NHL Commissioner Gary Bettman presents the Stanley Cup to captain Steven Stamkos #91 of the Tampa Bay Lightning after Recreation Six of the NHL Sta
NHL Commissioner Gary Bettman presents the Stanley Cup to captain Steven Stamkos #91 of the Tampa Bay Lightning after Recreation Six of the NHL Stanley Cup Remaining between the Tampa Bay Lightning and the Dallas Stars at Rogers Place on Sept. 28, 2020 in Edmonton, Alberta, Canada.
Dave Sandford | Nationwide Hockey League | Getty Photographs
Name it a aim scored for the Nationwide Hockey League. And if the league can full two extra enterprise transactions, it may very well be in for a hat trick.
Media pundits imagine the rights bundle of NHL’s new seven-year cope with ESPN is value $400 million per yr. That is a rise from the roughly $200 million per yr that NBC Sports activities is paying, and the NHL is poised to lure much more cash.
NHL Commissioner Gary Bettman known as the ESPN deal “groundbreaking,” including the league would “profit from the incomparable energy, attain and affect of The Walt Disney Firm and ABC/ESPN.”
“It units a brand new normal in delivering our sport to essentially the most passionate and tech-savvy followers in sports activities within the methods they now demand and on the platforms they use,” Bettman stated in a press release final week.
By returning to Disney, the NHL will get its content material again on ESPN for the primary time since 2004. However post-breakup, ESPN continued to worth NHL content material by centering protection round longtime analyst Barry Melrose.
Dan Cohen, senior vp of Octagon’s World Media Rights Consulting division, stated the NHL may solicit greater than $600 million yearly for its total bundle. He added that the NHL “can be greatest served to resume its different rights bundle with NBC, who has invested closely in advertising and marketing the NHL and who can provide a tri-cast distribution mannequin.”
“Now they’re making choices about sports activities much less so primarily based on govt choice and extra so primarily based on what objective the content material will serve,” Cohen stated. “One thing that has as a lot quantity as hockey, they’ll go along with a tri-cast mannequin throughout ABC, ESPN, and ESPN+/Hulu.”
ESPN will get premium NHL playoff contests, All-Star occasions and streaming rights. ABC will host 4 Stanley Cups. Streaming providers ESPN+ and Hulu may also obtain unique video games. That is the tri-cast mannequin that Cohen predicts different media firms will use, permitting them to place second-tier sports activities content material behind paywalls to draw the diehard followers to subscribe to streaming providers.
And with sports activities the principle attraction upholding the cable mannequin, serving to to gasoline streaming, the NHL revived its rights payment with the identical community that devalued it greater than a decade in the past. Now the NHL is auctioning off the opposite half of the bundle.
Joe Pavelski #16 and the Dallas Stars get a puck previous Pekka Rinne #35 and the Nashville Predators throughout the Bridgestone NHL Winter Basic at Cotton Bowl on January 01, 2020 in Dallas, Texas.
Richard Rodriguez | Getty Photographs Sport | Getty Photographs
NHL and NBC want one another
NBC is the frontrunner to return to NHL. There have been whispers that CBS Sports activities was and that Fox Sports activities was lurking, too. However CBS Sports activities chairman Sean McManus downplayed any curiosity within the NHL on a media name final week. And Fox had the NHL way back in a failed experiment that includes a glowing puck.
Followers and company sponsors are already used to NBC’s NHL protection. NBC is transferring sports activities to the USA Community in an effort to resemble a Turner Sports activities-like property, which suggests NHL video games will attain extra households. NBC cannot afford to lose hockey, which might match nicely in its new Peacock streaming service.
Cohen prompt NBC may pay between $185 million and $225 million per yr to retain NHL rights. The bundle would come with video games on Peacock, the Winter Basic, postseason video games and three Stanley Cups on NBC. He known as the bundle “truthful market worth,” since NBC can be paying extra whereas shedding the NHL content material it owned when Comcast bought the rights in 2005 for roughly $70 million per season.
“NBC does not make investments over the past decade into the NHL and let it go particularly after they want dwell sports activities, they usually want weeknight programming,” Cohen stated. “NHL followers are accustomed to discovering NHL content material on NBC and it has invested a ton of in advertising and marketing and promotion. I might be shocked to see them exit as a NHL accomplice.”
Discussions between the 2 events are ongoing, in line with an individual acquainted with negotiations.
The community would must be cautious about overpaying, although, because the Premier League’s rights are additionally near renewal. Cohen stated that bundle may very well be value $300 million per yr, up from roughly $167 million per yr; a part of a six-year $1 billion extension in 2015.
“And after that, they will should determine what they wish to do with NASCAR, for which they’re paying $440 million a yr,” Cohen stated.
However because the NHL expands its media rights, it may face media contraction, too. Its NHL Community may shutter since there is not a lot want for the channel as shoppers proceed to chop the twine.
“That hasn’t been worthwhile,” Cohen stated of the NHL Community. “In the event you bear in mind, Disney ran that community, and it returned to the NHL final yr. So, now the NHL has to run their very own linear community in a shrinking cable world, they usually’ve simply bought away half their rights to ESPN. The NHL must get inventive to extend the worth of NHL Community to its MVPD companions.”
Disclosure: Comcast owns NBCUniversal, which is the mother or father firm of CNBC.