SBJ/September 26-October 2, 2011/In-DepthPrint All
When the ink dried on the contract that sent the Atlanta Thrashers to Winnipeg this past May, the club’s new ownership group, True North Sports & Entertainment, was faced with a long list of tasks and a compressed schedule to accomplish them. True North had to sell NHL hockey back to a community still upset from the disappearance of its beloved Jets in 1996, it had to boost its operations and infrastructure to accommodate NHL requirements, and it had to create national partnerships to take the brand to Canadians at large. Staff writer Fred Dreier caught up with True North President Jim Ludlow to talk about the task of getting the Winnipeg Jets off the ground before the puck drops to open the NHL regular season on Oct. 6.
■ How long has your organization been discussing bringing the NHL back to Winnipeg?
Ludlow: The thinking really goes a long way back to the loss of the original Winnipeg Jets in the mid-1990s. I would argue Winnipeg was a much different community at that time. So fast forward a decade, and we developed the idea for building a state-of-the-art sports and entertainment venue here. That was a big issue why the team left in 1996. So the
■ You said Winnipeg is a different city than it was in 1996. What factors changed that enabled you to bring the team there?
Ludlow: Winnipeg has always been a dynamic place but it didn’t have the corporate strength just materialize like in Ottawa. Winnipeg is about stability and diversity. It’s grown. Now there are more corporate offices here than in Edmonton. MTS is here. And hockey has grown. We have a brand that is more able to capture the national sponsorship market than before, so we’re able to do a lot more with an NHL team than they could do in 1996. You layer in the strength of the Canadian dollar and the weakness of the U.S. dollar. I don’t know if we would be having this conversation half a dozen years ago when we had 70 cents on the U.S. dollar.
■ Why did you pursue the Atlanta Thrashers as opposed to the Phoenix Coyotes?
Ludlow: We were working with the NHL, and it was understood that when we had an opportunity it would be
TRUE NORTH SPORTS & ENTERTAINMENT
The last 90 days have been a blur for Jim Ludlow as the Jets have prepared for the season.
■ What time frame were you looking at for getting the organization ready for NHL hockey?
Ludlow: We had to do in 90 days what you would typically expect to do over a 12- to 18-month period, not the least of which was create a new logo and jersey design. That conversation alone can be 18 months. The advantage we had is that this is an existing operation. Our AHL team was a significant attendance and revenue generator, so we could plug and play to a certain extent with sponsors and the building. Our staff has gone from 120 to 170 people, and most of the new staff is on the hockey operations side. We hired a new general manager. But it has been extremely intense.
■ Why did you choose to align yourself with the old Jets name as opposed to launching a completely new brand?
Ludlow: We had always debated whether to use the Jets or the existing Manitoba Moose name, and a lot of us had spent a lot of time building traction with the Moose brand. We were sad to see that go. Some people felt that Winnipeg had already seen the Jets, the Moose were off to Newfoundland, so let’s start fresh on a new brand. But there was a lot of passion for the Jets name, not just in Winnipeg but around Canada. We felt the best way to capture that national passion was to go with the old name and then develop a new brand with new logos and colors.
■ At 15,000 seats, the MTS Centre is one of the smaller arenas in the NHL. Will you be expanding?
Ludlow: No, the building was sufficiently sized from the get-go. Frankly, when we built the arena in 2004 we had the notion that we would never expand past 15,000. We wanted a building that could adequately hold 10,000 for AHL games and expand to 17,000 for concerts. So 15,000 is small for the NHL, but our season-ticket size is pretty high. The drive to 13,000 [season tickets] validated our decision. We scaled the arena from $39 to $129, and in this marketplace we felt that is a sweet spot. And our season-ticket agreements are all multiyear terms — it’s either a three-, four-, or five-year term, and we’ve sold out all of our season tickets for longer terms. If we had 18,000 or 20,000, that might be tougher to achieve what we’ve achieved. When there is always an available ticket for your games, the notion of demand is diminished.
Jets fans made it clear at the NHL entry draft that they are ready for some hockey.
Ludlow: We did some significant upgrades, and we spent the summer and many millions of dollars doing it. We really improved our concessions and broadcast services, and there was significant upgrade to our ice plants and fiber optic capabilities. Our suites were also on the large side; they sat 24 or 25 people. So we’ve divided those and gone to 56 suites now. Otherwise, the building’s footprint hasn’t changed.
■ How has the value of the sponsorships increased?
Ludlow: As a typical multiple, it’s been three or four times to have a partner in the building now than before. We’ve tried to make that transition easier, and most of the partners have wanted to stay with us. They understand the metric is bigger, because some of them have relationships with the NHL teams in Ottawa or Edmonton. So the conversation has generally been pleasant.
■ What will your sponsorship portfolio look like?
Ludlow: MTS is our No. 1 sponsor, the local telecommunications company for Manitoba. They have been our naming-rights partner since the beginning, and they extended with us now for the next 10 years. After MTS we have 15 top-tier national sponsors that have also had previous relationships with us, like Labatt, Coca-Cola and Toyota.
■ What are examples of partners that you would not have been able to get with the Manitoba Moose?
Ludlow: In the financial services world we have a partner with a significant scale in Scotiabank. They are significant to have a national partner in the category, not just the financial value. We had financial service partners with the Moose but we could not extend that category into national scope because we did not have the kind of broadcast relationship. We are coming from a spot where we had little broadcast exposure to a full 82-game national broadcast exposure. And we have a 10-year regional and national deal with TSN for all of our home and away games. They are going to brand a TSN Jets channel in Winnipeg, which aligns us with what they have done in Montreal. I think we’re very fortunate to be in the same company with that brand.
When San Jose Sharks defenseman Doug Murray was a teenager in Stockholm, his only contact with televised NHL content was a copy of “Hockey’s Greatest Hits,” a compilation of bloopers, fights and goals released on VHS in 1990.
“The truth was that there was no place to find games on TV,” said Murray, now 31.
These days, Murray said his Swedish parents stream his games live on the Internet early in the morning, or watch rerun games on television. They may have an even easier time watching Doug play this coming season, as the NHL has launched an aggressive European media strategy.
Previously, NHL televised games were packaged with other American sports and distributed in Europe by ESPN on ESPN America, the English-language, pan-European television platform. But now the league and its new European rights holders — Stockholm-based Medge Consulting and Oxford-based Advisers Media International — are negotiating individual television deals on a country-by-country basis. The strategy will enable local television licensees to adapt the games to native-language telecasts instead of English.
“One third of our players come from Europe, and European fans want to be able to see the best players, especially when they are local,” said John Collins, COO of the NHL. “We want to be able to shorten the distance between European fans and our game.”
In addition to attempts to gain broader television distribution, the league’s strategy includes an increase in content this season. The league is expanding the total number of available games in Europe by 25 percent to between 435 and 480 for the regular season and playoffs. It also is increasing the number of weekend games shown during prime-time European hours by 40 percent, to 94.
In October the league will roll out foreign-language versions of its website.
But on the eve of puck dropping on the 2011-12 season, the new television strategy has yet to become reality. It hinges on AMI/Medge’s ability to sign local sublicensing deals with regional European television distributors. According to league sources, AMI/Medge have yet to finalize any regional deals. The size and scope of these sublicensing deals will reveal whether the NHL’s popularity in Europe is indeed as deep and wide ranging as the league believes it to be.
NHL Commissioner Gary Bettman said he is not worried about the lack of deals so far, and said the league and AMI/Medge are very close to finalizing numerous partnerships in Europe.
“It takes time to do these things. We had to first complete our deals with AMI and Medge,” Bettman said. “Of the North American sports, we may be the most popular in Europe and Russia, and we want to make sure we’re focused on the opportunity.”
Collins said the plans for Europe are part of the league’s goal of growing its overall marketing footprint in the U.S. and abroad. He said that with the league’s 10-year television deal with NBC in hand, the NHL can now focus its attention on Europe.
The league’s previous, six-year European media partnership with ESPN ceded the league’s digital and television rights in
Previously, NHL games were distributed in Europe by ESPN on ESPN America.
Bettman called the NASN/ESPN America deal a “one-size-fits-all solution,” and said the league signed it while trying to rebuild its brand domestically after the lockout.
“Their business model and our business model weren’t the same,” Bettman said. “They’re delivering lots and lots of sports on a mass basis. We felt we needed to be more targeted by country.”
The league put its international rights for Europe, Africa and Asia to tender in May. ESPN bid on the rights, but the league signed a five-year deal with AMI/Medge in June. Both firms have experience selling licensing rights for the English Premier League, with Medge having 20 years of experience working in Scandinavia and AMI having strong relationships in Russia and Eastern Europe. Not surprisingly, the deal has Medge overseeing sublicensing agreements in Scandinavian countries and AMI selling in Great Britain and the rest of continental Europe.
ESPN may have lost in its bid to maintain the rights, but an ESPN spokesperson said ESPN America is in discussions with AMI and Medge to distribute NHL programming as a sublicensee in select markets in Europe, Asia and Africa.
The new deal with AMI/Medge brings a significant financial upswing. According to sources, NASN’s original deal was worth $11.25 million a year with the right to renew for $12 million a year for 2009-10 and 2010-11.
Sources familiar with the AMI/Medge deal pegged it at $20 million to $22 million a year, with the league and Medge also splitting licensing revenue for Scandinavia. And under the NHL’s new domestic television deal with NBC, it no longer pays 50 percent of its international licensing revenue to Versus, which was part of its old deal with NBC.
“We were licensing our players and assets to third parties to grow their business,” Collins said. “Now we’re taking control to grow our business.”
AMI officials did not return calls for this story.
Tim Smart, owner of Medge, called the NHL a “blue-chip brand” in Scandinavia due to the sport’s coverage in print and broadcast media, as well as the history with hockey in Sweden and Finland.
But Smart said the NHL’s television rights were devalued by the ESPN America non-hockey programming and the lack
“As a product it has been very invisible, which was a combination that ESPN is not a successful channel in these markets, and the game was not marketed sufficiently,” Smart said. “They say, ‘We love the brand but we see no ratings.’ That is where we are starting from.”
Sources interviewed for this story agreed that the league should be able to sign deals in Scandinavia, Russia, the Czech Republic and Slovakia, but questioned whether the league would be able to sign deals in Germany, the U.K. and Latin countries, where hockey is not as popular.
“There are a lot of territories in Europe where it makes more sense for [the NHL] to be with ESPN, and they will struggle to get carriage in some markets,” said one source. “Outside of the Nordics and Russia and the Czech Republic, I don’t see where the broadcast options are for them.”
Alan Gold of Evolution Media Capital, who negotiated the tender process for the NHL, said the league’s hands-on approach to its programming, and its greater offering of prime-time games, should turn the tide in the local negotiations.
“Before this current deal, all of the live games were coming in during the middle of the night,” Gold said. “To be able to grow the fan base and get them engaged, you need to deliver games in European prime time.”
Medge’s Smart, who previously purchased NBA rights for French TV channel Canal+, said the league’s commitment to long-term growth in events and media in Europe delivers value. Smart said he does not expect Medge to make a profit on its financial commitment to the NHL this season. The firm has hired Peter Gudmundson, the former CEO and general manager of Sweden’s premier professional hockey league, to work alongside the NHL in establishing and growing events.
“We are prepared to sacrifice significant profits on the league right now because it makes sense to have the longer-term relationship,” Smart said. “We are not just in this to buy and sell the rights; we are looking for longer-term relationships.”
Collins and other NHL officials said the new strategy is the first step in the league’s plan to build a media business in Europe that has a similar focus and structure as its North American operation. The plan includes the eventual launch of the NHL Network in Scandinavia, however officials declined to say when that could happen. Bettman said the league will open an office in London within the year, though he declined to discuss the size of the venture. The league also is deciding how to sell its digital rights in Europe.
According to Collins, the European media strategy will pave the way for an increase in European games, but no definite plans for games can be laid until after the next round of labor negotiations with the NHLPA. Currently, the league is discussing event plans with Creative Artists Agency, and the ideas being considered include a return of the World Cup of Hockey, which was last held in 2004, or a Ryder Cup-style tournament between NHL and European teams.
Harvey Schiller, CEO of GlobalOptions Group and former president of the Atlanta Thrashers, said that of all the professional leagues, the NHL has the best shot at creating a thriving media business abroad.
“It’s a sport that is not completely dominated by American players, which gives it an appeal in Europe,” Schiller said. “In some of the Latin countries they will have a hard time, but across Europe, people talk about hockey. They know what a puck looks like.”
For a glimpse at what the new NHL-NBC deal will look like on television, NBC executives suggest you check out the end of last season.
NBC and Versus will carry more games and produce more shoulder programming around the NHL than ever before. But NBC’s top programming executive said he’s most excited about the production consistency across both channels that the group is trying to achieve.
“What’s new and fun and exciting is actually what’s old,” said Jon Miller, president of programming for NBC Sports and Versus. “When you have a sport as important as the NHL and passionate fans that are tuning in, they appreciate the consistent look and feel.”
Comcast’s recent acquisition of NBC means that games shown on Versus and NBC will look the same. The upcoming season will also feature more shoulder programming.
Another change that will allow Versus and NBC to produce much more hockey programming this year is a 10-year, $187 million deal the NHL signed with NBC in the spring.
“This season, we’re looking to reach beyond the hockey fan,” said John Collins, the NHL’s chief operating officer. “The most important thing for the league right now is to be relevant to the broader sports fan.”
NBC and the NHL believe the key to getting that fan is through more content, more unified marketing and a combined sales effort.
NBC and Versus will split 102 regular-season games: 12 on NBC and 90 on Versus, which will be renamed NBC Sports Network in early January. Last season, the two networks combined for 64 windows.
NBC will carry the Winter Classic, of course. But this year, the network is timing Versus’ name change to NBC Sports Network around the event. The network also plans to produce a national game the Friday after Thanksgiving that it hopes will rival the Winter Classic in popularity.
The added games will be complemented by more shoulder programming. NBC has committed to carrying a pregame and postgame show, “NHL Live,” around each game. Every Wednesday during the regular season, the last 30 minutes of “NBC Sports Talk” will be devoted to NHL commentary. Versus also will produce “NHL Overtime,” with Bill Patrick and Jeremy Roenick.
“The shoulder programming around hockey sends a message that we are the TV home for the NHL,” Miller said.
But it’s the consistency that Miller is particularly excited about. That means the announcing team of Mike Emrick, Eddie Olczyk and Pierre McGuire will call games on the “Game of the Week” telecasts on NBC, as well as Versus’ Wednesday night game.
That consistency also is helping ad sales. In July, the NHL gave NBC oversight of media sales for the league’s national platforms through 2015-16. NBC Sports Group absorbed some NHL media sales employees as part of the deal.
“The interaction with the customer is easier,” said Seth Winter, NBC’s senior vice president of group sales and marketing. “We are operating in an ultimate harmonious state right now.”
Winter would not give specifics, saying that ad sales for NHL games are pacing well ahead of last year, with most advertisers bundling the sale with another sports property on NBC.
“We’re asking people to participate in a deeper way,” Winter said, “We always look to do broader deals.”
League and agency reps aren’t the only people in the NHL who think about how to market hockey — players do as well. Whether it’s trying to decide which stick to endorse, or how to better connect with fans, hockey players have their own opinions on how best to market their sport. We caught up with Los Angeles Kings defenseman Jack Johnson, New York Rangers goalie Henrik Lundqvist, Philadelphia Flyers center Max Talbot, and New York Islanders center John Tavares to get their thoughts.
■ What was your first endorsement, and how did you feel as a player to become involved with sports marketing?
Jack Johnson: It was with Bauer in my first year with L.A., and it felt pretty cool to get paid to wear stuff that I already used. I signed it with one of the reps in a parking lot of a restaurant right next to the arena. Nothing special; we just got it done.
■ How do you think hockey players can bring the sport to a more mainstream sports audience?
Henrik Lundqvist: I think a lot of people, when they think about hockey, still think about the movie “Slap Shot,” like we are players from the 1980s with no teeth who are all quiet. My first few years in the league, the older guys didn’t really like to get in front of the camera or wear suits and do photo shoots and interviews for different companies. I think 10-15 years ago the guys didn’t want to do that part of hockey, to market yourself and the sport. Now it has changed. Younger guys have grown up with media and the Internet and feel more comfortable with that. They realize that it is part of being a hockey player.
■ What do players talk about in regard to the NHL on television? Did guys follow the negotiations last year with NBC?
Johnson: Guys were really talking about the [HBO] 24/7 show, and everyone thought it was awesome to see things in hockey that no one ever gets to see. I would like to see more of that because fans can actually see what a player is like. Whenever you see a hockey interview, they are almost always the same, for better or for worse. You can get a tape recorder out and just replay one hockey interview and that is what you get. I think people are bored with that, so I think the league should do more things where viewers can see hockey players for real.
We’d love to get back on ESPN and some of the other major networks. I have a lot of friends that don’t have Versus. The games they do are great, and it looks good if you have [Versus]. … But I know guys would love to be back on ESPN to get in the spotlight with other sports.
Henrik Lundqvist said today’s players are comfortable in front of the camera.
Lundqvist: It’s a combination of things. If you play for a team, you can’t have [a sponsor] that will conflict with the organization. The money part is of course very important. But if you look at the money and then the workload of what you will have to put into the endorsement, that is another factor. You don’t want to put too much energy into something. You are a hockey player, so your No. 1 job is to have time for that. A lot of times they want you to be doing photo shoots and events and being a spokesperson for the brand, and that might be too much. And it also comes down to image, how you are presented. You want to look good.
■ Which players do you think have done a good job at using endorsements to further their image?
John Tavares: Obviously [Alex] Ovechkin is really good at being outgoing and connecting with people. I think [Sidney] Crosby has also done a good job. He relates to kids in Canada by being a great player and getting them to want to be players, too. He’s the hard-working guy. [Jonathan] Toews is in that similar category. I’m a little bit of a shy guy, but I’m working on being more outgoing. I like to show the way I do my equipment with [equipment supplier] CCM.
■ What is an example of a local sponsorship that helped promote your image?
Max Talbot: My first year I did a commercial for the local BMW dealership with [Evgeni] Malkin and Sergei Gonchar and Colby Armstrong, because they were my friends and I had done business with them. I had greasy hair and a Fu Manchu, and the commercial was so bad and yet so funny at the same time that it became very popular in Pittsburgh. It was even on Jay Leno and it got me a lot of attention, and people got to see my personality and that I like to have fun.
Jack Johnson likes behind-the-scenes footage that highlights the personalities of hockey players.
■ How do you prefer to work with companies when it comes to individual sponsorships?
Johnson: I like it when a brand promotes who you are, like this player wears this skate because he is a finesse player, or uses these pads because he is physical. I’m a pretty All-American kid. I went to college and played on the U.S. national team, and that is my brand, the American kid. That’s how I’ve tried to associate myself. So with Bauer, for example, they put your face on a poster and promote the equipment you wear based on your strengths, and I like that. So you’re reaching out to young kids who play hockey and using the endorsements to grow your brand and image. It works. When I was a kid and went to the local hockey store, I didn’t buy the stick that was necessarily best for me, it was the one that had my favorite player’s name on it.
Who will get the Leafs?
The Ontario Teachers’ Pension Plan is entertaining bids to sell its 66 percent stake in Maple Leaf Sports &
Where the Coyotes roam
The saga of the Phoenix Coyotes’ bankruptcy and potential sale drags into its third season. The last credible buyer,
Take it outside
When the Atlanta Thrashers moved to Winnipeg this year, many in the hockey world wondered if more Sun Belt teams would soon venture to Canada. Dallas, Phoenix, Florida and Nashville have all been mentioned as teams that could find greater success north of the border. In September, Quebecor purchased naming rights to a proposed $400 million NHL arena in Quebec City. Other rumors have linked investors in Hamilton, Ontario, to planning a bid for a team.
Fired up for the Lightning
Once considered another example of the NHL’s shaky Sun Belt expansion, the Tampa Bay Lightning has blossomed into
The league’s collective-bargaining agreement expires on Sept. 15, 2012, and NHL Deputy Commissioner Bill Daly has said he does not anticipate the negotiations to be “particularly contentious or prolonged.” The league will not be looking to overhaul its economic system as it did in 2004, which led to the loss of the season. NHLPA Executive Director Donald Fehr will be entering his first negotiations with the NHL. He has said that players are unhappy with the current escrow system, which allows the league to hold a percentage of players’ salaries in escrow until the end of the season. But Fehr has declined to say whether the players would push to eliminate the system.
NHL Network gets a boost
One of the major selling points in the NHL’s television deal with NBC/Comcast was NBC’s
Hockey and Thanksgiving leftovers
NBC will kick off its 2011-12 national broadcast schedule on Nov. 25, the Friday after Thanksgiving. Details of the broadcasts have yet to be announced, however NBC and the NHL want to expand the day into a special programming day, much like the 2011 Hockey Day in America. League chatter hints at the day receiving title sponsorship and multigame telecasts.
It’s been nearly three years since former owner Hicks Sports Group defaulted on $525 million in loans, and this past
Head injuries grabbed center ice earlier this year as Pittsburgh Penguins star Sidney Crosby sat out the second half of last