BROADCAST UPDATE – WHY IT MATTERS:
For the past several years I’ve followed changes in the NHL broadcast landscape. The departure from NBC and move to ABC/ESPN along with “Bally Sports” and TNT has shown issues. Bally (now Fan Duel) declared bankruptcy. Now, there are major changes at ESPN.
THE CHANGES
Fist, ESPN found themselves in a bidding war for the NBA. The league was given a massive raise with a deal worth 7B annually across all platforms. ESPN had to increase spend from 1.2B to over 2B starting next season. (TNT lost the NBA to NBC, more on that in another post).
Second, the MLB is departing the network. The network offered less revenue for an extension on the current deal. ESPN cited shrinking returns. The MLB was not happy with the offer, and the decision ensued. (It should be noted that a stand alone MLB service has been in the works for about 2 years.)
Third, ESPN has announced that their stand alone service will be ready in the fall. The new flagship service is currently priced at $30 per month. However, it could also signal a departure from traditional broadcast.
Parent company ABC/Disney have worked diligently to create a robust streaming service to compete with NETFLIX and AMAZON. The bundled offering of Disney+, Hulu and ESPN will be a one stop service, but pricing will be similar to a cable package.
THE NBA DEAL
After the NBA negotiated the new impressive package with ESPN, NBC and Amazon there was an important development. NBA viewership has struggled with an average of 1.5 million per broadcast. ESPN is carefully weighing where to spend and where to save. The MLB could signal issues for the NHL.
The NHL is looking for an increase in broadcast revenue. These circumstances may be at odds with each other. Reports of NHL ratings at 445k averages are concerning. At roughly 1/3 of the NBA, it may be a tough negotiation. However, another option may present itself. Could ESPN be a primary partner for local broadcasts? It would take a major effort, but it isn’t impossible.
THE MLB FALLOUT
Major League Baseball felt like the product has been growing. ESPN showed losses in revenue. If a similar issue with the NHL exists, it could be problematic. With the added expense of the new NBA deal, numbers will be closely reviewed.
The next set of negotiations will be interesting. ESPN isn’t the primary provider for most markets. That NHL may have to include more content in the next deal or see a potential drop in the commitment. That could add value to the ESPN service.
ESPN STAND ALONE SERVICE
ESPN has seen a change in consumer habits. As customers assess what they do and don’t watch, cord cutting ensues. Once they no longer have all of the channels, a choice comes as to where to invest. As with Fan Duel, ESPN is looking to offer something less expensive than a full cable package.
Moving to a stand alone model relies on customers being willing to subscribe. The initial 11.99 offering of ESPN+ is still available, but ESPN and ESPN2 content aren’t included. Those can only be viewed with a long in based on cable provider. The more robust platform could provide a stronger presence.
The NHL may have an opportunity to do more with the provider. If a $30 service could provide more access there is a promising opportunity. Give fans the ability to shrink the viewership portfolio. It’s worth exploring the possibility of an increased relationship.
THE BOTTOM LINE
The NHL is at an important crossroads. A projected tiered cap raise needs growth in income. If the MLB negotiations are a precursor, there may be an issue ahead. A static or reduced broadcast deal could hit hard in those projections.
Fans are feeling the pinch of multiple subscriptions. Making sure the broadcast is available across income brackets is a must. A shift away from regional carriers and toward a centralized broadcast would be ideal. The new platform may offer stability if that can be accommodated.
It may take creativity and effort but the league needs to get in front of the issue. Placing the onus on fans to sort out multiple platforms is taking a toll. Offering an easy one stop solution could breathe new life into the fan base. That could be a win for everyone. The new venture with ESPN may offer a chance to see that accomplished.
Would be nice if ESPN creates a series of hockey panel shows (similar to NFL This Morning) or partners with NHL on XM to broadcast their daily shows by adding a camera in the studio. That kind of stuff would be great in addition to just airing the games. Just my two cents …
That’s a great idea. There are a lot of untapped resources when it comes to NHL coverage. It would resonate well with the fan base. Nice drop in!