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SBD/April 19, 2011/Media
NBC, Versus Ink 10-Year, $2B Deal To Retain NHL TV Rights
Published April 19, 2011
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NBC and Versus have signed a 10-year, $2B deal to renew the NHL's TV rights. Fox took a preliminary look at the package but never made a bid, and Turner pulled out of the bidding last week, saying it could not find a business model to support the money NBC and Versus are paying the NHL. ESPN said it had "constructive conversations" with the NHL, "offering them the opportunity for unprecedented distribution of every game of the Stanley Cup playoffs on ESPN platforms, including authentication to broadband and mobile devices." ESPN had committed to carry one regular-season game per week. But sources said the NHL never came back to ESPN with a final bid. ESPN remained involved in the bidding process until the end. But sources said it was too difficult for the NHL and ESPN to work around NBC and Versus' matching rights. The deal will see NBC and Versus carry all Stanley Cup playoff games nationally, with the conference semis appearing exclusively on the two nets. It also will see NBC and Versus televise 100 regular-season games, including a new Thanksgiving Friday telecast on NBC. The agreement includes all digital rights for the games NBC and Versus televise. NBC has committed to a national "Game of the Week" and Winter Classic, and Versus will televise a national "Game of the Week," plus the All-Star Game, NHL Premiere Games, NHL Faceoff and any future NHL Heritage Classic games in Canada. NBC and Versus will continue to share the rights to the Stanley Cup Final. As part of the deal, NBC Sports Group agreed to build a new studio for NHL Network in Stamford, Conn. The deal also includes targeted promotions across the Comcast/NBCUniversal TV and digital assets. The NHL's rights fee will exceed -- by far -- the $120M per year average that ESPN paid from '99-'04, which is the league's largest contract to date. The NHL's current deal with Versus is for $77.5M per year, while NBC has a revenue-sharing deal that does not involve a rights fee. Many execs inside the NHL favored ESPN, believing a deal with the network would guarantee more coverage on popular shows like "SportsCenter." But NBC and Versus determined that the package was too important for Versus to lose. This marks the first big media rights negotiation since Comcast acquired NBC (John Ourand, THE DAILY).
NOT THE RIGHT FIT FOR TURNER: After pulling out of the bidding, Turner President of Sales, Distribution & Sports David Levy said, "We are disciplined in our approach to negotiating sports rights and are committed to providing quality programming that matters to our audience, advertisers and distribution partners. We think the NHL is an attractive property, but we could not come up with a business model that served our interests" (Ourand). DAILY VARIETY's Tom Lowry wrote Turner's decision "raises questions" as to whether it will "do the same in another hotly contested rights bidding war, the one for the 2014 and 2016 Olympic Games." Turner dropping out of that bidding "would leave incumbent NBCUniversal to go up against an ABC-ESPN combo, which is believed to be preparing an aggressive bid" (VARIETY.com, 4/18). YAHOO SPORTS' Greg Wyshynski wrote it was "hard to believe that Turner would hang in the bidding with NBCUniversal and ESPN because (a) its priorities are in scripted shows and in trying to land some NFL rights in 2013 and (b) the notion that the NHL would end up calling truTV home wasn't likely." truTV "conjured up memories of the NHL's time with OLN/Versus as a startup" (SPORTS.YAHOO.com, 4/18).
TWITTER REAX: Soon after news of the NHL's renewal with Versus and NBC, sports execs and journalists weighed in on the deal. Turnkey Intelligence VP & Group Dir Steve Seiferheld: “No surprise to me at all, Versus can't be a sports network without at least one mainstream sport.”