SBD/March 4, 2013/Leagues and Governing Bodies

NHL Revenues Pacing Well Despite Short Season; Should League Cut October Games?

Hockey-related revenue in the NHL last season hit a record $3.3B
The NHL recently informed the NHLPA that the projected hockey-related revenue (HRR) for the shortened '12-13 season will reach $2.4B, a "staggering number with implications far beyond the obvious that the league essentially suffered no damage by locking out the players for more than three months," according to Larry Brooks of the N.Y. POST. The $2.4B projection is "for a 720-game regular season plus the playoffs." HRR last season hit a record $3.3B, and the NHL expects to generate 72.7% of last year’s revenue in 58.5% of the season "without the benefits reaped from the money-printing outdoor game." However, the projected $2.4B "represents a case of less being -- or meaning -- more to the consumers." It seems "obvious, as long suspected, the NHL generates a comparatively small amount of revenue over the course of the first six weeks of the season, when it’s difficult to attract attention and sales in October." Attendance and percentage of capacity are "up dramatically, essentially across the board." The lesson here for the NHL and NHLPA is "reducing the schedule to 70 games in a season that begins in the final week of October -- it would be important to get a jump on the NBA -- very well could and almost certainly would not only produce better hockey but generate more interest and thus more revenue." Rather than realignment, the league and the union "should be devoting their energies to a radical reduction of the schedule and resetting of the season." Eliminating October is "good business for the NHL" (N.Y. POST, 3/3).

REALIGNMENT A PRECURSOR TO EXPANSION? In Boston, Kevin Paul Dupont wrote of the NHL's most recent proposal for realignment, "The imbalance, with 16 teams in the East and 14 in the West, makes it appear the league is readying to accommodate a couple of expansion teams." The likes of K.C., Houston, Seattle, Portland, and even Las Vegas "have long been considered candidates." In the East, Quebec City, southern Ontario, and Hartford "are among the wannabes." NHL sources believe that "if Florida remains a doormat, it could be shifted to Quebec City, where construction on the state-of-the-art Quebecor Arena began in September" (BOSTON GLOBE, 3/3). In Buffalo, Bucky Gleason wrote the NHL in its realignment efforts "isn’t going to satisfy everybody, but it also shouldn’t send a reliable car to the junkyard because it has a broken tail light." Overall, the league "doesn’t have a balance problem." It certainly "shouldn’t make changes that would throw off competitive balance" (BUFFALO NEWS, 3/3). In Columbus, Michael Arace writes the NHLPA "has it in its power to kill the plan, and, if it does, it will be a defeat for logic, a blow to smart-thinking people who care about hockey, and a bog of spit in the eye of the Blue Jackets, their players and their fans." The aim of the proposal was "to bring some measure of relief to a handful of teams that are at a competitive disadvantage" (COLUMBUS DISPATCH, 3/4). In Illinois, Barry Rozner wrote, "It's a shame that an Original Six franchise like Chicago doesn't get more consideration" (Illinois DAILY HERALD, 3/3). The CBC’s Elliotte Friedman said if the NHLPA votes against the realignment plan, it is "a bad sign because you’d hope after the lockout they’d be able to make a deal together on things, especially when they’ve discussed this before" (“HNIC,” CBC, 3/2).

NEGOTIATING THE EXCHANGE RATE: In N.Y., Jeff Klein notes the NHL is expected to send players to the '14 Sochi Games, but it is "hardly a done deal." The talks "hinge on one overarching issue: whether the NHL can extract extra rights and considerations from the IOC and the IIHF in exchange for suspending business for two weeks at midseason and risking injury to its players." But the IOC and the IIHF are believed to "be reluctant to grant such concessions." It could set a "precedent for other professional leagues that send players to the Olympics to ask for similar deals." Officials have not disclosed the "full list of what the NHL is seeking, but the league is known to want the right to use Olympic video on the NHL Network, NHL.com and other league platforms." The league also may be "seeking some form of financial compensation or increased perquisites for participating in the Olympics." Officials from the NBA and WNBA declined to comment on "what they would do if the NHL won extra video rights from the IOC" (N.Y. TIMES, 3/4).
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