NHL Needs To Broaden Cable Scope for Future
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It’s been a relatively peaceful off-season for the commissioner of the National Hockey League, Gary Bettman. He hasn’t had to deal with a potential recordbreaker who is being investigated by a San Francisco grand jury like his MLB counterpart, Bud Selig, who was forced to watch Barry Bonds chase Henry Aaron’s home run record. Nor has Bettman had to deal with a player who might have organized dogfights like NFL Commissioner Roger Goodell is doing with Michael Vick. Nor has he had to worry about the damage his league might suffer because of a referee who might have either gambled on or shaved points from games like his old boss, NBA Commissioner David Stern, is experiencing with Tim Donaghy.
That is not to say Bettman is free of problems. The Staal brothers, Eric and Jordan, were arrested following a dustup at Eric’s bachelor party in Lusten, Minn. in July. The National Hockey League Players Association is in shambles as well. Bettman and his ownership are also dealing with poor American Nielsen ratings for games on the Comcast-owned Versus Network and NBC’s Stanley Cup Finals coverage.
To that end, Bettman has reached over to the NBA and hired Jody Shapiro to see if he can get the league more eyeballs in front of television sets for NBC and Versus games. Shapiro is the former vice president of business development at NBA TV and once headed Home Team Sports in the mid-Atlantic area, an entity that had Baltimore Orioles baseball, Washington Bullets basketball, and Washington Capitals hockey. In 2001, the channel became Comcast SportsNet Mid-Atlantic.
Shapiro has been around the cable TV block and knows all the players. He also has dealt with cable TV multiple systems operators in getting the NBA network on both basic expanded and digital cable throughout the country. One of Shapiro’s charges is to get an NBA or NFL-type hockey network on MSOs throughout the country. The NHL already has a network up in Canada.
Shapiro may be more important to the league in 2007 than the Pittsburgh Penguins’ Sidney Crosby. The NHL needs TV money, along with exposure from whatever future technologies are available, including a league-wide broadband package for the 30 individual club Web sites. To that end, the NHL is hoping a broadband network developed by the owners of the Islanders and the Rangers called NeuLion will bulk up the Web sites by providing live game content, video features, behind-the-scenes footage, and game highlights that are viewable in multiple video windows or on the full screen.
In 2007, any league still needs cable TV money. The NBA’s TV and broadband deal is split between Disney’s ESPN and Turner Sports with a number of ESPN games assigned to its over-the-air network, ABC, including the NBA Finals. MLB has its deals with over-the-air FOX, ESPN, and Turner Sports. MLB’s broadband deal is with ESPN. The NFL has its mammoth over-the-air TV deals with CBS, NBC, FOX, and ESPN. The NFL also has a Thursday–Saturday late season package that is distributed by its own cable entity, the NFL Network.
The NFL Network’s distribution woes with Comcast and other cable companies may provide Shapiro and the NHL with a blueprint of what not to do in developing a hockey channel. The NFL Network has been banished to digital cable by Comcast, the country’s biggest cable operator, after starting on a basic expanded tier, which most cable subscribers get. The NFL and Comcast were close to an agreement that would have put the late season Thursday–Saturday package on OLN, now Versus. At the last minute, the NFL pulled the games off the table and kept them for the NFL Network. That started a battle between the NFL and Comcast over channel placement. Comcast wanted to put the NFL Network on a sports tier, but the NFL wanted basic expanded cable and sued. Comcast won. The Philadelphia-based cable giant had the right to put the NFL Network on a sports tier.
The NHL deal with Versus is cable-exclusive and also includes a clause that Comcast-Versus would help get the NHL’s network off the ground. The NHL needs Comcast and cannot afford to upset the cable giant. But Comcast also owns the Philadelphia Flyers, making the channel one of 30 partners in the league.
There have been some industry reports that ESPN would like to get back into the NHL in 2008–09 and perhaps take over NBC’s portion of the NHL TV schedule. The sports chairman of NBC Universal, Dick Ebersol, has said nothing. NBCU has an option on NHL games in 2008–09. At the end of the day, it will come down to money. Will NBC make money on the NHL? Will Versus make money on the NHL? And can ESPN make money on the NHL?
It is hard to believe that ESPN, which gets user fees of about $3 a month from 92 million subscribers — thanks to federal laws which allow MSOs to bundle networks and not give subscribers an opportunity to pick and choose networks on an a la carte basis — would lose money on any NHL package. ESPN gets more than $3 billion in user fees annually and then starts charging for advertising.
The prevailing industry thinking is that ESPN can work with Versus in the same way it works with Turner on its baseball and basketball packages. Turner is owned by Time Warner, a cable TV MSO that has signed ESPN to a long-term deal for its cable systems. Despite a buyout attempt by Comcast of Disney in 2004, ESPN has a long-term deal with Comcast for ESPN carriage.
Bettman has had a pretty good off-season in attracting big money into the league. The Nashville Predators owner Craig Leipold has unloaded his money-losing team to local investors. Bill Davidson has sold his Tampa Bay Lightning to a group of investors that includes former Florida Panthers coach Doug MacLean and movie producer Oren Koules.
The league will open the season in the Anschutz Entertainment Group’s O2 arena in London with Anschutz’s Kings taking on the Stanley Cup Champion Anaheim Ducks. Both games are sold out. The league is also part of an International Ice Hockey Federation (IIHF) initiative and will participate in the 2008 Victoria Cup, which will feature two top European teams and an NHL team competing in September 2008.
But Bettman needs a big year out of Jody Shapiro and his staff. Getting a hockey cable network going would help the league in a big way, as would getting a broadband deal that makes sense and maybe even an additional cable TV network on board next year.