Boston Bruins Center Charlie Coyle (13) passes the puck while the Pittsburgh Penguins left wing Zach Aston-Reese (12), in the third phase of the NHL game between the Pittsburgh Penguins and the Boston Bruins on April 25, 2021 Defending at PPG Paints Arena in Pittsburgh, PA.
Jeanine Leech | Icon Sportswire | Getty Images
The National Hockey League secured the final part of their media rights increase and thanks WarnerMedia of AT&T for their contribution.
WarnerMedia’s NHL and Turner Sports have agreed on a deal that will give the network its secondary hockey rights for more than $ 1 billion over a seven-year period. Turner will win three Stanley Cups, one of the NHL conference playoffs (ESPN has first rights) and the Winter Classic as part of the package, Turner Sports announced on Tuesday.
With the NHL willing to return to ESPN for more than $ 400 million a year, and Turner now expected to pay $ 225 million a year, the NHL is increasing its rights fees to more than $ 625 million, versus approximately $ 300 million in agreements with NBCUniversal and for streaming, Disney.
The NHL’s 10-year partnership with NBC Sports now ends after this season.
“I think NBC and NHL have done a lot for each other over the past 16 years,” said Lee Berke, longtime sports media rights advisor. “The challenge for NBC was that ESPN would consume more than the majority of the Stanley Cups and a large amount of NHL content. What was left was a smaller package than before for NBC and something that would cost more than that current rights fee. “
And now, NHL and Turner are about to form a partnership that seems strange but could still work if WarnerMedia brings the sport to its HBO Max streaming service.
Did Turner Pay Too Much?
In some media circles, the NHL’s move to Turner came as a surprise. Few expected the NHL to leave NBC, which partnered with the NHL in 2011 for $ 1.9 billion. NBC helped the NHL after a lockout that canceled the 2004/05 season and attracted limited interest from other networks.
Behind the scenes, the gossip suggested that NBC was only willing to pay just over $ 100 million a year for the rights. But Turner came in with a bazooka and offered his deal. It was announced on Monday that NBC had pulled out and the deal was officially announced on Tuesday.
Hockey attendance usually lags behind other sports, mostly the National Football League and the National Basketball Association, but the NHL has a dedicated fan base. Hence the new bet ESPN and WarnerMedia believe they can entice these fans to sign up for their streaming services with NHL content.
The thing is, will Turner attract more than $ 200 million in hockey revenue to pay for those rights? NBC knows what the hockey show pulls in annually and was unwilling to pay the raise. And the move could also put Commissioner Gary Bettman’s league at risk.
The NHL is losing a broadcast network and switching more to cable, which is in decline. If it had stayed with NBC, the NHL would have filmed its Stanley Cup content on two broadcast networks, NBC and ABC, and the Winter Classic would have stayed in the broadcast network’s spotlight as well.
But by choosing Turner, the NHL is getting a cross-promotion with the NBA and college basketball games. And Turner receives another sports package for the fall that can lead to coverage of Major League Baseball.
The network sees innovation in terms of hockey presentations and knows again that NHL fans will follow suit. Turner plans to include Bleacher Report in its coverage, entice sports betting, and have flexibility in agreeing to put NHL games on HBO Max when the service is ready to host live sports.
Octagon Media Manager Dan Cohen said, “Since Turner missed out on PGA Tour media rights, you knew they needed to add a fourth pillar to their sports portfolio (NBA, MLB, March Madness), and now [WarnerMedia News and Sports Chairman] Jeff Zucker did the job. Late for the game in the sports streaming arena, HBO Max now has a number of NHL rights that attract a young, diverse first-time digital audience. “
Berke called the NHL’s rights increase a “signature moment”, pointing out that the league was charging more fees in Canada than in the US
“When I’m in the NHL, I’m excited,” said Berke. “I more than doubled my rights fee. I have ESPN, which has a strong year-round sponsorship of the sport across all platforms. I have a new entry at Turner who has done a great job at the NBA and MLB.”
Javier Hernandez # 14 of the Los Angeles Galaxy scores a goal during a game between the New York Red Bulls and the Los Angeles Galaxy at Dignity Health Sports Park on April 25, 2021 in Carson, California.
Michael Janosz | Getty Images
The MLS could be a winner
NBC could have used the NHL content to further expand its Peacock streaming service, but again, it would pay more for less. And the network has to think about upcoming contracts with NASCAR and Premier League.
“It’s going to be a very competitive market,” said Berke of the global soccer league. “And NBC has shown that soccer fans tend to be younger, tech-savvy, and willing to subscribe to streaming services to get that content.”
Major League Soccer could benefit from the NHL change here.
The MLS media rights shouldn’t cost too much as they are still under construction and have more to prove in the TV viewer realm. MLS had a small run on NBC from 2012 to 2014, and now that the network has extra cash on hand, MLS could be on the radar.
The league is growing with younger audiences, has a new market in Austin, and with Sacramento on hold, Las Vegas could be next. MLS receives approximately $ 90 million annually in ongoing agreements with ESPN and Fox Sports. The offers run through the 2022 season.
Disclosure: NBCUniversal is the parent company of CNBC.