In First Sports Pact Since Comcast Took Over, NBC and Versus Re-Up with Growing NHL
The National Hockey League and the NBC Sports Group will announce this afternoon that NBC and its cable sibling Versus will retain the broadcast rights to the NHL, executives with knowledge of the deal confirmed for Advertising Age.
The multiyear deal is expected to be worth at least $200 million annually, executives said -- a whopping 63% increase from the current $75 million annual rights fee -- and could be as much as $220 million a year. It is the first major sports television rights fee deal since Comcast, the parent company of Versus, acquired NBC.
NHL Commissioner Gary Bettman and NBC Sports Group Chairman Dick Ebersol will discuss the deal in a conference call today.
The renewal is a major coup for the NHL, which just six short years ago was coming out of a devastating lockout that canceled the 2004-05 season, the first time an American professional sports league had to jettison an entire season. ESPN, which had the TV rights at that time, dropped the league, forcing it to accept a $30 million-a-year deal for cable rights with a little-known cable station called the Outdoor Life Network, which later morphed into Versus. A separate deal with NBC for broadcast rights was pegged to advertising sales.
But the NHL has slowly re-crafted its image and reinvented its brand, helped in large part by the success of its now-annual New Year's Day outdoor game, the Winter Classic, which was started in 2008. The 2011 edition between the Pittsburgh Penguins and Washington Capitals was the most-watched regular-season hockey game in the U.S. in 36 years.
The regular season's ratings on Versus have increased 17% over last season. The league is now on pace for its fifth consecutive year of record revenue, projected to total $2.9 billion this season, and sponsorship sales set an all-time record with gross sales increasing 33% -- helped by a record seven-year, $400 million partnership with Molson Coors in Canada and MillerCoors in the U.S. to begin in July.
That put the NHL in an enviable position, with NBC, ESPN, Fox and Turner all lining up as potential suitors. But Fox backed out last week, and Variety reported Monday that Turner also backed out of the bidding after the price skyrocketed toward the $200 million mark. ESPN remained in the running and was nonplussed by the figure, but NBC/Versus had the right to match any bid, and executives said the NHL deal, especially with the league's popularity soaring, was one that NBC wasn't going to let go.
NBC is expected to rebrand Versus as an NBC Sports property before the 2011-12 NHL season begins in October.