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NHL Drops Puck on Shortened Season

After Lockout, Questions Abound about Ratings, Advertising Support 1/18/2013 5:47 PM Eastern

 

With the lockout behind it, the National Hockey League is positioning its truncated 2013 regular season, which faced off on Jan. 19, as a 99-day sprint to the playoffs.
 

In turn, questions abound about just how quickly fans and sponsors will return to the sport that shed 510 games, 41% of its campaign, including the loss of the marquee events, the Winter Classic on New Year’s Day and the All-Star weekend in Columbus on Jan. 26-27.

 
NHL commissioner Gary Bettman and NLHPA chief Donald Fehr finally found common ice.The professional puck circuit reasons that each contest will take on heightened significance, that every one of its 30 clubs will expend maximum effort as each – even those who might not have the talent over the usual 82-game haul – has a realistic chance to make the postseason.
 
Teams have rolled out the red carpet to fans, giving them free access to practice sessions, reducing ticket pricing and offering fan-friendly merchandise and food promotions to entice them to arenas in the U.S. and Canada.
 
Consider the following promotional programs:
 
*Team: Boston Bruins: Tagline: Heart of Hockey
The Bruins will distribute concession vouchers for three complimentary food or non-alcoholic beverages from a select menu to all fans at home games during the month of January. Fans will receive 25% all merchandise in the Boston Bruins ProShop and Fan Zones during home games, with season ticketholders and premium club clients being offered a 30% discount.
 
*Team: Dallas Stars; Tagline: Game On
Looking to build the next generation of fans while filling American Airlines Center, the Stars are teaming with 7-Eleven to create the "Kids Free" Ticket Promotion, an online promotion sans processing fees allowing children ages 12 and younger to receive free tickets with the purchase of a full price ticket in select sections for home games during January and February.
 
*Team: San Jose Sharks; Tagline: Thank You for Your Loyalty
In addition to prize offerings via the club’s Facebook page and Twitter account, all fans attending the Jan. 24 home opener versus Phoenix will receive a Sharks baseball-style cap, courtesy of Citrix. There will also be various giveaways throughout the evening:  jerseys off the backs of 23 players, a pair of season tickets; a Sharks road trip package; and a photo op to be in the team picture.
 
Meanwhile, the GameCenter Live streaming package and In Demand’s Center Ice pay-per-view package are available for $49.99, the lowest price ever, while the 40-million subscriber NHL Network will air the same number of contests –78 – over the next three months it did during over the course of the full 2011-12 season. The league-owned service’s schedule puts the focus on ice action on Thursday, Friday and Saturday nights  
 
Now in the second of its 10-year, $2 billion rights deal, the NBC Sports Group will air 70 contests nationally. The schedule includes 14 exclusive windows (15 games) on NBC, the most regular-season windows ever for the broadcaster, as well as 24 exclusive windows and 26 exclusive games on NBC Sports Network.
 
For their part, regional sports networks owned by Fox Sports (12), Comcast (four) and independents are about to jump over the boards with 40-plus game slates.
 
Indeed, the NHL, after waiting for 119 days to conclude and ratify a 10-year collective bargaining agreement (either side can opt out after the eighth season) that now splits hockey related revenue equally between owners and players (the previous 57%-43% division favored the players), will have at least one game every day until the regular season ends April 27.  Four full playoff rounds will conclude with Stanley Cup Final, possibly extending until June 28. That will likely match the NHL’s championship series against the NBA Finals for national attention and eyeballs in the middle and latter part of the month.
 
All those activities and incentives aside, there is plenty of damage to overcome for the $3.3 billion industry.  The league is running video and print ads extolling the sport’s purity of play, apologizing for the work stoppage, and how it will do all in its power to regain fans’ trust.
 
The NHL didn’t make any of its executives available for this article.
 
However, Jon Miller, president of programming at NBC Sports and NBC Sports Network, summed up the settlement of the protracted labor dispute this way. “Nobody wanted to go through this, but we’re a very resilient group and we’re excited to get going,” he said.
 
More specifically, he noted that NBC Sports Network lost 40 games of its marquee property and All Star Weekend, while the Thanksgiving Friday contest and Winter Classic were casualties on NBC. Together, NBC Sports Group, he said, missed “significant ad dollars and opportunities.”
 
Daniel Ronayne, executive vice president and general manager, MSG Networks, said that with the New York Rangers (41 games this season) and New York Islanders (46), the New Jersey Devils (41) and the Buffalo Sabres (41) in its stable, MSG produces more hockey than any other network. “We’ve missed hockey, no question,” he said. MSG faced off its coverage with a Rangers practice session and its weekly Hockey Night show on Jan. 17, before airing games from all of four of the clubs this weekend.
 
“It’s certainly a shame the lockout lasted so long and it seems like they came close to the ending the season,” said Lee Berke, president and CEO of LHB Sports, Entertainment & Media, Inc. “The hard core hockey fans have been hurting badly, but general sports fans doesn’t pay that much attention to the NHL until the end of the football season. I don’t know how much that group missed the early part of the season.”
 
Noted Chris Bevilacqua, principle at Bevilacqua Helvant Ventures: “It’s like the NBA lockout from last year in a sense. The NHL is coming back during its most important time, in February, March and April,” he said. “It will still have its core base. Some of the more casual viewers might not return immediately. Still, I wouldn’t be surprised if ratings are strong overall.”
 
The strength of ratings will go a long way toward determining how much TV partners will salvage from this season.
Hockey Is Back message
Kyle Sherman, executive vice president of  Home Team Sports – a division of Fox Sports Media Group that reps regional sports networks owned by Fox (12), NBC Sports Group (four) and independents that air NHL contests -- said the company is selling hockey inventory  “off of conservative estimates based on where we finished up last year. When we see the ratings, we’ll adjust our sales forecasts accordingly.”
 
Sherman acknowledged there could be a bit of struggle in January and February, but as the season progresses, he expects to “see sales build, especially with new budgets coming in April and he new quarter.”  Still, HTS is not expecting the RSNs to match last season’s NHL ad numbers.
 
For their part, NBC and NBC Sports Network scored just under $180 million in NHL ad sales during the 2011-12 regular seasons and playoffs, according to Kantar Media. This time around, Miller said the icing of the first part of the season “really hurt our business and the dollars are uncertain for the first and second quarter.” He noted that with “money left behind and switched elsewhere, we’ll  never really know how much we lost.”
 
All the same, Seth Winter, executive vice president for sales and marketing, and his team at the NBC Sports Group have “lots of packages out there.” Miller said NBC Sports Group is working closely with NHL sponsorship group.
 
With CNBC and the NHL Network teaming with NBC and NBC Sports Network, all of the league’s playoff games aired nationally for the first time in 2012. NBC, NBC Sports Network and CNBC averaged 1.24 million viewers, the most in 15 seasons. (NHL Network is not Nielsen-rated.)
 
One of the sponsors who gained from that reach is Enterprise Rent-A-Car, whose deal as an NHL corporate marketing partner expired at the end of last season. Chief marketing and communications officer Pat Farrell said the company was ready to extend its relationship with the NHL but the lockout intervened, before inking a new three-year deal, with options, las week.
 
Farrell said that after the 2004-05 season was wiped out by a labor dispute,  “both fans and sponsors returned quickly. We believe [the NHL] is  going to come back strong and we want to be part of it.  He said the NHL skews well with the younger part of its rental car customer base and works in the U.S. and is strong performer for its operating groups in Canada, “It’s not often that a property will work in both nations,” he said, adding that Enterprise gains great exposure on national and regional TV via dasher boards in 26 of the 30 NHL arenas.
 
Farrell said Enterprise will come out of gate “full bore" on NBC and NBC Sports Network. “It’s a nice level of ad spending, comparable to the past couple of seasons.” Additionally, local operating groups purchase media on RSNs covering NHL clubs. The company is also again presenting the “Hat Trick Challenge” at NHL.com, where users predict hockey results to win prizes.
 
Farrell said it’s nearing the time for NHL and basketball to jump to the forefront of sports media landscape. “Football season is winding down and MLB has yet to start. We think there is a pent-up demand for the NHL,” he said.
 
So does Ronayne, who noted that MSG is anxious to get back to live action on the ice. “The more games on the schedule, the better,” he said. “We love when we have three or four games per night.”
 
Without hockey, Ronayne said MSG and MSG Plus had been running New York Knicks' encores and related programming,  and “lots of originals. MSG also has a robust archive, many years worth of games from the Islanders, Rangers and Devils, which we’ve packaged in different ways. Still, there is no substitute for live games,” he said.
 
Since the lockout ended, Ronayne said “we’ve had lots of conversations with agencies and clients and there has been a very enthusiastic response.” He said MSG has long-term partnerships with its client base and had been able to “make things work for advertisers to a large extent,” with units shifted into Knicks' fare, originals, college sports and morning show Boomer & Carton.
 
Visa and New York Life have schedules with all three of the NHL teams in the metro New York area “Sponsors know that hockey fans are loyal and passionate and MSG is the place to reach them,” Ronayne said.
 
Sherman concurred, noting that the NHL had been building over the past five or six seasons, since the last lockout. “The NHL is a local, more than a national sport. When the puck drops, Blackhawks fans in Chicago are going to want to see their team,” he said.
 
While sponsors with fourth-quarter goals reallocated their spending, Sherman said HTS has “core incumbents year in year out” that account for 30% to 40% of the group’s NHL ad revenues. He cited commitments in such key categories as autos, beer, financial and telecommunications. “Lot of clients are coming back,” he said, mentioning Taco Bell and Miller Coors.
 
Sherman was thankful about the lockout for one thing: “We won’t have to worry about this again for 10 years. Once we get rid of negative buzz, spending will resume.”
 
NBC’s Miller also sees the newly ratified collective bargaining agreement as affording a decade long-opportunity. “We now have a long-term deal. The labor stability is going to help us grow the sport and rebuild momentum,” he said.
 
NBC Sports Group, he explained, began working closely with its partner “when we saw that sliver of hope of hope for resolution.  In mid to late December we began to have dialogue with the league about concepts that were important to us.”
 
He said NBC typically doesn’t air a lot of Saturday games, but it is important to open the season on Jan. 19 by showing the banner raising for the Stanley Cup champion Los Angeles Kings, followed by regional coverage of their game versus the Blackhawks and the Pittsburgh Penguins- Philadelphia Flyers. NBC will also be in the mix on Saturday April 27, the final day of the regular season, “when playoff spots and seedings are determined,” said Miller.
 
Hockey Day in America is also on the schedule again, this time on Feb. 17, when NBC will feature a Penguins-Sabres and Kings-Blackhawks doubleheader, followed by a Washington Capitals-Rangers nightcap on NBC Sports Network.
 
Miller also said it was essential to have Sunday night presence on NBC Sports Network. He said that given the success of Sunday Night Football – TV’s top show -- sports fans are accustomed to a live game in that slot. To that end, NBC Sports Group’s first contest of the season, Chicago-Phoenix on Jan. 20 at 10 p.m. (ET), is timed for after AFC Championship game. The national cable network has Sunday night action throughout the season.
 
NBC Sports Network is looking to build on its exclusive Wednesday windows from last season, by adding on a “rivalry night” component. “We’re going to be featuring two teams that don’t like each other very much. That’s what makes hockey so special,” said Miller of such matchups as Washington-Philadelphia, Philadelphia-Pittsburgh, Boston-New York, Boston-Montreal and Los Angeles-Detroit.
 
Berke, for one, is a fan of that play. “If the Kings get off to a fast start, there will be some momentum. The Original Six teams in the big markets will carry the puck. The rivalry games on NBC Sports Net are compelling,” he said, pointing out that some RSNs could suffer, depending on whether squads falter in the early going. “If a team falls out of the hunt with a slow start, they’re never going to get that audience back this season.”
 
Likening the NHL to the NBA’s lockout-abbreviated campaign last year, Berke said the “truncated season makes each game more valuable and meaningful. That should generate interest. I think ratings are going to hold up solidly.  By this time next year, the lockout will be a distant memory,” he said.
 
The NHL, its TV partners and sponsors can only hope that’s the case.
September