Read the debate intro and Sports Geek’s argument that the NHL made a mistake in agreeing to a television contract with the Versus Network.
The NHL has never been mistaken as a television-friendly league. Although hockey is one of the most exciting sports to watch in person, there is something left to be desired when watching the game at home. Innovations such as Fox’s “Puck-Tracker” have been tried over recent years, all in an attempt to enhance the television experience. But, the success of those innovations has been very limited. When matched up against the NFL, NBA, or MLB on television, the NHL does not stand a chance.
Then the lockout of the 2004 season came along. For a league that already lacked substantial television revenues, the last thing the NHL could afford was to cancel an entire season of play because of a labor dispute. That is exactly what took place, though. The NHL teetered on the brink of falling into obscurity. During the lockout period it was very easy for casual fans of the sport to forget about hockey altogether. Unlike the MLB strike of 1994, or the NBA lockout which took place in 1998, the NHL lacked a broad enough fan base to keep the game relevant. As a result, when the labor dispute was finally settled in 2005 the NHL had very little bargaining power for how its games would be televised.
The Comcast-owned Outdoor Living Network (OLN), which at the time was striving to stake a claim as a major competitor in sports broadcasting, saw an opportunity to capitalize on the NHL’s situation and made a very lucrative offer to the NHL for the broadcasting rights to its games. In response, ESPN president George Bodenheimer, declined to match OLN’s offer, saying that “given the prolonged work stoppage and the league’s TV ratings history, no financial model even remotely supports the contract terms offered.” Basically, Bodenheimer implied that OLN (which would eventually become the Versus Network) was offering the NHL more than it was worth, and that this deal was the best that the NHL could hope for.
Although the league failed to achieve the same ratings levels it did while partnered with ESPN, the NHL has seen steady and consistent growth in viewership while partnering with Versus. Since returning to play in 2005, the NHL on Versus has resulted in regular season television ratings of 0.2 for the 2005 and 2006 seasons, and 0.3 for the 2007 and 2008 seasons. For the Stanley Cup, ratings have doubled from 0.9 in 2005 up to 1.8 in 2008, a number that is very impressive when you consider that the mighty NBC only earned a 1.6 rating during the 2007 Stanley Cup matchup between the Mighty Ducks of Anaheim and the Ottowa Senators. The most positive indication that the NHL-Versus partnership is successful came during the first round of the 2008 NHL playoffs, when Versus realized an increase in viewership of 26.7%.
Despite the growth, it is hard to deny the negative impact that will be felt by the NHL as a result of DirecTV’s dispute with Comcast, the parent company of the Versus network, especially if it continues for any substantial length of time. Undoubtedly ratings for the NHL will decline. What is most important to keep in mind, however, is that the Versus deal was right for the NHL at the time that it was made (and subsequently extended). The drop in ratings which is felt by the NHL as a result of this dispute will be short-lived. Upon resolution of the disagreement, the drop will be immediately corrected and the ratings will return instantly to their consistent growth. In the worst-case scenario – if DirecTV and Comcast are unable to resolve this dispute (an outcome that I believe is HIGHLY unlikely) – then the NHL has the option of seeking a new agreement with another broadcast partner (such as ESPN). That does not guarantee the NHL will find a BETTER offer.
The deal with Versus has been very beneficial for the NHL. The league has never truly been successful in the television marketplace, and after the lockout of the 2004 season, the league had very low expectations for its return to play in 2005. Thanks in part to the eagerness of a fledgling cable network the NHL was still able to land a very beneficial television deal which has since resulted in sustained growth for the viewership of the league. They took the best offer on the table at the time, and it has rewarded them with consistent success ever since.
