Name: The NHL on ESPN: What the $2.8 billion deal means for the league, players and viewers
Brand: theathletic.com
SKU: theathletic-com-263
Availability: OnlineOnly

critic

The NHL on ESPN: What the $2.8 billion deal means for the league, players and viewers

preview

Mar 11, 2021Asked to explain the importance of the ’s seven-year, $2.8 billion broadcasting pact with ESPN and Walt Disney Co., one NHL executive put it simply: It’s about the “sports-bar default.”When the pandemic ends, the executive predicted, people will return to sports bars. ESPN will be on the screens in those bars. Hockey will be on ESPN. “That can’t be (overstated) how important it was to get back to ESPN. This was huge for our sport.”The deal, which includes traditional broadcasts and streaming elements and will see ESPN/ABC air four of seven Stanley Cup Finals over the course of the arrangement, will pay the NHL close to $420 million a season, according to multiple sources. The ESPN deal, also known as the A package, will be paired with a B package with a yet-to-be-named network, likely bringing in close to $200 million in additional revenue per season.The deal marks a significant financial increase over the current arrangement with NBC and Disney, which was worth a total of roughly $340 million this season.Wednesday’s news was welcomed by stakeholders across the league.&nbsp;In Columbus, captain summed up the overall feeling.“I mean, it’s the worldwide leader in sports,” Foligno told&nbsp;The Athletic’s Aaron Portzline. “The NHL has been looking to partner up. To find ESPN, with the reach they have, it’s great for growing our game and it makes a lot of sense. It’s important for our league to get on that main stage, to get on there with all of the other sports and have that same notoriety. Everyone goes there for their sports. ESPN is known as that. When you have hockey as part of that, it speaks volumes about the outreach we’re going to have to other fans, a broader base. NBC did a fantastic job and helped grow our game and be a big supporter of us. We appreciate all they’ve done. But to get on with ESPN … it’s where sports is in the States. It’s like TSN or Sportsnet in Canada. It’s where the sports are. I’m thrilled to hear that’s the news.”As for the so-called B package — which will include&nbsp;three of seven Stanley Cup Finals and half of the NHL playoffs offering — NBC is interested in maintaining its partnership with the NHL. Meanwhile, Fox is making a hard push, according to a source.In total, the NHL is poised to net approximately $600 million to $620 million annually from its national TV package. Though that’s a notable increase over the previous deal, it’s not as lucrative as the $750 million that sources said was NHL Commissioner Gary Bettman’s pre-pandemic ambition.Discussions with NHL and media sources Wednesday highlighted several key factors about the deal and what it will mean in the coming years.Revenue is rising, so the salary cap will follow, right? Despite instant speculation on social media that this would be the case, Bettman confirmed in his media availability Wednesday that the cap would remain flat. One NHL source predicted that the flat cap could be in place for up to five seasons if Canadian teams aren’t able to get fans in the building for the start of the 2021-22 season.The collective bargaining agreement that was negotiated and extended last summer included an uncoupling of hockey-related revenue and the salary cap. Escrow was set at a maximum of 20 percent, which the players are paying, plus a 10 percent deferral of salary, which will be paid back in Years 4 through 6 of the deal.Because NHL buildings are mostly empty during the pandemic, hockey-related revenue is likely going to come in at around $2 billion this season, according to multiple sources. In the year before the pandemic, hockey-related revenue was $5 billion.If the $2 billion figure holds, there will likely be an addition to the player’s escrow debt of close to $650 million on top of the escrow debt from 2019-20 season, which is carrying over at $250 million. It’s highly likely that the escrow debt in total for the players will be above $800 million.That escrow debt needs to come out of revenue and be paid back to the league before the cap will start to rise again.Among NHL agents, there seems to be a consensus that it will be at least two years before that escrow debt is paid back. One agent said every NHL team he’s spoken with has planned on each of the next two seasons having a flat salary cap, and some are even thinking about planning for a flat cap in the 2023-24 season.NBC had the right of first discussion with the NHL as part of its current deal. Those discussions happened before the league ended up having deeper negotiations with ESPN and subsequently signed a seven-year pact.NBC still wants to be involved with the NHL. The network said as much Wednesday. Still, the network is at a crossroads in deciding how much it actually wants the NHL package, according to a source. NBC is betting big on the and “Sunday Night Football,” while it’s also heavily invested in soccer. With its sports content moving to USA Network after NBC Sports Network is shuttered, there is a real possibility that NBC steps away from hockey.If NBC doesn’t step away, it’ll have competition from Fox, according to industry observers, who noted that the NHL leaving the rights open to the Stanley Cup Final every other year was a smart negotiating tactic for the league in securing A and B packages.CBS has also reportedly kicked some tires on the deal but is considered more of a dark horse than NBC and Fox.If NBC and the NHL do split, there could be some further fallout for the NHL calendar. NBC was a driving force behind cementing the Winter Classic as a Jan. 1 fixture. ESPN already has college football commitments on Jan. 1, so if a Winter Classic on Jan. 1 is to continue, it would likely have to be spearheaded by the B package partner.Outdoor games, which provide significant sponsorship and ratings value, are unlikely to fall off the schedule, but what they look like and how often they are held could be greatly influenced by whether NBC gets the B package.For ESPN, this deal is focused heavily on the playoffs and streaming. Getting the NHL out-of-market streaming package and 75 exclusive national games on the platform marks the latest effort to bolster the ESPN+ streaming service.&nbsp;Once this deal kicks in, fans will need to subscribe to ESPN+ or Hulu if they want to watch all of their team’s games.For the league, it’s all part of an effort to get NHL hockey in front of a larger audience — moving from just the niche audience that subscribes to NHL.tv (a number that has grown, according to the league, but has never been divulged) to a larger subscriber base that could include more casual hockey fans.Disney also used the announcement to highlight the Disney Bundle, which offers Disney+, ESPN+ and Hulu for $13.99 per month with ads or $19.99 without.The deal doesn’t change any local blackout restrictions on games in local markets on regional sports networks. The deal also moves NHL Network back under the league umbrella, and Bettman said Wednesday that the league is looking to get the network into more cable packages.As a rights partner, ESPN is also expected to feature the NHL more often on its daytime programs and on “SportsCenter.”(Photo: Bruce Bennett / Getty Images)

Mar 11, 2021Asked to explain the importance of the ’s seven-year, $2.8 billion broadcasting pact with ESPN and Walt Disney Co., one NHL executive put it simply: It’s about the “sports-bar default.”When the pandemic ends, the executive predicted, people will return to sports bars. ESPN will be on the screens in those bars. Hockey will be on ESPN. “That can’t be (overstated) how important it was to get back to ESPN. This was huge for our sport.”The deal, which includes traditional broadcasts and streaming elements and will see ESPN/ABC air four of seven Stanley Cup Finals over the course of...

public

Sean Shapiro

Get every sports story that matters. Download The Athletic app: https://linktr.ee/TheAthletic

The NHL on ESPN: What the $2.8 billion deal means for the league, players and viewers

No article scores yet.

CRITIC REVIEWS

PUBLIC REVIEWS