By Stu Hackel
If Monday night's Versus telecast of the Rangers-Red Wings game looked and sounded a lot like an NHL on NBC telecast -- with Pierre McGuire "inside the glass" at rinkside along with Mike Emrick and Ed Olczyk in the booth -- that's no coincidence.
When the $30 billion joint venture transaction between Comcast and General Electric was finalized on Jan. 28, Versus programming came under control of the newly reorganized NBC Sports Group. Its head, Dick Ebersol, has made massive changes at Versus. Not only is this likely to improve the quality of its NHL telecasts, it demonstrates to the NHL how good its national cable package will be if the league renews its NBC and Versus deals.
There has been much speculation about where the NHL's U.S. TV rights are headed, but one source who is familiar with the negotiations says talks are continuing on a long-term deal that would keep the league's games on NBC and Versus for anywhere between four and seven years.
While there have been reports that a bidding war is developing over the NHL's rights on both broadcast and cable, there are indications that NBC and Versus will hold onto the packages, although the rights fees will be steeper. Within the TV industry, the thinking is that NBC's retaining the rights to the NHL is crucial, not just to its effort to upgrade Versus, but also for the prestige of NBCUniversal's new corporate structure and the new NBC Sports Group, as the NHL contract is their first deal to be negotiated. The source added that ESPN is unlikely to win any part of the national cable package.
In addition, the source said, Flyers owner Ed Snider "won't let the NHL leave" Versus and NBC. "And I'd be very surprised if he would devalue the brand by letting ESPN have even a secondary national cable package." In addition to his position as a powerful NHL team owner and member of the league's Board of Governors Executive Committee, Snider is American Chairman of Comcast Spectacor.
Another factor to be considered in favor of NBC-Versus is that Jon Litner, who was until 2005 the NHL's chief operating officer and most recently in charge of Comcast's regional sports networks, has just been named the president of Versus. An NHL-friendly environment for the national cable package is certainly a plus.
After spurning the NHL, ESPN has made noises about winning back the NHL's cable package, and a segment of NHL types, fans and sports industry analysts have championed a return by the NHL as a solution to the league's problems in parts of the U.S., despite the fact that ESPN regularly marginalized both the league and the sport, especially after it added the NBA to its programming inventory. Relegated almost entirely to ESPN 2, NHL programming was also trimmed when that channel cut back and then canceled its "NHL 2night" wrap-around show.
Hockey coverage on ESPN's SportsCenter has always been spotty at best and did not improve when The Worldwide Leader held the NHL rights. The league departed from Disney after the 2003-04 season when ESPN said it only wanted to retain the NHL if the rights fees were reduced to no more than $30 million per year. The current NBC and Versus contracts were separately negotiated with different entities: NHL-Versus was a straight rights fee agreement worth around $75 million annually; the NHL-NBC deal was a revenue sharing agreement in which no upfront fee was paid, but the league and network split revenues after production and related costs were subtracted.
As always, the NHL remains a gate-receipts business, the largest chunk of each team's revenue generated by fans who come through the turnstiles. Unlike the other major pro sports, the NHL does not enjoy massive TV revenue. You want massive? The NFL's current and just-expired TV agreements in the U.S. total $20.4 billion. The NBA's current eight-year deals bring in $7.4 billion. MLB's current seven-year deals are worth $3 billion and the NHL gets around half that amount; but unlike the NHL, baseball teams feast on local broadcasting rights fees. (Forbes reported that in 2006, 19 teams sold their local broadcast rights for an average of $13.5 million each.)
While the NHL's new deal won't approach those other numbers, things are changing, and apparently for the better. With NBC and Versus now negotiating as a unit, the NHL can claim its games are worth a good deal more than they were coming out of the 2004-05 lockout. Both NBC and Versus have had some ratings success stories. Versus now averages over 300,000 viewers per game, up from under 200,000 in 2006-07, and its All-Star telecast this year drew its largest audience ever, around 1.5 million, a 33 percent increase. NBC's 2010 Stanley Cup Final ratings were the highest in 13 years and the NHL has created some properties -- the Winter Classic, the Las Vegas-based awards show, for example, while enhancing others such as the All-Star Game -- that potentially make the next contract more valuable, so much so that one NHL owner said he expected the Versus part of the new deal to increase 50 percent.
A steady stream of press releases has trumpeted the NHL's growth as a business and chronicled a steady growth in sponsorships and advertising deals that are worth more that $330 million. Many of those partners also buy commercial time on NHL games and that's very attractive to potential rights holders.
David Shoalts of The Globe and Mail reported last week that the exclusive negotiating period between the NHL and Versus had expired although the NHL-NBC talks were still in a window of exclusivity. However, since NBC and Versus are now the same entity, the Versus part of the deal is still very much alive as NBC is negotiating the new contract as a national broadcast and cable package much as Disney did when the NHL's rights were held by ABC and ESPN.
The current Versus deal was born following the lockout and facilitated by Snider, who sold a majority piece of Spectacor, the Flyers' parent company, to Comcast in 1996. In 2005, Comcast was looking to develop its Outdoor Life Network (OLN) into a full-fledged national cable sports network and the available NHL cable rights were the perfect place to start the rebranding (OLN also flirted with the MLB cable package). The network's name was changed to Versus shortly after it began televising NHL games but, although it has a variety of popular niche programming, it has not exactly flourished or become a competitor to ESPN. Improving the network will be a main task for the new NBC Sports Group.
Versus telecasts have been a hit and miss proposition. The network's tendency to employ some of Comcast's regional hockey announcers on national telecasts didn't serve the production well and has been a main drawback. With the recent changes, some of those announcers are no longer part of the Versus NHL package.
Sam Flood, who is the NBC Sports executive producer, will now oversee the Versus hockey telecasts as well as those on NBC. Flood, who was captain of the Williams College hockey team in the early 1980s, has a strong understanding of the game, something that is reflected by the telecasts he produces. Flood created the "inside the glass" position that has been copied by other hockey broadcasters. In addition to McGuire (who has worked games from rinkside for TSN as well as NBC and now Versus), Brian Engblom will also announce from that vantage point. Engblom will make his debut there tonight on the Versus telecast of the Sabres-Lightning game.
It's likely that Flood's stewardship over U.S. NHL network telecasts will continue for some time.