, which leaves less money to be divided between players and owners.

Why would the owners agree to a CBA where they still make losses just to preserve the PA's revenue? It doesn't make from their point of view. From the PA's point of view, what doesn't make sense is that they don't even want to save their revenues, all they want is an agreement that favors them, regardless of what they get in the end (which is going to be less money + all the money lost during the process). The rank and file players are uninformed and are being misled in the biggest loss for any union ever.

Do you really think it's a coincidence that Meehan's players have started lobbying for more negotiations? I don't think it is. Meehan's intelligent and he saw that the players had nothing to win, everything to lose to not get an agreement now. He explained the situation to his clients and now at least there are a few players out there educated questioning their association.

 

[Strangelove]

This is money the owners will never see again. People can say what they want, with a season, the NHL would not have lost $400M. Anyone who thinks they would, please save your time.

Well the players lost 3 times that amount: $1.2bil.

That is money they'll never see again.

The owners may have lost $400mil, however that may turn out to be short-term loss for long-term gain (a better CBA will mean Billion$ to them long-term in revenues & *franchise values*).

So I disagree that the owners "will never see that money again".

 

[Icey]

NHL SEASON CANCELLATION COSTS $400 MILLION IN AD REVENUE
Corporate Sponsors Reassess Long-Term Commitments
February 22, 2005

http://www.adage.com/news.cms?newsId=44382

Tell me again how the owners are losing nothing in this lockout? Tell me again how the owners can afford to sit out indefinetly?

The owners need corporate sponsorship more than they need the casual fan who won't pay $30 for a ticket.

They could fill the arena everynight with the casual fan, but if they lose the corporate sponsorship, they will be forced to close their doors and that is reality.

 

[nyr7andcounting]

He got the NHL its first ever national broadcast contract in the U.S. and the two largest TV contracts in league history, bringing in more than $755 million to owners since 1995. In fact, the 1999 deal with ABC represented a 386 percent increase over the previous deal's value. How many leagues have seen comparable growth?
Those darn facts.

That can just as much be a result of the growth of the economy in the 90's rather than Bettman's work as commissioner. You can't actually tell me you think Bettman has done a good job for 10 years.

And where is the TV contract now? He lost the ABC contract you talk about and turned that into an NBC deal that has no guaranteed money. So despite any growth you talk about where is the TV deal at now? Pretty much back to where it started and on the verge of losing ESPN.

 

[Digger12]

Tell me again how the owners are losing nothing in this lockout? Tell me again how the owners can afford to sit out indefinetly?

The owners need corporate sponsorship more than they need the casual fan who won't pay $30 for a ticket.

They could fill the arena everynight with the casual fan, but if they lose the corporate sponsorship, they will be forced to close their doors and that is reality.

I'm sure the players looked at this the same way 10 years ago, and used this reality to their advantage.

Unfortunately for them, this is a much different ownership group now, a group that relies far less on their hockey teams to put food on the table and keep them awash in yachts and caviar. If their hockey teams and the NHL ceased to exist, they'd still be billionaires.

They may not be willing to wait indefinitely, but I'll bet they can wait a LOT longer than the players can.

 

[Lil' Jimmy Norton*]

It's not the PA's fault the owners found it necessary to cancel the season. We know the players wanted to play. If the owners are such great businessmen, then they should have come up to $45M and then made money from the lockout. Silly owners.


The labor board will see this and rule accordingly.

The NLRB won't , I repeat won't, even touch it.

 

[CGG]

Well the players lost 3 times that amount: $1.2bil.

That is money they'll never see again.

The owners may have lost $400mil, however that may turn out to be short-term loss for long-term gain (a better CBA will mean Billion$ to them long-term in revenues & *franchise values*).

So I disagree that the owners "will never see that money again".

Gaining a better CBA will not necessarily mean billions to the owners. They are taking much more of a risk by cancelling the season than bargaining out whatever agreement they could have last week. They may never get back to where they were.

If revenues get cut in half, even if the league gets their dream CBA, they're screwed. How does it increase a franchise value when the Ducks, who used to haul in $80 million a year, can now only get $35 million in revenues? If revenues are halved then salaries might be cut in half as well, but the serious problem is that the remainder of a team's costs don't get cut in half.

No one is offering a rollback for GM and coaches salaries, or Gary's salary. Or rink maintenance or travel costs or front office staff. These fixed costs will now eat away a larger chunk of a team's revenues.

Plus, assuming revenues do get chopped in half, it won't be an even cut. The Leafs will pretty much stay the same, whereas the weaker teams might lose a lot more than 50% of their revenues. It only increases the gap between healthy and sick teams. And with the stubborn refusal to share revenues, this season cancellation will be a lot more deadly for the small market teams than a theoretical $42.5 or $45M salary cap would have been.

The owners voluntarily doing this to themselves is just as stupid as the players' stance to allow this season to go down the toilet.

 

[CarlRacki]

That can just as much be a result of the growth of the economy in the 90's rather than Bettman's work as commissioner. You can't actually tell me you think Bettman has done a good job for 10 years.

And where is the TV contract now? He lost the ABC contract you talk about and turned that into an NBC deal that has no guaranteed money. So despite any growth you talk about where is the TV deal at now? Pretty much back to where it started and on the verge of losing ESPN.

The economy grew 386 percent between 1994 and 1999?

Are you so anti-Bettman that you can't face facts and give a little credit for what he's done right? The fact, whether you like it or not, is that Bettman helped put $755 million dollars into the league by landing the NHL its first national television contracts in the U.S. this benefited players most of all because it allowed for their skyrocketing salaries. Spin it all you want, but a fact is a fact.

Do I think Bettman's done a good job? Not really. But he hasn't done as poorly as some around here want to claim. He gets all the blame for expansion, but the fact is that five of the nine teams added in the 1990s were admitted to the league before he became commissioner. Two of the Bettman expansions were no-brainers. Minnesota is obviously a hockey town and Atlanta is a top 10 market (and the only one the NHL was not in previously). Columbus may be questionable, but has done very well in building a fan base. Nashville is the only real question mark.

Where Bettman's failed, IMO, is in labor relations (duh) and in marketing the game. In these areas he deserves an F. But in terms of growing the sport and its revenues, he's done a fine job.

 

[SuperUnknown]

Tell me again how the owners are losing nothing in this lockout? Tell me again how the owners can afford to sit out indefinetly?

The owners need corporate sponsorship more than they need the casual fan who won't pay $30 for a ticket.

They could fill the arena everynight with the casual fan, but if they lose the corporate sponsorship, they will be forced to close their doors and that is reality.

The problem the players have is that while the owners "lose" to the lockout, in the end it's the players that are going to suffer from it. The owners lost $400M in sponsorship, this means they have to cut their costs by $400M. Where do you think they're going to cut when 70% of their costs last year were the players?

 

[Greschner4]

He got the NHL its first ever national broadcast contract in the U.S. and the two largest TV contracts in league history, bringing in more than $755 million to owners since 1995. In fact, the 1999 deal with ABC represented a 386 percent increase over the previous deal's value. How many leagues have seen comparable growth?
Those darn facts.

But at the same time he put teams in ridiculous markets and didn't adapt to the stifling (and previously illegal) defense that turned a formerly fast-paced and exciting game played in front of passionate fans in charming arenas into a boring game played in too big cookie-cutter arenas in front of people who didn't know a puck from a ****.

All of which eroded practically all of the league's TV value you cite.