18 August 2005

ESPN fails to match, Comcast gets NHL

The NHL will be on a new network, OLN, this fall as ESPN failed to match Comcast's $135 million offer for NHL broadcasting rights. AP:

"The league finalized a two-year deal with Comcast Corp. -- the owner of OLN -- late Wednesday night after ESPN declined to match the agreement that will pay the NHL $65 million this season and $70 million in 2006-07.

The agreement between Comcast and the NHL was approved by the league's board of governors last week. ESPN, which resumed regular broadcast of NHL games in 1992, had until Wednesday night to match the contract but decided to pass.

"Over the years, thousands of great NHL moments were presented to our fans through the lenses of ESPN cameras,'' NHL commissioner Gary Bettman said. "ESPN was a supportive partner, and both the National Hockey League and ESPN enjoyed a mutually beneficial relationship. We wish ESPN continued success.''

The new deal can be extended up to six years. For the 2007-08 season, Comcast would pay the NHL $72.5 million but that number could go higher based on contingencies."

So it's done. I blogged about the possibility of Comcast getting the deal last week, quoting the reasons that the NHL would benefit from sticking with ESPN. D-lee, who blogs at red and black hockey, refuted the point and said that the NHL on OLN would be a good thing for a few reasons: a network that would treat hockey better than ESPN, proven outstanding sports coverage (Tour de France), and a helping hand from the same guy who helped build Comcast Sports Net, Ed Snider. Snider founded and is still chairman of the Philadelphia Flyers. You have to believe he'll have a say in bringing the NHL to OLN. So why should anyone think that the NHL on OLN won't be as good or better than the NHL on ESPN?

The New York Times echoes the possibilities of growth with Comcast/OLN:

"Since NHL programming is going to be OLN's most important asset, Comcast officials could be willing to spend more money to capitalize on the relationship. For the networks that have had hockey, including Fox and ESPN, investing in growing the hockey audience simply didn't pay off when considering how much more they had invested in other sports programming.

Comcast might also have additional motivation to spend -- to prove to leagues that it is willing to be great partners if leagues should seek to use OLN to build a sports network from scratch. Last year, Comcast offered an unsolicited bid of $66 billion to buy the Walt Disney Co., which owns ESPN. The offer was rejected by the Disney board.

"It seems clear that OLN is setting itself up as a competitor to ESPN," said [George] Bodenheimer [president of ESPN and ABC Sports]. "We welcome it. It will make us better." '

I'm not completely convinced that "We've Got a New Attitude"-OLN is ready to tackle a (cough) top four sport. They are going solely by OLN now; no more Outdoor Life Network. But what is intriguing is that the NHL is trying to re-brand itself and reconnect with fans that have lost faith in a league locked out for over a year, diehards looking to new rule changes to revitalize the game and band-waggoners just looking for a new Gretzky to connect with. OLN is a network trying to be known more for more than Survivor reruns and fishing. It's a great opportunity for two up-and-comers to bring the NHL to the U.S. market in ways ESPN was unable to do. Both sides are nowhere near the top of their respective games, which means the only place to go is up. The NHL gets $5 million more a season than they would have received with ESPN, and OLN gets a chance to broadcast a major sport twice weekly. Right now, it seems to be a win-win situation.

In May, ESPN declined to pick up a $60 million option to broadcast the NHL for another season. And who could blame the network? With the recent contract with the NBA and ratings (for gasp! ESPN original programming) that didn't slip much, if at all, during the NHL's lockout, there is really no need for ESPN to support a struggling sport.

One more positive for NHL fans in the U.S., per the NY Times: "OLN's deal mandates that Comcast carry the NHL Network, which is now only available in Canada, on its digital sports tier." This is great news for diehard hockey fans in the States!

The details are just emerging, but here's a good summary of the deal:
-OLN will have NHL games on twice a week
-OLN will carry games 58-78 regular-season games, conference quarterfinals, the entire conference finals and games 1 and 2 of the Stanley Cup Finals
-Comcast pays $65 million this season, $70 million in 2006-2007 and $72.5 million in the third (optional) season
-Comcast can extend the deal up to six years

(Sources: AP, New York Times)

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Not everyone in the media world thinks it's a good move for Comcast. USA Today's Michael Hiestand views NHL broadcasting rights as a plague to any upcoming sports network:

"In 1988, now-defunct SportsChannel America hoped NHL games would help it cobble together a network of fewer than 10 million households. It paid $17 million annually over three years — twice what ESPN had been paying — to show NHL games in about one-quarter of the households ESPN then reached. That ended up being too much: SCA managed to get a fourth NHL season for just $5 million.

... OLN will join the ranks of networks that tried to develop from NHL's supposedly untapped TV potential. After SCA's run ended in 1992, ESPN regained NHL cable games, partly to help launch ESPN2 in 1993. In 1994, Fox announced a five-year broadcast deal at $31 million annually, partly because it had ventured into TV sports with NFL games — getting hockey meant Fox Sport could become Fox Sports.

But even as Fox's tiny NHL broadcast ratings had been shrinking, Disney replaced Fox with new deals for ABC and ESPN that started with the 1999-2000 season — and cost a whopping $120 million annually. Disney suggested its vaunted corporate synergies could work magic — a type of wishful thinking in vogue in the late 1990s.

Instead, ABC and ESPN got teensy NHL ratings. In the 2003-04 season, ESPN's NHL games averaged 0.5% of its cable TV households — ESPN2's drew 0.2%. ...

Maybe the NHL's heritage — the league formed in 1917, and the Stanley Cup dates to 1893 — casts some sort of spell on networks otherwise awash in made-for-TV sports. It can't be the ratings: Based on recent years, it's possible to project the NHL's national ratings could hit zero in the not-too-distant future. ...

Either way, the NHL seems ready to cash in on its eternally unrealized potential. Again."

Hey, I'm just happy I can watch NHL Network now. This is the promised "new" NHL. Can't we give this a chance, Michael?

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AROUND THE LEAGUE:

-Seeing stars: I must be in a good mood to advertise Dallas Stars coverage. Anyway, check out Dallas Morning News columnist Mike Heika's take on the Stars this season. It's an interesting look at how a former financial powerhouse is adjusting to the new CBA.

-The preview of all previews: NHL.com is launching a 35-day preview of the upcoming season on Sept. 1. This includes a preview of every NHL team, plus a broader look at both conferences and the impact of the CBA. For more details, visit NHL.com.

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