Despite a murky labor situation that could result in a lockout, the NHL has reached a revenue-sharing deal that will put regular-season games on NBC for the first time in nearly three decades, and reached an agreement to extend its coverage deal with ESPN.
The deal, announced Wednesday, will call for NBC to broadcast
seven regular-season games beginning in January and six playoff
games in regular Saturday afternoon time slots. The network also
will televise Games 3 through 7 of the Stanley Cup finals in prime time.
The two-year agreement may be renewed for an additional two
years at NBC's option. The deal is subject to approval by the league's board.
That setup echoes the current arrangement with ABC, which showed regional telecasts on five regular-season Saturdays and has aired several playoff games. The first two games of this year's Stanley Cup finals will air on ESPN, then ABC will broadcast the remaining games.
The NHL's current agreement with ABC Sports and ESPN -- both owned by Disney -- was to expire after this season. That deal had the networks paying $600 million over five years for TV rights, according to Bloomberg.
The NHL reached an extension on its cable broadcast deal with ESPN on Wednesday, highlighted by ESPN's exclusive coverage of the first two games of the Stanley Cup finals and the All-Star Game.
The deal, which covers the 2004-05 season with ESPN options for the 2005-06 and '06-07 seasons, continues ESPN and ESPN2's exclusive postseason coverage of the conference finals and adds exclusivity for two games from each conference semifinal series.
An industry source familiar with the negotiations told The
Associated Press the first year of the deal would be worth $60
million, with the two optional years being worth $70 million each.
"ESPN has been, is now and will continue to be the definitive cable sports viewing destination, and our partnership with ESPN has been an extremely productive one," NHL commissioner Gary Bettman said in a statement. "We are very pleased that the partnership will continue to be one of growth and we greatly appreciate all of ESPN's efforts and support on our behalf."
For NBC, the deal represents a move back into televising major professional
team sports. In recent years, the network has focused on events
such as the Olympics, Triple Crown horse racing and Notre Dame
football while competitors locked up deals with the NFL, NHL, NBA and Major League
"We're acquiring a major, established sport that is rich in
tradition," said Dick Ebersol, chairman of NBC Sports, "and we're
doing it in a way which fits our strong historical commitment to
financially sound deals which offer significant upside for both parties."
"We think that this structure makes enormous sense for both
sides of the deal," added Ken Schanzer, president of NBC Sports.
Still, the network is not a neophyte when it comes to hockey.
The NHL's first broadcast deal, to air Stanley Cup playoff games,
was with NBC in 1966. The network last broadcast NHL regular-season games 29 years ago.
The last NHL game on NBC was the 1994 All-Star Game, according to Bloomberg, which added that the network hasn't shown any of the four major professional team sports since its contract with the NBA expired in June 2002.
"This is the right deal at the right time with the right parties," Bettman said.
"It's a big win for NBC, which puts the network back on the map as far as the major sports," Sean Badding, a media analyst with market researcher Carmel Group in Monterey, Calif., told Bloomberg on Tuesday. "The NHL isn't the top ticket, but it's up there after football, baseball and basketball."
The deal gives NBC its first major sports league presence since allowing its deals to expire with the NFL (1998), Major League Baseball (2000) and NBA (2002) over the past six years.
Ebersol has said over and over again that, unlike a cable station that has both subscriber fees and advertising, his network's one revenue stream (advertising) makes it harder to compete for major sports in an era of skyrocketing rights fees.
"I believe both sides will do very well, not only in viewing levels, but in profits that both sides will take out of this deal," he said.
Under the extension of the league's cable deal, ESPN2 will televise 40 fully exclusive regular-season games on a consistent Sunday-and-Wednesday schedule.
"For many years, the NHL has been an important programming element for ESPN and we are thrilled to continue the relationship," George Bodenheimer, President ESPN, Inc. and ABC Sports, said in a statement. "The increased exclusivity and addition of the All-Star Game will enhance the already outstanding coverage we provide for our fans and the value we deliver to our affiliates and advertisers."
The NHL is bracing for an offseason that will feature labor
talks to head off a potential lockout that could disrupt next
season after the collective bargaining agreement expires Sept. 15.
Bloomberg pointed out that completing contracts with television partners may be an important strategic goal for the league as negotiations with its players association intensify. During the 1998-99 NBA season, which was shortened by a players lockout, NBC made payments to the league even though games were canceled. The NBA returned the money when the labor dispute was settled.
NBC also has a revenue-sharing deal with the Arena Football
League, renewed Tuesday for two more years, in which the network
paid no rights fee.
Information from The Associated Press, SportsTicker, Bloomberg and ESPN.com business reporter Darren Rovell was used in this report.