NHL moving to Turner Sports is $1 billion risk-reward for hockey

NHL moving to Turner Sports is  billion risk-reward for hockey [ad_1]

Boston Bruins Center Charlie Coyle (13) passes the puck whereas Pittsburgh Penguins Left Wing Zach Aston-Reese (12) defends in the course of the third interval within the NHL sport between the Pittsburgh Penguins and the Boston Bruins on April 25, 2021, at PPG Paints Arena in Pittsburgh, PA.

Jeanine Leech | Icon Sportswire | Getty Images

The National Hockey League secured the ultimate a part of its media rights improve, and it might probably thank AT&T‘s WarnerMedia for stepping in.

The NHL and WarnerMedia’s Turner Sports agreed to a deal that may see the community land its second-tier hockey rights for greater than $1 billion over seven years. Turner will land three Stanley Cups, one of many NHL convention playoff rounds (ESPN has first rights) as a part of the package deal, and the Winter Classic, Turner Sports introduced Tuesday.

With the NHL agreeing to return to ESPN for over $400 million per year, and Turner now anticipated to pay $225 per 12 months, the NHL will increase its rights charges to greater than $625 million, up from roughly $300 million in agreements with NBCUniversal and Disney (for streaming).

The NHL’s 10-year partnership with NBC Sports now ends after this season.

“I think NBC and NHL have done a lot for one another over the last 16 years,” mentioned longtime sports activities media rights advisor Lee Berke. “The challenge for NBC was ESPN took more than the majority of the Stanley Cups and a huge amount of NHL content. What was left was a small package than previously for NBC and something that was going to cost more than their current rights fee.”

And now, the NHL and Turner will enter a partnership that seems odd, however might nonetheless work if WarnerMedia brings the game to its HBO Max streaming service.

Did Turner overpay?

In some media circles, the NHL’s transfer to Turner was a shock. Few anticipated the NHL to depart NBC, which shaped a $1.9 billion partnership with the NHL in 2011. NBC helped the NHL revive following a lockout that canceled the 2004-05 season and attracted restricted curiosity from different networks.

Behind the scenes, the chatter prompt NBC was solely keen to pay simply over $100 million per 12 months for the rights. But Turner got here in with a cash bazooka and provided its deal. On Monday, phrase leaked that NBC had pulled out, and the deal was formally introduced on Tuesday.

Hockey viewership normally trails different sports activities, primarily the National Football League and National Basketball Association, however the NHL has a devoted fan base. Hence, the brand new guess is ESPN and WarnerMedia consider they will lure these followers into signing up for their streaming companies utilizing NHL content material.

The factor is, will Turner entice greater than $200 million value of hockey income to assist pay for these rights? NBC is aware of what hockey broadcast attracts yearly and wasn’t keen to pay the rise. And the transfer might be a threat for Commissioner Gary Bettman’s league, too.

The NHL loses a broadcast community and transitions extra to cable, which is on the decline. Staying with NBC, the NHL would’ve had its Stanley Cup content material rotated on two broadcast networks (NBC and ABC), and the Winter Classic would’ve remained within the broadcast community highlight too.

But by selecting Turner, the NHL will get some cross-promotion with the NBA and faculty basketball video games. And Turner will get one other fall into summer time sports activities package deal that may lead to its Major League Baseball protection.

The community sees innovation round hockey presentations, and once more, it is aware of NHL followers will observe. Turner plans to incorporate Bleacher Report into its protection, lure sports activities betting alternatives and have flexibility within the deal to put NHL video games on HBO Max when the service is prepared to host reside sports activities.

Said Octagon media govt Dan Cohen: “Since Turner missed out on the PGA Tour’s media rights, you knew they had to add a fourth pillar to their sports portfolio (NBA, MLB, March Madness), and now [WarnerMedia news and sports president] Jeff Zucker has completed that task. HBO Max, which has been late to the game in the sports streaming space now has an immediate set of NHL rights that attract young, diverse digital first audiences.”

Berke known as the NHL’s rights improve a “signature moment,” mentioning the league solicited extra charges in Canada than the U.S.

“If I’m the NHL, I’m thrilled,” Berke mentioned. “I’ve more than doubled my rights fee. I’ve got ESPN promoting the sports heavily throughout the year on all platforms. I’ve got a new entrance with Turner, which has done a great job with the NBA and MLB.”

Javier Hernandez #14 of the Los Angeles Galaxy takes a shot on purpose throughout a sport between New York Red Bulls and Los Angeles Galaxy at Dignity Health Sports Park on April 25, 2021 in Carson, California.

Michael Janosz | Getty Images

The MLS might be a winner

NBC might’ve additionally used the NHL content material to proceed constructing its Peacock streaming service, however once more, it might be paying extra for much less. And the community has to take into consideration upcoming offers with NASCAR and Premier League.

“That’s going to be a very competitive marketplace,” mentioned Berke of the worldwide soccer league. “And NBC has shown that soccer fans tend to trend younger, be tech-savvy, and willing to subscribe to streaming services to obtain that content.”

It’s right here Major League Soccer may gain advantage from the NHL moving.

The MLS’ media rights should not value an excessive amount of because it is nonetheless constructing and desires to show extra on the TV viewership entrance. MLS had a small run on NBC from 2012-2014, and now that the community has more money to play with, MLS might be on its radar.

The league is rising amongst youthful viewers, has a brand new market in Austin, and with Sacramento on maintain, Las Vegas might be subsequent. MLS will get roughly $90 million a 12 months in present agreements with ESPN and Fox Sports. The offers run by the 2022 season.

Disclosure: NBCUniversal is the father or mother firm of CNBC.


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