How the NHL's Lockout Hurts NBC (Analysis)
The Hollywood Reporter -- This story first appeared in the Dec. 21 issue of The Hollywood Reporter magazine.
It's sudden death for the players and owners of the National Hockey League, whose talks to end a months-long lockout abruptly broke down Dec. 6 (four days later, the league canceled all games through Dec. 30). Among victims of the debilitating labor stalemate is NBC Sports Group, which signed a 10-year, $1.9 billion rights deal with the NHL in 2011, hoping to cash in on hockey's growing popularity in the U.S.
PHOTOS: 26 of Hollywood's Most Popular Athletes-Turned-Actors
When the Los Angeles Kings won their first Stanley Cup in June, it looked as if the NHL -- a perennial also-ran to the NFL, Major League Baseball and the NBA -- was on the cusp of becoming an American A-list sport (with such Hollywood fans as Matthew Perry, James Gandolfini and Jerry Bruckheimer). Last season's Stanley Cup Playoffs averaged 1.09 million viewers through three rounds on NBC, NBC Sports Network and CNBC -- the most-watched postseason in 15 years -- and the NHL generated estimated ad revenue of $149 million from NBC Sports Net and NBC in 2011-12, according to Kantar Media. That was a nearly 50 percent increase compared with the previous season's $101 million and almost double what the league generated from ads during the 2009-10 season.
If the 2012-13 season is scrapped, then NBC won't pay a rights fee this year and will add a year to its contract. But the NHL deal is a pillar of its nascent sports network, and a repeat of the canceled 2004-05 season could seriously damage the pro hockey brand. "I wouldn't be surprised if NBC has stuck their head into [lockout] negotiations," says Patrick Rishe, director of sports market research firm Sportsimpacts. The longer the sides remain at loggerheads over how to share revenue, the more damage to NBC.
"If the lockout goes for a week or a month, fans stay interested. But if it's longer, and watching the NHL stops being a habit, then the NHL is in trouble," says Kenneth Wong, a marketing professor at Queen's University in Ontario.
STORY: NHL Lockout Has Kraft Canada Shifting TV Ad Dollars to Junior Hockey
NBC Sports Net has filled schedule holes with college hockey, boxing, soccer and college basketball. In Canada, the CBC network stands to lose an estimated $180 million in ad revenue if the NHL season is axed.
Still, while damage to the NHL brand could be hard to fix, other leagues -- like the NBA last season -- have returned from labor strife to strong ratings. "Hockey fans are die-hards," says Rishe. "As long as the NHL comes back, the damage will be minimal."
Related article on THR.com:
NHL Cancels Another 104 Hockey Games Through December 30
_ _ _ _
Find more online: THR.com
Real 'RHOC' Dish
"Real Housewives of OC" star Shannon Beador dishes about her family, her relationship with Vicki Gunvalson and what to expect from the reunion!Watch Video »
Lazy 'New Kid'
In this week's Celebritweets Theater, Jordan Knight gets a stern talking-to by Joey McIntyre and Donny Wahlberg.Watch Video »
Fall's Best Looks
New fashion trends are here! Take a look at celebrities rocking fall's best looks so far.Watch Video »
Tats for Love
From Heidi Klum and Seal to Ryan Sweeting and Kaley Cuoco, see which stars got tattoos for love.Watch Video »
Sofia Vergara poses in a revealing neon bikini while her "Modern Family" castmates hit the beach in Australia on Celebs Gone Social.Watch Video »
Take a look back at six times Kylie Jenner wore the exact same outfit as big sis Kim Kardashian West.Watch Video »
Like us on Facebook?
From Crowd Ignite