The National Hockey League will launch a digital network later this year on both U.S. cable and satellite systems as part of renewed carriage agreements for its NHL Center Ice out-of-market package.
Both In Demand L.L.C. and DirecTV Inc. will distribute The NHL Channel, a joint venture between the league and Canadian-based telecommunications companies TSN and Insight Sports. While the network, airs 24-hours a day in Canada, where it was launched earlier this year, it will run on a more limited basis in the U.S., said In Demand and DirecTV executives.
The network is the second professional league-dedicated cable channel, following the launch of the National Basketball Association's NBA TV network two years ago.
The channel will offer a myriad of NHL-based fare, including documentaries, player biographies, classic contests and instructional programming. NHL senior vice president of television and media ventures Doug Perlman said the channel will help build the NHL brand while promoting the out-of-market package, which offers about 35 games weekly.
"It will provide more exposure for our players and our fans, which can only enhance the popularity of the game as well as the Center Ice package," Perlman said.
Unlike NBA TV, the NHL network will feature commercials outside of league promos — although its unclear how much time per hour will be available. Perlman said the league will work with both DirecTV and In Demand to attract advertisers.
DirecTV, which inked a five-year distribution deal for Center Ice, will run the NHL Network from 6 a.m. to 6 p.m., company senior vice president of programming acquisitions Michael Thornton said.
The DBS provider will then switch the signal to a live NHL game, before going dark until the next morning. The channel will be available to Center Ice subscribers and customers receiving DirecTV's expanded sports package.
But DirecTV loses its DBS exclusivity under the new deal, although the league has yet to reach a carriage agreement with EchoStar Communications Inc. Those two companies will be combined if EchoStar's pending merger with DirecTV parent Hughes Electronics Corp. passes federal regulatory muster.
IN DEMAND'S GAME PLAN
In Demand, which extends its Center Ice deal through 2006, will offer the NHL Channel full-time, preempting it only for live NHL game telecasts, according to the company's vice president of corporate communications Joe Boyle. In Demand will not increase the package's suggested retail price of $159.
"We believe the channel will be a great opportunity to sell more packages and gain exposure for the sport," Boyle said. "The channel will also benefit operators as a retention tool for the package as well as an added value for digital cable."
The NHL Network comes at an opportune time for the league, which generated double-digit subscriber gains for its NHL Center Ice package in 2002, compared to last season. While not performing as well as other professional sports packages, The Carmel Group estimates that the package will take in about $88 million this year.
Perlman would not reveal buy-rate or revenue figures for the Center Ice — or the package's renewal fee — but he did say the package "continues to be a growth business for us."
Both DirecTV and In Demand confirmed modest gains in both revenue and buy-rate performances for Center Ice. Boyle said In Demand was able to maintain the package's buy-rate from last year while more than doubling its subscriber base to 11 million households.
Perlman believes that the NHL and the NBA channels are at the forefront of a trend and other professional sports leagues will look into launching specialized channels in the digital environment.
"I'm sure with the proliferation of channel capacity out there, a lot of other properties are looking at their own channels," Perlman said. "We'll differentiate ourselves by having quality programming from our sport.
NBA PITCHES JOINT CHANNEL
The NBA TV service may soon inherit live games, if the pro hoops league cannot reach deals with operators for the fledgling All-Sports Network. The service — a joint venture between the NBA and AOL Time Warner is part of the league's new $2.2 billion TV deal with the company — is expected to air as many as 98 regular-season games.
But if the network can't clear 25 million subscribers by fall, the games are expected to default to the NBA TV service, which currently offers live break-ins to various games during the season and classic contests during the summer.
A league spokesman said the network is in "active negotiations" with operators for the launch of ASN and has not discussed putting the games on the digital channel.
In a May 17 report in USA Today, Stern denied that snags have developed for the planned channel. He said the "date of the launch is less important than the ability to launch … We remain optimistic there will be a launch."