News

Skating on Thin Ice

8/08/2004 8:00 PM Eastern

The National Hockey League mapped out its national TV plans for the 2004-05 season on May 19. But three months later, it’s still unclear whether those plans are going awry, playing havoc with planned hockey coverage on ESPN, NBC or Fox Sports Net’s various regional sports networks.

The league’s collective bargaining agreement with the National Hockey League Players Association expires on Sept. 15, which could result in the upcoming campaign getting delayed — or iced entirely. The first regular-season pucks are set to drop on Oct. 13.

Meetings between the league and the NHLPA last month produced a number of proposals, but no real movement. Subsequent pronouncements by the NHL and its teams about layoffs have been prevalent.

“There hasn’t been anything that led us to believe that there will be a problem,” says ESPN vice president of programming and production Mark Quenzell. “Maybe when it’s going to cost people paychecks, something will begin to happen.”

“We’ve had a number of discussions with the NHL and briefings with teams and individual owners,” says Fox Sports Net president Bob Thompson. “This is very important programming to a lot of viewers. You want something to be resolved, but there are a lot of economic issues.”

The league and its players met again on Aug. 4 and were scheduled to reconvene on Aug. 17. The NHL didn’t return phone calls by press time.

At the heart of the impasse: player salaries, which absorb about 70%-75% of the league’s revenues, and a sea of losses. A report compiled by financier and former Securities & Exchange Commission chairman Arthur Levitt on behalf of the league/owners says the league collectively lost $273 million during the 2002-03 season, with 19 of the 30 teams finishing in the red. The NHLPA has characterized the report as league rhetoric, but has yet to publicly punch any significant holes in it.

Thus, the parties remained entrenched: Ownership is seeking a salary cap of around $31 million per team, while the players are trying not to put a crimp on a system that has seen the average salary rise 250% over the past five years.

The puck men may have to revisit their economic realities, though, or see their season cast into an empty net.

While the National Football League, National Basketball Association and Major League Baseball have national TV contracts that yield a respective average of $77 million, $26 million and $12 million to each of their franchises, NHL teams received about $5 million per year, according to the Canadian Press news service.

Given the economic overhang and small ratings, ESPN Inc., according to sources, is paying around $60 million through a one-year renewal covering the 2004-05 season. That’s half of what was doled out under the prior five-year, $600 million pact from ESPN and sister network ABC.

The deal gives exclusive rights to the first two games of the Stanley Cup Finals, as well as the NHL All-Star Game for the first time. The ESPN arrangement, which includes options for the following two seasons, gives the total sports network and ESPN2 exclusivity during conference-finals telecasts, plus additional exclusivities during conference-semifinal series. ESPN2 will have 40 exclusive regular-season games — 23 on Wednesdays and 17 on Sundays.

“The playoffs have not been a bad story for us. The regular season has been disappointing to the NHL and to us. We think there has been too much inventory; we think we have the right number of games now, and we’ll have scheduling that will highlight the big teams and profile the marquee players,” Quenzell says, noting that ESPN will add a sideline reporter to its games and hopes to mike up players and coaches.

Quenzell notes that exclusivity will also aid ESPN’s Nielsen cause. “In markets within a 100-mile radius of the participating teams, the NHL has been as strong as other sports,” he says. “Exclusivity is going to help us.”

Replacing ABC is NBC, which reached a revenue-sharing, no-rights-fee pact with the NHL hours before ESPN announced its new deal. The Peacock, which will share ad dollars with the league after recovering its production costs, will present games three through seven of the Stanley Cup Finals, as well as seven regionalized Saturday regular-season and playoff games.

An NBC spokesman says the network would update its NHL ad sales when executives return from the Summer Olympics in Athens. NBC plans to provide regionalized action via its own crews. He says the network’s multiyear pact would carry over, “no matter when the NHL resumes play.”

Similarly, Quenzell says that ESPN has “provisions for every scenario. There are various options and clauses. We’re pretty well covered.”

As to substitute fare, Quenzell says a definitive schedule hasn’t been hashed out yet: “You’ll probably see a little more poker. [ESPN has the rights to the World Series of Poker.] We’ll also look to some more college football and basketball.”

Thompson says viewers of FSN owned and affiliated RSNs would likely get additional runs of The Best Damn Sports Show Period. At press time, the different RSNs were also going ahead with plans to produce preview and magazine shows related to the teams they cover. The regionals would also likely encore some previously played NHL games, or to try to add NBA games, where possible.

If the signs pointed to a very protracted work stoppage, Thompson says Fox Sports Net would acquire other programming. “The question is whether deals come with guaranteed clearances,” he says. “If the NHL comes back quickly, when do you run the acquired shows?”

Thompson says the labor uncertainty has also hampered FSN’s ad-sales efforts. “You’re in limbo. Sponsors want to be involved, so they’re holding money aside. But they’re going to have make plans soon to get the ratings points they need by re-expressing it in the NBA or putting it somewhere else.”

Whether NHL players will be skating somewhere else this season remains to be seen. Many are talking about playing with European clubs or are considering the fledgling World Hockey Association, which hopes to launch a six-team circuit this fall.

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