SBJ/October 1 - 7, 2007/SBJ In Depth

What to watch this season

Expansion

Is Vegas in the
NHL’s future?

Viva Las Vegas. Bright lights are going to set one league on fire, and the NHL appears intent on making hockey the city’s first big league sport. The league has already met with Jerry Bruckheimer and discussed the possibility of the Hollywood producer buying an expansion team in the market.

The league has commissioned an expansion study and begun discussing the possibility with its board. If it moves ahead with expansion, the early front-runners appear to be Las Vegas, where AEG plans to build an arena, and Kansas City, where AEG contributed $50 million toward building the Sprint Center.

Owners would stand to win big if the league expanded. Sources say an expansion franchise could cost as much as $300 million, delivering each owner roughly $10 million for each team added.

But questions remain over whether expansion would help or hurt the league, which struggles to attract a TV audience nationally and fill buildings locally in some existing markets.

NHL Players’ Association

All business matters that have to be signed off on by the NHLPA ground to a halt in May when player representatives voted to fire Executive Director Ted Saskin. Whoever the union hires to replace him will have a major impact on the union, the league and the future of both.

Former director Bob Goodenow took a strong stance against a salary cap ahead of the last collective-bargaining agreement, putting him opposite the league and leading to the 2004-05 lockout.

Saskin’s tenure was plagued by questions over his election, which a faction of players felt violated the union’s bylaws.

The new director will have to restore unity and establish a shared resolve across the union. He also will have to determine whether it’s in the union’s best interests to terminate the current CBA two years early in September 2009.

Canadian dollar

Does the buck
stop here?

What was once one of the NHL’s biggest weaknesses — the Canadian dollar — has become one of its greatest strengths.

The dollar that once traded at 62 cents to the U.S. dollar crippled Canadian teams and restrained potential league revenue. But last year the Canadian dollar surged to new highs, nearly equaling the U.S. dollar and delivering a generous fiscal bump to teams and the league.

The Canadian dollar now has provided NHL team owners collectively a net savings of $400,000 (U.S.) for every 1-cent rise in strength. It also has helped the league increase its revenue for the last two consecutive years, pushing it to more than $2.3 billion last year.

As the league looks for a third year of revenue growth, the continued strength of the Canadian dollar could play a critical role. If it slides and revenue growth sputters, the league might have to withhold returning escrow to players for the first time since the lockout — something that would upset players and possibly reinvigorate the union.

Television

Can the league hook more
television viewers?

Commissioner Gary Bettman opened his presentation of the Stanley Cup playoffs saying, “Sounds like hockey’s doing pretty well in California. Don’t you think?”

Though the sport appeared to be alive and well in the Honda Center where the Anaheim Ducks were celebrating a championship, it was not alive and well on TV. Viewer numbers for the first four games of the finals dropped 21 percent from the first four games of the 2006 Stanley Cup finals and 25 percent from 2004.

NBC’s broadcast of Game 3 on Saturday, June 2, became the network’s lowest-rated night ever, when it averaged a 1.1 rating and 1.6 million viewers during the 8-11 p.m. window. The Saturday night numbers even fell below the movie “Meltdown: Days Destruct” on Sci-Fi Channel.

Improving ratings is only part of the TV story this season. The league plans to launch the NHL Network in the United States, which will offer 50 live games in 2007-08. It also has held preliminary conversations with ESPN about returning to the network in some capacity.

Scheduling

Since the lockout, the Dallas Stars have played most of their games two time zones away, challenging the team’s TV ratings and frustrating its front office. The Stars’ gripes with the current schedule, which tries to build rivalry by having teams play four division opponents eight times in a season, are shared by others.

Last year, the board of governors came one vote short of changing the schedule to promote more out-of-conference games. That would allow each team to play every team once in their building, a move that team executives believe would boost attendance by bringing young stars like Sidney Crosby and Alex Ovechkin to each NHL market.

Fans could be buying
more tickets on the
secondary market.

The board of governors agreed in its most recent meeting to change the current schedule, but won’t decide how to change the schedule until it meets again in December. One option would see each team drop one of its eight divisional games and replace it with a game against an out-of-conference opponent. A second one, which would address the issue of bringing stars to each market, would see each team go from eight to six divisional games, then play a home-and-home series against every team.

Secondary ticket market

Sixteen NHL teams have embraced the secondary ticket market, establishing closed seller markets, open markets and even premium seating markets for season-ticket holders and ticket buyers. NHL executives also are exploring the possibility of adopting a secondary ticket market across the league. The move to embrace secondary ticket markets could help teams retain season-ticket holders in an era when more and more decline renewing because they don’t have time — not because they can’t afford it.

All you can eat

All-you-can-eat sections may
help some teams boost
ticket sales.

Success among Major League Baseball teams with all-you-can-eat sections attracted a ton of attention last year. The Nashville Predators and Florida Panthers launched a similar program indoors during the 2006-07 season and the Philadelphia Flyers will follow suit this year. The success of those teams at moving tickets in their all-you-can-eat sections will determine whether the program spreads to other NHL clubs.

Online team content

The New York Islanders and New York Rangers made an aggressive move into the world of online TV last year, establishing their own Web channels through NeuLion, an Internet-protocol TV company. The channels offer a new way for teams to connect with their fans off the ice and offer content like pregame and postgame interviews that fans would otherwise miss. The league’s agreement during the offseason to stream games over the Web through NeuLion should encourage other teams to follow suit.

— Compiled by Tripp Mickle

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