NHL: The Sports World’s Comeback Kid


May 21, 2009 | Fox Business

Matt Egan
FOXBusiness

Relegated to relative obscurity earlier this decade, the National Hockey League appears to be in the midst of a renaissance this spring, underscored by double-digit growth in playoff TV ratings and a noticeable buzz emanating throughout the sports world.

Kick-started by an economic overhaul during the painful 2004-05 lockout, the resurgence combined to market the somewhat tribal sport for the national stage — with the fortunate arrival of mesmerizing talent on the ice.

“Some of this is beginning to come together and show up on the national stage in a way that hockey hasn’t shown up since the Rangers won in 1994,” said John Collins, chief operating officer of the NHL.

To be sure, the NHL remains well behind the other three North American sports leagues in many measures and faces significant hurdles from the economic slowdown, highlighted by this month’s bankruptcy filing by the Phoenix Coyotes. But it also remains in a far better place than just a few years ago.

“They’re not running on all cylinders, but the car seems to be in good shape and on a long stretch of road ahead that gives the league reason to be optimistic,” said Paul Swangard, a sports marketing professor at the University of Oregon.

Measuring Success

The NHL can be optimistic thanks to setting a fourth-straight attendance record this season, up 1.1% from a year ago. Eight franchises sold out every single home game.

At the same time, the league appears to be proving skeptics wrong who said it couldn’t live without being televised on Disney’s (DIS: 24.26, 0.29, 1.21%) ESPN. After the lockout, the NHL signed a multiyear deal with Comcast’s (CMCSA: 13.77, -0.4, -2.82%) Versus network, which was previously home only to outdoor sports like hunting and fishing.

“I think they are better being the anchor of a network than being an after-thought of another network,” said Marshall Glickman, a former NBA exec and CEO of G2 Strategic.

According to the NHL, viewership of regular season games on Versus was up 23% in 2009 and up 55% among men 18-34. The league’s playoff ratings on Versus are up 35% through the first two rounds.

“The temperament in those numbers is they are fairly small to begin with,” said Swangard, pointing to the NBA’s higher ratings. “The challenge the NHL faces is that it has always been lobbed into the big four major American sports leagues.”

Parlaying Talent into National Buzz

While harder to measure, it appears the league has successfully generated more buzz in recent years. Unlike during the years after the lockout, it’s no longer uncommon to see the NHL leading national sports shows, including ESPN’s SportsCenter and Pardon the Interruption.

“I live in central Oregon. I’m telling you, people are talking about hockey. There is more buzz around hockey than there has been,” said Glickman.

Much of the attention is thanks to this year’s dream playoff matchup pitting the sport’s two biggest stars against one another.

Pittsburgh’s Sidney Crosby, said to be the next coming of Wayne Gretzky, and Washington’s Alexander Ovechkin, arguably the league’s more exciting player, squared off in a gripping series that went seven games and captured national headlines (and not just in Canada).

The final game of the series made Versus the No.1 rated cable network among men 18-34 and 18-49. Much of that interest appeared to hold this week as Pittsburgh’s matchup with Carolina drew 112% more viewers than the same game last year.

At the same time, the NHL has benefited from playoff berths for many of its Original Six franchises, which live in some of the nation’s biggest media markets like New York and Boston.

“You’re starting to see fans in large markets start to get behind their teams. That starts a ripple effect across the country,” said Scott Minto, director of San Diego State University’s sports business MBA program..

Laying the Groundwork

The foundation for this NHL renaissance was laid when the league revamped its business model during the lockout that erased a whole season and alienated some fans in the process. But what emerged was a more sustainable model that relies less on TV ratings and features a fluctuating salary cap.

“It’s not a perfect deal but they brought a sense of sanity to the salary structure,” said Glickman.

In an effort to improve its product, the NHL introduced several rule changes after the lockout aimed at making the game more exciting, including implementing shoot-outs to eliminate ties.

“The credit starts with the league. But the resurgence didn’t happen until you had these big-time stars,” said Minto. “Without them, all of the rule changes in the world don’t make a great product.”

In the years since, the NHL has strived to build its brand on a national scale by doubling down on digital platforms that quench fans’ desire for highlights and information. Recently-revamped NHL.com was ranked No. 7 in Fast Company’s Most Innovative Companies in Sports.

“We started to think of our relationship with the fan less of a sports league and more as a direct marketer,” said Collins.

Those efforts were epitomized by the Winter Classic, an outdoor matchup played on New Year’s Day the past two years in front of a national audience. This year’s matchup drew 5.6 million viewers on General Electric’s (GE: 13.51, 0.3101, 2.35%) NBC and conveniently featured Chicago and Detroit, a prelude to this year’s Western Conference final.

“We’re getting hockey fans to follow the sport with a deeper level of avidity and act more like hockey fans and less like fans of the local team,” said Collins.

Is Expansion Holding the NHL Back?

But regional issues continue to haunt the league, as some say the NHL overextended itself by expanding to non-traditional markets like Tampa Bay, Nashville and Atlanta. The league must now decide whether to relocate the teams, push out owners or allow teams to disappear altogether.

“Some of these franchises should probably be axed and put back into Canada where the fans would support them,” said Ross Bernstein, a best-selling sports author.

That’s just what Research in Motion (RIMM: 78.64, -1.66, -2.07%) CEO Jim Balsillie is trying to do by acquiring the struggling Phoenix franchise and moving it to Ontario.

“We don’t run out on cities,” NHL Commissioner Gary Bettman said in Manhattan earlier this month when asked about the situation. He pointed to success in turning around previously-troubled franchises in Pittsburgh and Ottawa.

Given these challenges, will the NHL ever overtake the NBA as the No. 3 sports league?

“I don’t think there’s any one spark plug that will move hockey from being the fourth sport to the third sport. And I don’ think that’s their objective. I think it’s to continue to nurture young hockey fans so their audience grows in a measured way,” said Glickman.