The National Hockey League has secured the final installment of the media rights increase and can thank AT&T’s WarnerMedia for their intervention.
The NHL and WarnerMedia’s Turner Sports have signed a deal that will give the network its second-tier hockey rights for more than $1 billion over seven years. Turner will land three Stanley Cups, one of the NHL conference playoff rounds (ESPN has the first rights) and the Winter Classic as part of the package, Turner Sports announced Tuesday.
With the NHL agreeing to return to ESPN for more than $400 million a year, and Turner now expects to pay $225 million a year, the NHL is increasing its rights fees to more than $625 million, an increase of about $300 million. in agreements with NBCUniversal and, for streaming, Disney.
The NHLs 10-year partnership with NBC Sports now ending after this season.
“I think NBC and NHL have done a lot for each other over the past 16 years,” said sports media rights adviser. Lee Berke. “The challenge for NBC was that ESPN took up more than the majority of Stanley Cups and a huge amount of NHL content. What was left was a smaller package than before for NBC and something that would cost more than their current rights fee.”
And now the NHL and Turner are entering into a partnership that seems odd, but could still work if WarnerMedia brings the sport to its HBO Max streaming service.
In some media circles, the NHL’s move to Turner came as a surprise. Few expected the NHL to leave NBC, which formed a $1.9 billion partnership with the NHL in 2011. NBC helped revive the NHL after a lockout that canceled the 2004-05 season and drew limited interest from other networks.
Behind the scenes, chatter suggested that NBC was only willing to pay just over $100 million a year for the rights. But Turner came in with a cash bazooka and offered his deal. On Monday, word leaked that NBC had pulled out, and the deal was formally announced Tuesday.
Hockey viewership tends to follow that of other sports, primarily the National Football League and National Basketball Association, but the NHL has a devoted fan base. That’s why the new gamble is ESPN and WarnerMedia believes they can entice those fans to sign up for their streaming services using NHL content.
The point is, will Turner raise over $200 million in hockey revenue to help pay for those rights? NBC knows what the hockey broadcast draws annually and was unwilling to pay the raise. And the move could also put Commissioner Gary Bettman’s league at risk.
The NHL is losing a broadcast network and moving more to cable, which is declining. Had it stayed with NBC, the NHL’s Stanley Cup content would have been rotated on two broadcast networks, NBC and ABC, and the Winter Classic would also have remained in the broadcast network’s spotlight.
But by choosing Turner, the NHL gets some cross-promotion with the NBA and college basketball games. And Turner is getting another fall-in-summer sports package that could lead to his Major League Baseball coverage.
The network sees innovation around hockey presentations, and again, it knows NHL fans will follow. Turner plans to include Bleacher Report in its coverage, lure sports betting, and have flexibility in the deal to put NHL games on HBO Max when the service is ready to host live sports.
Octagon media manager Dan Cohen: “Since Turner missed out on the PGA Tour media rights, you knew they needed to add a fourth pillar to their sports portfolio (NBA, MLB, March Madness), and now [WarnerMedia News and Sports Chairman] Jeff Zucker has completed that task. HBO Max, which has been late in the sports streaming space, now has an immediate series of NHL rights that will attract a young, diverse digital-first audience.”
Berke called the increase in the NHL’s rights a “signature moment,” noting that the league charged more fees in Canada than in the U.S.
“If I’m the NHL, I’m very happy,” Berke said. “I more than doubled my rights fee. ESPN promotes the sports year-round on all platforms. I have a new entry with Turner, who has done an amazing job with the NBA and MLB.”
NBC could also have used the NHL content to further build its Peacock streaming service, but again, it would be paying more for less. And the network needs to think about upcoming NASCAR and Premier League deals.
“It’s going to be a very competitive market,” Berke said of the global football league. “And NBC has shown that football fans tend to be younger, tech-savvy, and willing to subscribe to streaming services to get that content.”
It is here that Major League Soccer could benefit from the NHL’s move.
The MLS’s media rights shouldn’t cost too much, as it’s still under construction and needs to prove more in terms of TV audiences. MLS had a minor run on NBC from 2012-2014, and now that the network has extra cash to play with, MLS could be on the radar.
The competition is growing among younger viewers, has a new market in Austin, and with Sacramento on hold, Las Vegas could be next. MLS gets about $90 million a year in ongoing agreements with ESPN and Fox Sports. The deals run through the 2022 season.
Disclosure: NBCUniversal is the parent company of CNBC.