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The NHL and the players' association
have agreed to end their 306-day lockout. Now hockey's big challenge is finding
a new national cable TV partner.
Should it fail, the already battered sport may risk a slip
into total oblivion, with fans already angry over the lockout and
advertisers feeling burned by the canceled season.
In May, ESPN, which had carried the hockey league since 1992,
declined an option worth a reported $60 million in rights fees for
the 2005-06 season. The league does have a revenue-sharing broadcast
agreement with NBC, but that is for only a limited number of games plus
the Stanley Cup Finals. Most games are carried on regional sports
networks such as FSN, NESN or YES.
"With
exception of the broadcast networks, ESPN is like being in the cannon of
legitimate sports events," says Bob Thompson, the director of Center
for the Study of Popular Television at Syracuse University. "Losing ESPN is like you suddenly lost a major American seal of
approval."
Neal Pilson, the former head of CBS Sports and now the
president of Pilson Communications, tells Media Life he thinks the league
will work out a cable deal.
"I
know there are cable carriers that want to carry the NHL," he says.
"I'm confident the league will have a national contract."
After months of worrying whether there would even be a
2005-06 season, the NHL can now turn its attention to getting that
contract.
The agreement announced yesterday by the NHL and the NHLPA is
a six-year deal that can be voided by the players after four years. It includes a salary cap of $39 million and a maximum salary that tops out
at 20 percent of the cap, or $7.8 million. It also includes a
minimum salary of $450,000 and limits on contracts for rookie players.
The two sides agreed to a complicated formula that guarantees
the players 54 percent of defined league revenues, but holds 15 percent of
it in escrow. The players agreed to a 24 percent rollback of
existing salaries, a concession they initially offered back in December in
an effort to jump start talks and save the 2004-05 season.
Additionally, rules changes are expected to be included in
the deal that could make the game more exciting on TV. None have
been announced yet, but they are reported to include smaller goalie
equipment, restrictions on puck-handling, larger nets and possibly even
overtime shootouts.
That could help get the cable contract. All
hockey's competitor leagues – football, baseball, basketball, NASCAR and even
Major League Soccer – have national cable TV deals. Meanwhile, sports
networks like ESPN and FSN are finding that niche programming such as
poker has cheaper productions costs and draws similar if not better
ratings.
The
NHL will have an even harder time reaching out to casual fans without a national cable partner.
Hardcore fans will tune in to regional sports carriers, but casual fans
will be harder to capture.
The
exposure the league had to many fans on ESPN, which often led from the 6
p.m. "SportsCenter" right into an NHL game, will be difficult to reproduce.
"There
a lot of people for whom ESPN is the default channel," says Thompson. "The fact [the NHL] was on ESPN brought you certain amount of viewers
just because they're watching ESPN."
Pilson
notes that the league makes more money from regional TV deals than from
the national contact. So while securing a national partner for the
NHL is important for exposure and the image of a big-time league, it will
not translate to big revenue.
"I
think it's an important broadcast outlet for the league," he says,
"but could it survive without it? Of course it could."
Pilson
says if a new deal emerges, it will probably include fewer games than ESPN
carried in 2003-'04. It also will likely include a much lower rights
fee or ad revenue sharing similar to the one the league has with NBC.
An
ESPN spokeswoman tells Media Life that the network is open to a new deal
with the league provided that both sides equally share any risk.
Calls
to TNT and Spike TV, both rumored to be considering adding a new NFL Thursday
night TV package to their lineups, were not returned.
A
new deal could include coverage of the Stanley Cup Finals. Currently NBC is scheduled to air games three through seven, and
ESPN was to air games one and two. Those first two games could shift
to NBC or could be included in a deal with a new cable partner.
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