In a "bid to raise revenue," the NHL has agreed to "buy
out its Internet partner," IBM, for "about" $10M, according
to Sam Walker of the WALL STREET JOURNAL, who writes the
move "is the strongest indication yet" that pro sports
leagues, "faced with declining" TV ratings, are "planning to
make the Internet a significant part of their core
business." The deal, expected to be announced Monday, makes
the NHL the first major pro sports league to "take its
entire Internet business in-house, rather than licensing the
rights to an outside operator." NHL execs say that their
Internet business "is only breaking even at present, placing
it behind other leagues that earn as much" as $3M a year
licensing the business to outsiders. Under the NHL's
previous deal in '96, IBM was an "equal partner in the
league's Internet arm." Walker writes that IBM "plans to
continue its role as an official NHL sponsor." The league
will upgrade the site "with more interactive elements" and
is "considering ways to expand live video and data feeds in
anticipation of someday broadcasting games over the Web."
Analysts say that "while the agreement could benefit the
NHL, it does contain some risks at a time when the league is
under financial pressure" (WALL STREET JOURNAL, 2/11).
IBM'S MISSION: BRANDWEEK's Terry Lefton examines how
IBM's sports marketing philosophy changed under CEO Lou
Gerstner. Gerstner's arrival in '92 "brought with it a new
emphasis on marketing for what was then an almost entirely
sales-oriented organization." The "rationale" behind IBM's
sports sponsorships now is "to acquire a compelling e-
business platform." IBM's Tom Burke: "We went from using
sports strictly as a place to host customers and hand out
charity checks to a real marketing platform" (BWEEK, 2/7).
