NHL Commissioner Gary Bettman announced Sept. 15 that the league was locking out the players after it failed to come to a labor agreement with the National Hockey League Players Association. Training camp was set to open Sept. 16, with the puck dropping on the regular season Oct. 13.
Mr. Bettman told the owners of the 30 NHL franchises last week to release their arenas for concert dates and other events for the next 30 days, meaning the season could not start before Oct. 15. But in actuality, executives-from the league to the players to the sponsors-believe the contentious lockout will extend into January, when Mr. Bettman will have to decide whether to cancel the entire season.
The tight timing has led marketers to explore other advertising options. "We've been assuming all year there was going to be a lockout," said the director-sports marketing for a sponsor. "We already shifted dollars to the back end of our other sports outlets to keep our momentum going."
"If you listen to the rhetoric going back and forth, well, you have to protect yourself," said a spokesman for another of the league's corporate sponsors, which will move some of its NHL budget to National Football League contests.
Last year, Nielsen Media Research showed the NHL earned $400 million in ad revenue, up $50 million from the previous season thanks to the addition of three new corporate partners, pushing the total to 20. Marketers pay the NHL between $5 million and $10 million, depending on whether it is a U.S. sponsor, Canadian sponsor or both. The league operates 24 franchises in the U.S. and six in Canada.
U.S. TV deals affected
The National Hockey League did not return phone calls for comment.
The NHL's U.S. TV deals with General Electric Co.'s NBC and Walt Disney's Co.'s ESPN are also affected, though NBC to a far lesser extent. The network was to take over as the broadcast TV carrier this season, but it was only slated to televise seven regular-season games starting in January. Moreover, the two-year deal involved no rights fees, as NHL and the network were to split ad revenue. NBC said it would give the time back to its affiliates and to owned-and-operated stations.
ESPN and the NHL signed a one-year deal for $60 million in rights fees for ESPN2 to carry 40 games on cable on Wednesday and Sunday nights beginning Oct. 13. Last year, Nextel Communications was a presenting sponsor of ESPN's telecasts; the company declined to comment on the lockout. A network spokeswoman said no deals had been struck for this year, adding: "As always, we will work with our customers to suit their needs."
College sports fill gap
ESPN said NHL programming will be filled, in part, by college football and basketball telecasts, and preseason National Basketball Association games.
Though ESPN does have a weekly Sunday night National Football League game, the real beneficiaries could be Viacom's CBS and News Corp.'s Fox. CBS and Fox hold the broadcast rights fees to the NFL, showing as many as a combined 13 games nationally and regionally each Sunday. Neither network said it has seen any spillover from marketers associated with the NHL yet, though one network executive said "it's possible it will happen soon."
Spokesmen from Ford Motor Co. of Canada, and Labatt Brewing Co., both corporate sponsors of the NHL and its coverage on the Canadian Broadcasting Corp., told the Toronto Globe & Mail last week they would up their presence on NFL broadcasts to reach the key male demographics they seek.
But some sponsors aren't so quick to jump. "If you look deeper into those key male demographics, you see that the NHL fan also has deeper pockets," said a spokesman for yet another of the NHL's corporate partners. "Obviously, we're hoping for a quick end to this."
Indeed, a 2003 survey by ESPN and Sports Business Journal showed the NHL had a higher percentage of fans who made $100,000 or more annually than the NFL, NBA, Major League Baseball and Nascar.
The NHL is looking at a mid-January deadline before canceling the entire season. The last time the league imposed a lockout, in 1994-95, a deal was struck on Jan. 11, five days before Mr. Bettman's drop-dead date to call off the season. The NHL resumed and played an abbreviated 48-game regular season.
But this time, it doesn't sound so promising.
"When we ultimately make the deal that has to be made, we will then see whether or not there is time for a season or some semblance of a season," Mr. Bettman said in announcing the lockout last week. "If there is, great. If there isn't, then we'll deal with the next season when it comes along."