The good news: 14 of the 22 U.S. teams with available ratings had more people watching local NHL broadcasts than last year. The bad: If you add up the bottom seven teams’ households, they still fall short of the Pittsburgh Penguins. The strange: The Buffalo Sabres, who missed the playoffs in 2008-09 had 18 percent less viewers on average in 2009-10 and the San Jose Sharks, who spent most of the season at No. 1 in the Western Conference (and finished first) also saw a significant drop (20 percent). Also in the strange department, the St. Louis Blues, who missed the playoffs, brought in 20.8 percent more viewers than last season.
Before we get to all the numbers, here’s a look at how the best and worst teams compare to other major league sports (other sports based on last season):
Here’s how the top rated teams stack up:
Pittsburgh Penguins rank 3rd for local rating in all sports behind the Boston Red Sox and Cleveland Cavs. They rank 13th in total households sandwiched between the Seattle Mariners and the Chicago Blackhawks.
Buffalo Sabres draw similar local ratings as the San Antonio Spurs and Minnesota Twins, ranking 8th overall among all major league sports teams. The mid-market Sabres rank 45th in the total households category, drawing similar amount of households as the Portland Trail Blazers and San Diego Padres.
Detroit Red Wings stand at 13th with a 4.21 local rating right behind the New York Yankees and in front of the Chicago Cubs. They rank behind the San Francisco Giants at 19th and in front of the Chicago White Sox.
Here’s how the bottom looks:
Florida Panthers are the worst team among all major sports teams that report ratings. Four of the bottom five in households in all professional sports are NHL franchises. The Charlotte Bobcats, who have the fourth least more than double the Panthers. In the rating share department, the New Jersey Nets stand just above the Panthers with a 0.29. In the Miami market, which is the 17th largest in the U.S., the Florida Marlins have more than 12 times the rating the Panthers have.
Western / Southern struggles. The Anaheim Ducks scored lower ratings than the Los Angeles Clippers in LA. In the Northern California area, the Warriors had more watching than the San Jose Sharks. The Phoenix Coyotes scored 2.56 lower than the Phoenix Suns on TV. The Thrashers scored 1.33 lower than the Atlanta Hawks.
SportsBusiness Daily reported that overall attendance in the NHL is down 2.2 percent from last season. In December, Biz of Hockey looked at how attendance was doing and found that it was down almost 5 percent from where the league finished in '09. The second half of the NHL season saw a sizable recovery possibly due to momentum gained from the Winter Classic, Olympics and playoff battles. And, despite the overall drop for the league's worst draw the Phoenix Coyotes, the team finished 12.4 percent higher than its first-half percentage. The Coyotes weren't the only team to see a second-half boost, the Nashville Predators finished 7 percent higher than they stood at mid-season while the Tampa Bay Lightning, Los Angeles Kings and Carolina Hurricanes finished with the overall numbers drawing just over 5 percent more fans than in the first half indicated. Only two teams saw second-half losses, the New York Rangers and the Atlanta Thrashers, both teams finished under 1 percent less than they were at mid-season.
Overall, the league drew finished 2.24 percent higher at the end of the season than where it stood at mid-season. Here's a look at the numbers, starting with the percentage of the stadium that was filled, through Dec. 2009 and where NHL teams' attendance finished the season (all numbers according to ESPN:
Team
First Half
Season End
% chg
First Half AVG.
Season End AVG.
Blackhawks
105.1
108.3
3.2
20668
21356
Canadiens
100
100
0
21273
21273
Red Wings
95.3
97.4
2.1
19128
19546
Flyers
99.6
100.2
0.6
19413
19535
Maple Leafs
102.3
102.5
0.2
19224
19260
Flames
100
100
0
19289
19289
Senators
96.2
98.8
2.6
17790
18269
Canucks
102.1
102.1
0
18810
18810
Wild
100.7
101.9
1.2
18197
18415
Blues
97.7
98.6
0.9
18712
18883
Sabres
98.2
99.1
0.9
18360
18529
Rangers
100
99.3
-0.7
18200
18076
Capitals
100
100
0
18277
18277
Stars
91.6
92.9
1.3
16978
17215
Sharks
100.3
100.4
0.1
17553
17558
Bruins
97.9
99
1.1
17193
17388
Ducks
86.5
88.3
1.8
14848
15168
Penguins
100.6
100.7
0.1
17051
17078
Oilers
100
100
0
16839
16839
Hurricanes
76.3
81.4
5.1
14286
15240
Lightning
72.9
78.4
5.5
14403
15497
Kings
88.2
93.6
5.4
16325
17313
Devils
84.3
88.2
3.9
14854
15546
Panthers
74.6
78.7
4.1
14352
15146
Blue Jackets
80.7
85
4.3
14641
15416
Avalanche
76.1
77.5
1.4
13707
13947
Predators
80.2
87.5
7.3
13731
14979
Coyotes
56.1
68.5
12.4
9825
11989
Thrashers
73.7
73.4
-0.3
13667
13607
Islanders
75.5
78.1
2.6
12303
12735
Totals
90.42
92.66
2.24
16663.23
17072.63
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Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter
All this talk must be making him Ilya. One thing is clear about Atlanta Thrashers winger Ilya Kovalchuk: he’ll be next on the list of famous departures from Atlanta sports teams. The list includes names such as Dominique Wilkins (Hawks), Deion Sanders (Falcons) and more recently Dany Heatley and Marian Hossa of the Thrashers.
Kovalchuk (who will be an unrestricted free agent after this season) and the Thrashers are reportedly unlikely to agree to a long-term extension, which leaves Atlanta with the option to trade Kovalchuk or let him go and get nothing in return. Rumors are aplenty. Monday, Jan. 11, Yahoo! Sports Mark J. Miller wrote that the Los Angeles Kings were a front runner. The King’s general manager Dean Lombardi took a personal trip to the ATL to see Kovalchuk play.
Other rumors include the Boston Bruins, Chicago Blackhawks, Detroit Red Wings and Vancouver Canucks. Then there were seven. By Friday, Jan. 15, another contender for the league’s leading scorer since 2002: the New York Islanders. The New York Post reported that GM Garth Snow did not rule out the possibility of jumping into the mix.
Whoever elects to pick up the monster goal scorer will need to have an agreement already in place to sign him long-term. With so many teams in the race, we may not know until the final hour. The trade deadline this season is March 3. Take a look at how things turned out in the past two seasons for some notable upcoming unrestricted free agents who were traded at the deadline:
Trade Deadline ’09:
Steve Montador: The defenseman was dealt from the Anaheim Ducks to the Boston Bruins at the ’08-’09 deadline for Petteri Nokelaine. The Buffalo Sabres signed Montador in the off-season to a 2-year, $3.1 million deal.
Ales Kotalik: Traded by Buffalo to Edmonton at last season’s deadline, Kotalik eventually signed in the off-season with the New York Rangers to a 3-year, $9 million contract.
Nik Anthropov: Rangers traded for Anthropov from the Toronto Maple Leafs for an ’09 draft pick. Anthropov was eventually signed by the Atlanta Thrashers to a 4-year, $16.25 million contract.
Dominic Moore: Traded from the Leafs to the Sabres at the deadline for a second-round pick. Moore signed before the ’09-’10 season with the Florida Panthers to a 1-year, $1.1 million deal.
Trade Deadline ’08:
Brian Campbell: Sabres traded defenseman Brian Campbell to the San Jose Sharks for a first-round draft pick and winger Steve Bernier. Campbell later signed an 8-year contract with the Chicago Blackhawks for around $7 million per season.
Cristobal Huet: Huet was dealt to the Capitals for a second-round pick. Once he hit free agency, Huet signed a 4-year, $22.4 million agreement with the Chicago Blackhawks.
Brad Stuart: After being traded from the Kings to the Detroit Red Wings at the deadline, Stuart decided to stick with the Wings at the price of $15 million over four years.
If you are noticing a trend, it’s that most of the players don’t resign with the team that trades for them. So, if Ilya gets traded, his suitor could possibly be a quick-fix team.
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Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter
If Vancouver Canucks forward Alex Burrows played in the NBA, he’d be looking at a $25,000 fine. In the NHL, it’s $2,500. His crime? Burrows accused referee Stephane Auger was calling penalties in order to “get back at him” for a hit Burrows made in early December. What tipped off Burrows? First, Auger called the three penalties against Burrows in the third period of a 3-2 loss to Nashville. Second, Burrows says Augar told him he was going to.
After the game, Burrows said, “"It was personal. It started in warm up before the anthem. The ref (Auger) came over to me and said I made him look bad in Nashville on the Smithson hit (during a game Dec. 8, 2009). He said he was going to get me back tonight and he did his job in the third.”
Burrows said he thinks Auger should sit out the rest of the season. NHL Senior Executive Vice President of Hockey Operations Colin Campbell did not agree. He issued the following statement: “
The National Hockey League will not tolerate the personal nature of the comments Mr. Burrows directed at Referee Auger or the fact that he brought into question the integrity of both the official and the game.
"We have determined that Mr. Burrows’ account of Referee Auger’s comments to him before the game, and specifically Burrows’ suggestion that these comments indicated bias against the player or the Vancouver team, cannot be substantiated. While Referee Auger engaged the player in a brief conversation prior to the opening face-off, I firmly believe that nothing inappropriate was said and that Referee Auger’s intentions were beyond reproach."
Any time fixing, make-up calls or ref-player beefs arise, we can’t help but bring up former NBA referee Tim Donaghy. Whether you believe Donaghy or not, he brought possibility of dirty refs to the forefront. For example, Donaghy said in his book:
“As it turned out, Denver didn't need the win after all; they locked up a spot in the playoffs before they got to San Antonio. In a twist of fate, it was the Spurs that ended up needing the win to have a shot at the division title, and Bavetta generously accommodated. In our pregame meeting, he talked about how important the game was to San Antonio and how meaningless it was to Denver, and that San Antonio was going to get the benefit of the calls that night. Armed with this inside information, I called Jack Concannon before the game and told him to bet the Spurs.
“To no surprise, we won big. San Antonio blew Denver out of the building that evening, winning by 26 points. When Jack called me the following morning, he expressed amazement at the way an NBA game could be manipulated. Sobering, yes; amazing, no. That's how the game is played in the National Basketball Association.”
Quick note about this game: The Spurs shot 53 free throws compared to Denver’s 18 and won the game 93-67. Six players for the Nuggets had more than four fouls.
The lack of a harsh penalty against Burrows might not be meant to be an admission of guilt, but one could take it that way. Burrows claimed that Auger’s ego caused him to make bias calls. At very least, Donaghy proved to use refs can be egotists, too.
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Despite Canadian billionaire Jim Balsillie’s recent failed attempt to buy the Phoenix Coyotes and re-locate the franchise to Hamilton ON., there is plenty of activity and conjecture which suggests that Canada could yet be home to one or more struggling presently US based franchises. At the same time, a number of struggling franchises in the “Sun Belt”, combined with a strong Canadian dollar and an abundance of available infrastructure dollars for new arenas make re-location(s) a realistic possibility. And does the willingness of Canadian politicians to commit to “public investment” in support of NHL franchises mark a change from previous eras when such proposals were met with a populist backlash against “corporate welfare”? If the “Sun Belt” implodes, will it cost Commissioner Gary Bettman his job?
Earlier this month while in Toronto, NHL deputy commissioner Bill Daly told the local sports media that the NHL has no objection to a second franchise in the GTA. During the same discussion, Toronto Maple Leafs president and general manager Brian Burke said that under the right circumstances, Maple Leafs Sports and Entertainment (MLSE, the Leafs owner) would not oppose the NHL locating a second franchise in “their” market.
“I don't think it's a point of contention even with the Leafs,” Daly said. “I can see a situation where by adding a franchise to a market, you can raise the tide for all boats. I don't think that because you put a franchise here, it necessarily makes the Leafs any less successful. And, in fact, it could create new revenue opportunities.”
Brian Burke, the Maple Leafs president and general manager, said the club has never officially opposed the idea of another franchise in its territory. Burke said if a study proved a second team would be beneficial to the Leafs and the NHL, the Leafs would not be opposed. Richard Peddie, president of the Leafs' parent company, Maple Leaf Sports and Entertainment, has also said this.
The GTA is the most bountiful professional hockey market in North America (see recentForbes NHL valuations) and nobody doubts that a second NHL franchise would be enthusiastically supported. However, the devil is always in the details and much would need to be resolved before a second franchise in the GTA becomes a reality. Whether or not the Leafs and maybe the Sabres (depending upon how close to Buffalo a second franchise would be) are entitled to “territorial indemnification” and what the value of that is, is somewhat a guessing game. And whether or not the Leafs and Sabres have a veto preventing a franchise from entering their market is another guessing game. In his aforementioned remarks to the Toronto sports media Mr. Daly remarked on the speculation surrounding a Leafs “veto”, “They can be dead set against it, but that doesn't mean they can stop the league from putting a franchise here if the league thinks a franchise here makes sense.” Mr. Daly’s remarks will do little to quell the speculation and uncertainty over the “veto”. During the bankruptcy auction of the Coyotes, Mr. Balsille’s lawyers presented a letter from the Leafs to the NHL stating that they (the Leafs) had a “veto”. There has also been much conjecture over the interpretation of the NHL constitution as it relates to franchise re-location. Some believe that franchise re-location requires a unanimous vote amongst owners - a de facto veto for the Leafs - while the league claims (at least publicly) that a simple majority vote is sufficient.
Ultimately these negotiations are solely about money, the details and legalities of the league constitution and territorial indemnification will be irrelevant if a deal can be brokered. (I.E. Leafs and/or Sabres satisfactorily compensated) A more fundamental concern to any owner wanting to bring a second team to the GTA is finding or constructing a suitable arena. Could MLSE (also owners of the Air Canada Centre arena) be landlord to a second NHL franchise or is it a necessity that a second franchise control “their” arena? Is a second NHL calibre arena in the GTA a realistic proposition (land acquisition, construction costs, zoning, transportation infrastructure, politics, public investment)? Mr. Balsillie’s plan was to move the Coyotes in to Copps Coliseum in Hamilton. (capacity approx 19,000) In Mr. Daly’s recent remarks in Toronto, he was cynical about the viability of an NHL franchise operating out of “Copps“, “….Copps Coliseum doesn't provide modern-day NHL economics.” Mr. Balsille recognized that Copps Coliseum required significant investment in order for it to generate the revenue necessary to sustain an NHL franchise. While Mr. Daly questioned where that investment would come from, local, provincial and federal politicians all eagerly pledged their support for Mr. Balsille’s plans to upgrade “Copps”. And upgrading “Copps” is a much less costly option than constructing a new arena. If the NHL is opposed to re-locating a franchise to Hamilton, it could be a result of wanting to protect the Buffalo market (vastly more vulnerable than the Leafs) or a vindictive response to local Hamilton officials unbridled and public support for Mr. Balsille’s "Make it Seven” campaign.
Select Read More to see the rest of "Relocating NHL Franchises to Canada" by Pete Toms
If you take the Versus/DirecTV dispute, the NHL’s miniscule TV ratings and recent ownership debacles, then add that with a recession and NFL record ratings, you’d think the NHL would be doomed. But, Forbes.com reported last week that at least leaguewide, the NHL turned a profit for its 2008-’09 season. Forbes’ research revealed a operating profit, which is earnings before interest, taxes, depreciation and amortization (EBITDA), of $6.1 million.
In the 12 years Forbes has been tracking the NHL, this is its highest figure. Additionally, the average NHL franchise’s worth is reported to be $223 million, which is $3 million more than the 2007-’08 season. Revenue from non-hockey events in NHL arenas also increased by $70 million to $2.82 billion.
So, how the heck did that happen? Well, markets such as Chicago, Pittsburgh and Washington have reinvented themselves. The Chicago Blackhawks finally allow their home fans to see home games, the Pittsburgh Penguins made two straight Stanley Cups after years of mediocrity and of course, Alexander Ovechkin’s stardom has boosted the Washington Capitals.
Local media and new sponsors are the biggest players in the revenue growth. Three major markets, Detriot, Chicago and Toronto, signed new contracts before the beginning of last season, causing a 15 percent raise up to $356 million. And, new sponsors such as McDonalds, Honda, Crisco and Visa have boosted sponsorship revenue 1.9 percent to $339 million.
But, says Forbes, the good news doesn’t apply to all NHL teams. The Pheonix Coyotes were recently purchased by the league for around $140 million, which means the league will assume the team’s liabilities until a buyer can be found. The Coyotes are not the only team struggling, the Nashville Predators and Florida Panthers are reportedly for sale and several teams, including the New York Islanders and Edmonton Oilers need new arenas.
In fact, by Forbes' accounting, 14 of the 30 clubs in the NHL posted operating losses. From as little as $800,000 in losses for the Calgary Flames to double-digit losses for the Carolina Panthers, and aforementioned Phoenix Coyotes.
Showing that the NHL can be profitable, and very much so, according to Forbes, the Toronto Maple Leafs had an operating income of $78.9 million. Other highly profitable clubs included the Montreal Canadians ($31.3 million), New York Rangers ($27.7 million), and Detroit Red Wings ($27.4 million).
To place the Maple Leafs' popularity in perspective, while the worldwide economy has taken a hit to nearly every sector, the Toronto club was more profitable this year, than last ($78.9 million in operating income compared to $66.4 million in 2008, and increase of 19 percent in profits.
Lastly, while leaguewide, revenues are up, the value of many NHL franchises have gone down from last year, in large part due to the economy. Fourteen of the 30 clubs saw their value drop from 2008 to 2009 with the highest drops coming from the Avalanche (down 11 percent), Stars (down 10 percent), and Thrashers (down 10 percent), the largest number of decliners since 2004.
The question will remain: Will the disparity between successful and unsuccessful clubs continue to widen? Clearly, as witnessed by the Coyotes, some clubs are near insolvency.
Two new general partners took over the Florida Panthers on Monday, stressing more accountability, greater professionalism and an unwillingness to accept mediocrity. The co-general managers, Cliff Viner and Stu Siegel, replace Alan Cohen who owned the team since 2001. The Panthers have not made the playoffs since 2000. Cohen said he wanted to sell the club, in part because of losing money.``I know I leave the organization in much better shape than it was when I took it over,'' said Cohen in a statement.
Select Read More to see the latest Forbes franchise valuations for each of the 30 clubs in the NHL
Sink the Mothership? VERSUS could be going after market share at some point
Is the VERSUS Network about to become a worthy competitor to ESPN? Would sports fans, leagues, cable and sat providers benefit from a merger of NBCU and Comcast? The most recent speculation surrounding the sale of NBCU revolves around comments by Vivendi CEO Jean-Bernard Levy, reiterating Vivendi’s desire to divest themselves of their 20% stake in NBCU. From Reuters;
NBC Universal could be floated on the stock market if France's Vivendi decides to sell its 20 percent stake in the group majority-owned by General Electric, Vivendi's chief executive said on Tuesday.
AND
Sources close to the discussions have said GE is negotiating a sale of a majority stake in NBCU to cable operator Comcast to create a powerhouse spanning TV broadcast, cable networks, movie and theme parks worth about $30 billion.
Such a deal would depend on Vivendi's selling its stake.
Those who are doubtful that this deal will happen frequently point to the negative reaction the rumoured deal has met with from the market. In 2004, Comcast failed to acquire a different media giant, Walt Disney Co. (which includes ESPN and ABC), a potential deal that engendered the same negative reaction. Earlier this month BusinessWeek reported;
It's become an almost Pavlovian response among Wall Street analysts and money managers: holding their noses when an executive proposes bringing content (movies and TV shows) and distribution (cable, satellite, and Internet) under one roof.
And so when investors learned on Sept. 30 that Comcast CEO Brian L. Roberts was considering a deal to take majority control of General Electric's (GE) NBC Universal (NBCU), the cable giant laid an egg on Wall Street. Its share price fell 7% the next day, to 15.67. The Street's worry was clear: Roberts' yen for NBCU's movies and TV shows would divert his executive team from the core business of providing cable TV, broadband, and phone service to Comcast's nearly 25 million subscribers.
Roberts has had a bad rap on Wall Street ever since 2004, when the cable company bid $54 billion for Walt Disney and then walked away once the Mouse House played hard to get. Roberts is mindful of that and of the Street's obsession with quarterly numbers. But he also needs to manage for the long haul. That means finding a way to offset slowing growth at Comcast, which is losing subscribers to phone and satellite companies and could suffer as more viewers move to the Web to watch movies and TV shows
Reuters reported in a separate piece concerning the possible sale of NBCU;
To some investors, Comcast's bid might trigger a sense of deja vu. In 2004, Roberts launched a hostile and audacious $54 billion bid to buy Walt Disney (DIS.N), but ultimately failed. Since then, investors have feared the cable company would make a similarly large and possibly value-depletive deal.
Those who believe that this deal makes sense see the value to Comcast in NBC’s content (including their cable channels), a stake in online video streaming website Hulu and a better position in the ongoing battle between networks and cable operators over carriage fees. Earlier this month, Brian Steinberg reported for Advertising Age;
Comcast's interest is obvious, particularly after the once-sleepy concern made a bid in 2004 for Walt Disney Co. Gaining control over NBC would give Comcast scads of content to ship over its cable and broadband lines, and it would add a raft of cable networks that have two streams of revenue -- subscription fees and advertising.
In looking at big media companies, "the best businesses that all of us have in the entertainment business are the cable content channels, and those channels, with that dual revenue stream, are really good businesses," said Stephen Burke, chief operating officer of Comcast, at a recent investor conference. "And I think we wouldn't be doing our job if we didn't try to figure out a way to get bigger in those businesses."
In a second piece on the proposed NBCU/Comcast deal, Mr. Steinberg wrote;
Media that relies primarily on ad revenue is suffering far more than those companies that have a hefty revenue stream coming directly from customers. Comcast, for example, is clearly betting that consumers will continue to be willing to pay for the content they want, when they want it. The company already gets hefty monthly fees from its cable and broadband subscribers, and it gets consumers to pay extra for premium, pay-per-view and digital video recorder options. Now it's looking to be in control of not just the pipes, but what comes through them.
Earlier the WSJ reported on the battle between TV networks and cable operators over carriage fees. Cable channels (including ESPN) have been outperforming “over the air” channels because of their “dual revenue stream” of advertising and carriage fees. As ad rates decline, CBS has successfully negotiated some deals for carriage fees and News Corp. (Fox) is seeking the same. In some markets, local TV stations are threatening to withhold their “over the air” signals from cable companies if a resolution is not found. If Comcast acquires NBCU, the WSJ reports that the stakes will rise in the “fees for carriage” dispute.
The issue could become more heated if Comcast Corp. takes control of the NBC network. Comcast, the biggest cable operator in the U.S. by subscribers, is in talks with #General Electric Co. about a transaction that would give it control of NBC Universal and its namesake broadcast network, according to people familiar with the matter. If that deal goes through, Comcast could influence how forcefully NBC will push cable operators for subscription fees. It's also possible that regulators would step in to oversee Comcast's deals with NBC and other broadcast networks.
Of particular interest to readers of this site is the impact that an NBCU/Comcast deal would have on VERSUS Network. Could this signal the beginning of VERSUS growing into a worthy competitor to ESPN?
In a separate report for the WSJ, Sam Schechner reported;
Comcast Corp. executive Jeff Shell said at an industry conference in June that expanding the sports business at his cable networks was the "top of our list over the next five years."
If Comcast's bid to control NBC Universal succeeds, it would advance Mr. Shell's goal overnight, creating a potential new rival to #"Walt Disney Co.'s ESPN.
As the cable-TV giant and NBC Universal's parent, #General Electric Co., work through details of a deal that would merge Comcast's cable networks with GE's NBC Universal, people close to the negotiations say the two companies see the creation of a combined sports business as a key benefit of a partnership.
The new company would marry Comcast's VERSUS and Golf Channel cable-sports networks and multiple regional sports networks with NBC Universal's broadcast-sports operation and rights to major sports events, including a Super Bowl and two Olympic games.
AND
VERSUS is in 75 million homes and averaged 125,000 viewers this year through Oct. 4, up 17% from a year earlier, according estimates from Nielsen Co. "We have a huge opportunity," Mr. Shell said of VERSUS at the June marketing conference in New York, to create "another sports brand in America," he said. Still, VERSUS's average number of viewers is less than a seventh of ESPN's, and just over a third of that on ESPN2.
In the aforementioned BusinessWeek piece, sports media consultant and former president of CBS Sports, Neal Pilson is quoted;
With NBC, Roberts will "have effectively created a potent competitor to ESPN," says Neal Pilson, a former CBS sports executive who now consults. Pilson figures Comcast will use NBC Sports' national platform to complement its 11 regional sports networks, which include major markets such as New York, Chicago, Philadelphia, and San Francisco. Throw in Comcast's Golf Channel and VERSUS, which has college football and pro hockey games, and the new entity clearly would give agita to executives at ESPN headquarters in Bristol, Conn.
Assuming the deal is concluded (far from certain), how would the sports industry react to VERSUS attempt to compete with ESPN? Last year when ESPN acquired the rights to the BCS, in the process obliterating any competing bid, many wondered if it was proof that ESPN could and would own the rights to any and every sports property that they wished. Did the ESPN/BCS deal hammer home the message that the ad supported “over the air” model will never compete with the “dual revenue stream” cable for sports rights? The March to Cable was one of The Sports Business Journal’s stories of 2008.
Sports have been migrating from broadcast to cable for a long time. For the past several years, late-round playoff games from MLB (TBS), the NBA (TNT and ESPN) and the NHL (VERSUS) have been telecast exclusively on cable.
But 2008 could be known as the year when the dam finally broke, thanks in large part to ESPN’s four-year, $495 million bid to poach the BCS games from Fox.
In the aftermath of the deal, broadcasters said they were unable to compete with ESPN’s dual revenue stream of affiliate and advertising fees. The big question is whether broadcasters will be able to figure out a way to compete with the newfound strength of the cable networks.
Soon after the ESPN/BCS deal, John Ourand reported for The Sports Business Journal on industry concerns over the dominance of ESPN;
…some bemoaned the fact that no other network — broadcast or cable — was able to come close to ESPN’s bid.
Obviously, there’s no recession, and all roads lead to Bristol,” said Howard Katz, the NFL’s senior vice president of broadcasting and media operations.
The deal, which saw ESPN bid $100 million more than Fox to secure the BCS rights, had attendees questioning what broadcasters had to do to be able to compete for future rights.
Cable networks, like ESPN, have an advantage thanks to their dual revenue streams from advertising and affiliate sales.
AND
As it stands now, executives seemed to be preparing for more sports to follow the money to cable, and some openly rooted for other networks, like VERSUS, to step up and compete with ESPN.
“This is going to force the market to create a competitor to ESPN,” said PGA Tour executive Gil Kerr.
A much more robust VERSUS could provide sports properties a welcome alternative to ESPN. Currently, if a sports property is not a partner with ESPN, they get less “play” from the ESPN multi media giant. The NHL, formerly an ESPN partner and a current partner of both VERSUS and NBC, has complained that their exposure on ESPN’s flagship “SportsCenter” has diminished significantly since their rights deal was not renewed.
Along with sports properties, the cable and sat providers might embrace a legitimate rival to ESPN. These industries have long been unhappy with the cost of sports programming. Disputes over “sports tiers” and carriage fees have been widespread. At $4.00 per subscriber, ESPN is easily the most expensive cable channel. By comparison, VERSUS currently charges $0.20 to $0.25 per sub. Rick Horrow wrote earlier this month for BusinessWeek (Mr. Horrow also hosts a sports business talk show on VERSUS);
Moreover, the strong platform the new entity would provide would likely give Comcast more leverage when negotiating carriage fees with ESPN. Comcast and other cable companies are paying approximately $5.8 billion to carry ESPN's seven domestic networks this year, according to the Journal. (Author’s note, “Journal” is the WSJ)
In the larger scheme, VERSUS is likely a small consideration in the discussed NBCU/Comcast deal. Should it happen, the affects on sports fans, sports properties, MSOs and ESPN will be interesting to watch. Fairly or not, there is considerable enmity in the sports industry towards ESPN, who justifiably argue that they should not be criticized over their staggering success. If VERSUS doesn’t answer the call to challenge the WWL, how long until somebody else rises to the challenge?
OTHER NEWS FROM THE BUSINESS OF SPORTS NETWORK
(THE BIZ OF BASEBALL)
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MLB.com Releases "At Bat 2009" Beta for Android Devices
Game 1 of World Series Second Most Viewed Since '99
Game 1 of World Series Sees Massive Ratings Jump of 34%
Terry Miller, Wife of Former MLBPA Exec. Dir. Marvin Miller, Passes Away at 90
Details from Jamie McCourt's Divorce Filing an Eye-Popping Endeavor
From Dodger Blue to Singing the Blues, Here Come the McCourts
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NBA Opening Night on TNT Sees Highest Viewed Regular Season Double-Header Since '96
Timberwolves Unveil Two New Seating Areas At Target Center
NBA Kicks Off Season with 83 International Players from 36 Countries
NBA Releases Complete Opening Day Rosters for 2009-10 Season
Brian Byrnes of OKC Thunder Discusses Building a Brand
Pete Toms is an author for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.
The past five months I have followed, with great interest, Jim Balsille’s attempts to purchase the Phoenix Coyotes and move them to Hamilton ON. I was initially interested in Mr. Balsille’s efforts because if he succeeded, there was real potential (appeals would have been inevitable) that the structure and governance of professional sports leagues in North America would change dramatically. I followed the developments in the bankruptcy proceedings from many sources, beat writers, columnists, trade publications and sports business / sports law blogs. There was a large amount of thorough and informed reporting on both sides of our border but in Canada Mr. Balsille’s efforts also became a nationalist rallying point.
The Canadian writers assigned to the bankruptcy proceedings “beat” covered the story in the same manner as their American colleagues. Their reporting focused on the nuts and bolts of the competing bids and should Mr. Balsille succeed, the ramifications for “single entity” status. However there was an additional and broader aspect to the media coverage in Canada. Mr. Balsille’s attempt to move the Coyotes became a nationalist melodrama with Mr. Bettman the villain and Mr. Balsille the hero. Sports columnists (not to be lumped in with the beat writers assigned to the bankruptcy proceedings), newspaper editorials, political columnists, bloggers, talk radio (both news and sports), pop culture watchers, all were consistently outraged and incredulous that Mr. Bettman would not acquiesce to Mr. Balsille’s demands. Typically, Mr. Bettman’s refusal to allow Mr. Balsille to move the franchise to Hamilton was presented in two manners.
1. Gary Bettman is too stupid to understand that the NHL cannot succeed in Arizona. 2. Gary Bettman hates Jim Balsille and hates Canada. (I won’t quibble on the former).
Dozens, if not hundreds of times I have read, heard on radio or television, or been told face to face that the NHL’s stance was intellectually indefensible ( i.e. stupid ) and could only be explained by Mr. Bettman’s enmity towards our country. Over and over I was asked or overheard people express in exasperated tones, “why doesn’t Bettman want hockey in Hamilton“? What was widely misunderstood or perhaps conveniently overlooked by many Canadians was that this case was not about whether Hamilton is a better hockey market than Phoenix. This case was about much more.
Were Mr. Balsille to succeed in moving the Coyotes franchise without the approval of the NHL it could end the long held ability of North American professional sports leagues to determine where their franchises could operate. All the “stick and ball” leagues filed briefs in the case supporting the NHL. None of Bud Selig, David Stern or Roger Goodell cares about hockey in Phoenix or Hamilton. They do care greatly about their ability to control where their franchises are located and who owns them. All of the aforementioned commissioners would have reacted identically to Gary Bettman if faced with the same challenge.
If a second NHL franchise comes to southern Ontario, the NHL wants to be paid. Gary Bettman knows that Hamilton is a better NHL market than Phoenix but if you want to set up shop there, the NHL wants a big, fat expansion fee.
The Buffalo Sabres and Toronto Maple Leafs want to be compensated. In other words, do leagues control “territorial rights”?
Mr. Balsille abetted the nationalist emotions and arguments that erupted during his “make it seven” campaign. Mr. Balsille adroitly positioned his attempt to bring the Coyotes to Hamilton as a patriotic act. Mr. Balsille promoted the idea that he was working to “make it seven” for the benefit of Canadian hockey fans (which is pretty much all Canadians, at least us males), particularly those “underserved” fans in the Hamilton region. Largely overlooked was that if Mr. Balsille succeeded in buying the team out of bankruptcy and moving it without the consent of the Leafs and Sabres he would open a second NHL franchise in southern Ontario on the cheap. His attempt to circumvent NHL approval via bankruptcy court would be a far better deal than buying an expansion franchise and writing expensive “territorial indemnification” cheques to the Leafs and Sabres. (As the bankruptcy proceedings progressed Mr. Balsille became more amenable to compensating the Leafs and Sabres). Mr. Balsille portrayed himself, with the unbridled cooperation of the press, as a Canadian everyman who just happened to be a billionaire. Many pieces and columns were written lauding Mr. Balsille’s selfless, patriotic efforts to rescue at least one NHL franchise from the “hockey diaspora” of the American south and bring it “home”. Mr. Balsille was photographed and interviewed in small arenas, his passion for playing “pick up” hockey widely chronicled. (Evidently he even favours a traditionally blue collar brand of beer in the dressing room) Mr. Balsille received much praise for maintaining his RIM empire in Canada, many of his acolytes arguing that it would have been more financially beneficial for him to have built it elsewhere . ( I’m not so certain and a bit offended, in that it plays to Canadian inferiority and insecurity ) Practically ignored in the fawning coverage of Mr. Balsille were the penalties he has paid over historical stock option granting practices. (In the latter months of the bankruptcy proceedings this did receive more play when attention shifted to the NHL’s rejection of Mr. Balsille on “character” issues) Instead, his philanthropy is highlighted.
Mr. Balsille’s nationalist “make it seven” campaign was unquestionably a great success in demonstrating that there is widespread support in southern Ontario for a second NHL franchise. The social networking “make it seven” website was enormously popular not only in southern Ontario but across the country. The campaign was so popular that it became a “motherhood” issue. Home Hardware and Labatts both quickly joined as corporate partners and politicians of all stripes and from all levels of government committed their support to the renovation of the hockey arena in Hamilton (no cries of corporate welfare for subsidizing the business venture of a billionaire).
I ascribe an additional motive to Mr. Balsille’s “make it seven” initiative. Mr. Balsille exploited nationalist emotions associated with hockey to pressure (ultimately unsuccessfully) Mr. Bettman in to compromising (or capitulating) on the move of the Coyotes. Every day for five months Mr. Bettman was vilified in his league’s most important market (Canada). Every day Canadian hockey fans were told that Mr. Bettman didn’t care about the NHL in their country. Worse, he was hostile toward it. If Mr. Bettman wouldn’t allow Mr. Balsille in to his club then Mr. Balsille would ensure that the NHL brand be attacked relentlessly where it is most popular.
With Judge Baum’s ruling earlier this week, the cognoscenti have concluded that the NHL will soon improve their offer and regain full control of the franchise. Most pundits think that whoever buys the club will eventually move it elsewhere. What was potentially a significant case on the legality of leagues as “single entities” has instead reaffirmed the status quo. (“American Needle” is still in doubt) In the end, more interesting than the Judge Baum’s decision, is the Canadian morality play that Bettman vs. Balsille evolved into. It galls many of us that the professional sports league we most favour and support with a religious devotion in many instances, is an American based and controlled organization. In this construct, the too smart, too slick, too New York lawyer is not deserving of protecting what is “ours”. The NHL left Winnipeg and Quebec City, cities where practically everybody is a hockey fan. Instead we have hockey in the sun belt, where practically nobody is a hockey fan. And in the morality play Gary Bettman is the imperialist, the interloper, imposing his will against the wishes of the true believers, the people who want hockey, who love hockey. Us, the Canadians.
The vilification of Gary Bettman in Canada is not new. Typically the characterization of Mr. Bettman as anti Canadian and incompetent has been the domain of sportswriters and hockey pundits. (“make it seven” was much more widespread) There is plenty that Mr. Bettman can be criticized over.
Expansion to the sun belt has been a failure.
Mr. Bettman has done a poor job of vetting a number of former owners that he brought to the league (Rigas, Del Biaggio, Samueli).
Allowing the implosion of the Phoenix franchise.
Cancellation of the 94-95 season due to labour stoppage.
The absence of the NHL on ESPN.
The Canadian hockey media (unlike their American colleagues) are loathe to credit Mr. Bettman for.
The NHL adding major corporate sponsors last season while the other “stick and ball” leagues were bleeding the same.
The success of the NHL’s digital initiatives
Growing TV numbers in the US and the New Years Classic in particular. A major accomplishment for the NHL.
A CBA which is considered the most favourable to management amongst the “stick and ball” leagues. (Whether cancelling a season in order to obtain it is debatable)
The NHL’s TV partnership with Versus. You won’t read this in Canada but some sports media watchers (including The SportsBusiness Journal’s John Ourand) argue that it is more advantageous for the NHL to be the “big fish” on Versus rather than the “small fish” on ESPN.
Eventually we will likely “make it seven or eight”, there are plenty of NHL franchises looking for buyers and there is great demand for the NHL here. And the fundamentals that make that possible will remain in place regardless of whether either Mr. Balsille or Mr. Bettman is involved. But I think it is time for Canadians to adopt a more mature attitude towards the NHL. While we are easily the most avid consumers of this US based and operated entertainment conglomerate, we also resent that we don’t control “our game”. But “our game” is so, so much more than the NHL. Our “six” is a small part of the nexus that makes hockey our national game and a source of so much national pride and shared identity. Hockey in Canada is hockey moms, hockey dads, hockey siblings, Poutine from the arena canteen, university hockey, womens hockey, junior hockey (easily the most popular spectator sport in our country), boys and girls minor hockey, hockey on “the slab”, street hockey, air hockey, table hockey, hockey cards, sledge hockey, those big round pins with the photos of their kids in hockey gear that adorn the parkas of proud hockey parents, hockey volunteers, Wii hockey, hockey on the PSP, shinny on outdoor rinks, “mini sticks” hockey in the basement, getting up at 3 AM to watch Olympic hockey in Nagano….we could all go on and on. Hockey is ours, always has been and always will be. Gary Bettman and Jim Balsille cannot change that.
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(THE BIZ OF BASEBALL)
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Pete Toms is an author for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.