SBJ/June 24-30, 2013/Leagues and Governing Bodies

NHL projects a $1B boost in revenue

Strong season, new games, deals fuel expected three-year increase

While enjoying his team’s run to the Stanley Cup Final, Chicago Blackhawks owner and chairman Rocky Wirtz spoke optimistically of the league’s overall business last week — to the tune of an additional $1 billion coming to the NHL.

“We’re going to add another billion dollars in gross revenue in the very near future,” Wirtz said while with his team in Boston. “The CBA is long-term [10 years, with opt-outs for the league and players after eight], and now the focus is on growth. I’m extremely happy about the future of the NHL.”

Wirtz isn’t alone in having that billion-dollar vision in this first year under the new collective-bargaining agreement. According to sources at the team and league levels, NHL executives informed the league’s audit and finance committee at a meeting on June 10 that the league projects bringing in an additional $1 billion of cumulative revenue over the next three seasons.

Bruins-Blackhawks is finishing off
a solid comeback year for the NHL.
Photo by: CHRISTOPHER BOTTA / STAFF
In 2011-12, the NHL’s last full season prior to this year’s lockout-shortened campaign, revenue totaled $3.2 billion. This year, with teams having played 48 regular-season games each, revenue is expected to be $2.4 billion. That’s 72 percent of the revenue with 58 percent of the games played.

The league has reason to be confident in the potential for that billion-dollar jolt. The NHL is producing six outdoor games next season: the Winter Classic, the Heritage Classic in Canada, and four games branded as the Coors Light NHL Stadium Series. League officials are poised for sponsorship additions (see item below). And by the end of this summer, negotiations are expected to begin for Canadian media rights deals. The Canadian Broadcasting Corp.’s agreement for the iconic “Hockey Night in Canada” expires at the end of next season. With TSN and Sportsnet looking to bid, the price is expected to rise significantly from the current six-year pact that pays $100 million annually.

THE SUITE LIFE: NHL and NBC staff hosted more than 50 sponsors, prospects and agency executives in a center-ice suite during Game 4 on Wednesday. Among the NHL executives in attendance were Deputy Commissioner Bill Daly and COO John Collins.

“The finals are a time to have fun with partners and prospective partners,” said Keith Wachtel, NHL senior vice president of integrated sales and marketing, during the second intermission, while sitting next to Seth Winter, NBC executive vice president of sales and marketing, at a table by the bar. “At the Winter Classic and the All-Star Game, there’s a lot of activation and meetings around the events. Here, it’s more of a celebration at the end of the season. The games are huge in importance, so let everyone enjoy it.”

Near the start of this abbreviated NHL season, Wachtel said he expected some new deals to be announced in the coming months. Asked if he had officially closed any new business, Wachtel said announcements would be made in the offseason about new partners and renewals. Open categories in the U.S. include men’s personal care, consumer electronics, and travel and tourism.

Winter chimed in with a possible preview. “Look at technology as a ripe category,” he said. “We’re seeing a lot of interest there.”

Wachtel pointed out that 40 percent of NBC and NBC Sports Network advertisers are NHL partners. Wachtel and Winter share notes on an almost daily basis. Winter cited the insurance company John Hancock, which had guests in the suite, as an NBC sponsor that could become an NHL partner.

“We work hand-in-hand with NBC and complement each other well,” Wachtel said.

A RELAXED WIRTZ: This is Chicago’s second trip to the Final in four years, but Wirtz said this year’s run is much different for him than the team’s Cup-winning drive of 2010. He’s more relaxed.

After winning the Stanley Cup three years ago, Rocky Wirtz is enjoying the ride.
Photo by: GETTY IMAGES
“I’m enjoying this,” Wirtz said. “Last time, we had the monkey on our backs of not having won the Cup in 49 years. I’m really proud of this team and how the players and the staff came together after the lockout. There was no animosity from the players; just professionalism, and everyone worked together.”

Although the Blackhawks have sold out 227 consecutive games at the United Center (regular-season and playoffs), Wirtz maintained that the Blackhawks are still not profitable, though things have improved since he took ownership in 2007.

“Maybe in two or three years,” he said of profitability, “especially if our sponsorship sales continue to increase.”

According to Wirtz, the Blackhawks still have six years left on their local television contract with Comcast SportsNet Chicago, which he owns with Cubs owner Tom Ricketts, Bulls and White Sox owner Jerry Reinsdorf, and NBC Universal. The team’s regular-season games averaged a 5.3 rating, up 73 percent from last season.

“Six years ago, more people in Chicago were watching the Home Shopping Network than our games,” Wirtz said, laughing. “We couldn’t even get a 1.0.”

At the United Center, the Blackhawks have capped season-ticket sales at 14,200 but have a waiting list of 12,000, and they’ve raised ticket prices by an average of 16 percent for next season.

Chicago has led the league in attendance the past five seasons, averaging more than 21,700 fans per game this year.

Unlike in 2010, when salary cap issues forced the team to trade a few key players after winning the Cup, Wirtz believes the current club will contend for a while.

“Gary Bettman and Bill Daly did a great job with the CBA,” Wirtz said. “It’s going to allow teams to keep their cores. The key for us, and for every team, is going to be player development. That’s one area where I want to see us continue to improve. I want to take these teenage prospects we get in the draft and make sure we’re doing everything possible to help them succeed. Teams that don’t develop players properly will be flash-in-the-pans — if they’re fortunate enough to win once.”

NEW TECHNOLOGY FOR NBC: Beginning with Game 3 in Boston, NBC/NBC Sports Network introduced what’s called Dreamcatcher technology to its Cup Final broadcasts. Using a high-res, 4K camera (which has horizontal resolution) to take a shot of the entire ice surface from a balcony behind one of the goals, Dreamcatcher can zoom in to capture any image on the ice, providing a type of enhancement previously not available for the NHL coverage.

“Since the camera covers the entire ice, it protects us against missing anything,” said NBC Sports executive producer Sam Flood. “If a puck is tipped for a goal, we can zoom in to any place on the ice and get the best shot of the deflection. There is no pixilation. You don’t lose the quality of the image.”

A product of Evertz Microsystems, Dreamcatcher will be used by NBC, Flood said, in its coverage of the network’s other sports properties, including the NFL.

“It’s great technology for hockey, but it will be very useful for football and other sports,” he said (see related story).

Although he is executive producer for NBC Sports, Flood, a former hockey player at Williams College, does not hesitate to get in the truck and serve as producer for all of the networks’ coverage of the Final. Flood also
Scenes from Boston: Welcome banner at TD Garden; more than 400 writers were credentialed for Game 4; the Stanley (ice) Cup; staffers load Blackhawks equipment after the game.
Photos by: CHRISTOPHER BOTTA (4)
produces “Football Night in America.”

“When Tommy Roy was the executive producer of NBC Sports, he was still the greatest producer, so he went out and produced golf,” said Flood, speaking while the Bruins had their morning skate in preparation for Game 4 on Wednesday. “I’m following in the tradition of Tommy, who showed that the executive producer should produce as well.”

VISA GOES SMALL: Visa Canada activated from mid-May through the Final with its #smallenfreuden campaign, which encouraged customers to make small purchases with their credit card. The Small Play of the Game contest gave fans a chance to vote between two plays in a game from the night before that made a big difference. Prizes for participants included hockey jerseys and pre-paid Visa cards.

According to Brenda Woods, Visa Canada’s head of marketing, a Small Play of the Game app was downloaded by more than 15,000 fans as of June 11. The promotion was a joint effort involving both the NHL and NHL Players’ Association. Assisting were NHL players Steve Ott, Scott Hartnell, Kevin Bieksa, Matt Duchene and P.K. Subban, who provided commentary on their personal Twitter pages. The #smallenfreuden hashtag additionally was tweeted more than 7,000 times in the first five weeks of the campaign.

The little things add up for Visa Canada in its current NHL-based promotion.
Also during the campaign, Visa cardholders who used their cards for purchases of less than $100 were entered into a sweepstakes to win a trip for four to both the 2014 Winter Classic and a 2014 Stanley Cup Final game.

Visa Canada, which signed a three-year extension of its deal with the NHL and NHLPA in November 2011, is the exclusive payment service for the NHL in Canada and has rights to all league events in the country.

HONDA PRAISES BIG EVENTS: The NHL does not have a sponsor activation zone at the Final, but Tom Peyton still made the trip from Honda’s headquarters in Southern California to Boston last week.

“I like going in-person when possible, because then you can really appreciate the passion of the fans,” said Peyton, American Honda Motor Co.’s assistant vice president of advertising and marketing. “I go to plenty of big games in my job, but nothing really matches what you see from NHL fans.”

Honda has one season left on the NHL partnership renewal it signed in September 2011. During the Final, Honda had spots running on NBC and NBC Sports Network’s telecasts and, in-arena, it had exclusivity in the auto manufacturer category, with dasherboard advertisements at the TD Bank Garden and United Center. “Our competitors get their ads taken off the boards, which we like,” Peyton said with a laugh.

Peyton is excited about next year’s four-game outdoor stadium series, with one of those games being near Honda’s home: Los Angeles will play Anaheim at Dodger Stadium on Jan. 25. At the Winter Classic, Honda has Zamboni wraps, gives a vehicle to a charity chosen by the winning team and displays its cars at the league’s activation area.

“We don’t know yet what we’ll do as part of the stadium series, but I can tell you that we really like having our cars at big events,” Peyton said. “Give the NHL credit for expanding the stadium games. During the regular season, no league equals the kind of major events and big platforms that the NHL provides to sponsors.”

SCENE & HEARD: NHL ice guru Dan Craig, who carries the more formal title of senior director of facilities operations, said he welcomes the challenge of multiple outdoor games next season, including the one at Dodger Stadium. “I look at it like a hockey player,” Craig said while watching the second period of Game 4 at rink level. “If your team is on a 5-on-3 penalty kill, and the coach taps you on the shoulder, you don’t wave him off. You go in and do everything you can. We can handle six stadium games.” … Jim Haskins, NHL group vice president, consumer products licensing, projected that merchandise sales for the this year’s Final would at least triple sales from last year’s Los Angeles-New Jersey Final. “The biggest reason is the obvious one: Two big markets with huge fan bases,” Haskins said. “With the finals starting later than usual, our retailers were also able to make a lot of sales around Father’s Day.” … MeiGray Group President Barry Meisel said all 40 of the Bruins jerseys worn during the Final that his company put up for sale at the start of the series were sold out within 48 hours. Meisel sold the jerseys to his regular base of collectors without opening bidding online to the general public because he was satisfied by the prices. Goaltender Tuukka Rask’s jersey went for the highest price, at $6,500, presumably from a bidder betting that the goalie would win the Conn Smythe Trophy as playoff MVP. Jaromir Jagr’s went for $6,000. In total, the 40 jerseys — 20 worn at home, 20 in Chicago — were sold for more than $100,000. MeiGray, which does not work with the Blackhawks, has deals with nine NHL teams to sell their game-worn jerseys.

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