Having already lost more than $400 million in advertising revenue when it became the first U.S. pro sports league to cancel an entire season due to a labor dispute, the NHL lost another $60 million last week when Walt Disney Co.'s ESPN declined to renew its one-year option to carry the league's games.
"Hockey has learned nothing from baseball," said Los Angeles-based Sports Business Group President David Carter, who blames both players and owners for the problems. "When they come back-if they come back-they need to market this sport as if it's a brand new thing."
`IT'S NOT US'
The cable network had televised the league's regular season and playoffs on both ESPN and ESPN2. But when the league locked out its players in September-and then canceled the season in February-ESPN found that its new programming, including college basketball and original content, earned similar ratings to that of NHL games.
The league and its players union still haven't come to an agreement, putting the 2005-06 season in jeopardy as well. "Given the damage that's been done with the prolonged labor strike and the uncertainty moving forward, we really had no choice," said Mark Shapiro, exec VP-programming and production for ESPN.
Mr. Shapiro said a one-year deal would be worth "well below half of $60 million." Disney paid the NHL $120 million a year for five years to have games televised on ESPN and ABC before its contract expired last year. "Somebody will be willing to pay a rights fee, but at this point in time, not us."
He said he would be willing to do a deal similar to the national one the NHL cut with NBC Universal last year-no rights fees, and a split of the ad revenue. The NHL declined, with a spokesman saying the $60 million figure was negotiated with the labor stoppage taken into consideration. "We're not going to devalue our product."
But right now, there is no product and some sponsors are starting to get jumpy. Ford Motor Co. of Canada, a major sponsor of Canadian Broadcasting Corp.'s Hockey Night in Canada telecasts, has said that if a deal isn't cut by mid-June, it will commit its advertising dollars elsewhere.
$400 million Amount of ad revenue lost by the NHL in canceling the season.
$60 million Amount lost by the NHL when ESPN declined to renew its one-year option to carry the league's games.
$120 million The amount Walt Disney Co. paid per year for five years to have games televised on ESPN and ABC before its contract expired last year.