The prospect of a new TV deal next season brings the promise of the NHL playing this season

If there is a motivating factor for both the NHL and its players to get this season underway, it’s money.

The NHL is heading into the final season of a 10-year contract that gave NBC and its cable partners national broadcasting and digital rights in the United States. It amounted to $200 million (U.S.) a year.

There’s a pot of broadcast gold waiting at the expiration of this contract. If the season is played, the NHL could enter into new lucrative deals with a diverse group of broadcasters and/or streamers in time for the 2021-22 season.

“From that perspective alone, there should be real appetite to play. That’s not just the owners, the players, too,” said John Shannon, a former broadcast executive who has worked for CBC, NBC, Rogers and the NHL.

Of course, it remains to be seen just how much the NHL is worth in a bidding war that would include over-the-air networks like NBC, cable networks like ESPN and FOX and such streaming services as DAZN and Amazon Prime.

It could be that a bidding war might not be as fruitful as the league might have hoped as revenue streams dried up in a COVID-ravaged economy. Or perhaps the opposite is true, that content is truly king and broadcasters will pay a ransom for live events.

“It’s such a messed-up situation, you could argue both,” said Tom Mayenknecht, a marketing communications executive and principal at Emblematica Brand Builders. “For the people negotiating, they have been conditioned to see numbers going up and content in more demand.”

Major League Baseball just signed a seven-year extension with Turner Sports — one of that sport’s three broadcast partners — that represented a 65 per cent increase annually over what Turner had paid before. Baseball will get $470 million a season from Turner alone.

It is believed the NHL is hoping for a payday in the range of $750 million a year despite the league’s ratings taking a nosedive during the COVID-delayed summertime Stanley Cup playoffs.

“I believe the pandemic is isolated to an extent, and once we get back to regular structure, with regular games on regular nights, I think we’ll get back to some level of normalcy,” Shannon said. “You negotiate the contract on that basis.”

The pandemic has shown just how dependent the NHL is on ticket sales for profitability. A season played without fans would be a money-losing proposition, with some owners griping that they would be better off not playing at all this year.

Statista.com estimates that NHL teams will lose an average of $1.3 million for every home game played in an empty arena. A further $215,000 is lost per game on food and beverage.

That’s what is behind the latest round of negotiating between the owners and players. The owners are looking for more concessions — to the tune of about $300 million — from the players. The players were shocked at the request, given they had just signed a six-year extension to the collective bargaining agreement over the summer with concessions designed to get the owners through the pandemic.

Things got nasty for a couple of days, but both sides have attempted to go quietly behind the scenes, trying to avoid the spectre of what baseball went through last summer with millionaires and billionaires bickering over exuberant wafts of money while the rest of the world worried about job security and making mortgage payments or rent.

“If it is a standstill, both sides will have to give,” said Richard Powers, national academic director of the Rotman School of Business at the University of Toronto. “I think they will. The players don’t want to relinquish the season. Their careers are short enough. And having the CBA, that’s a plus for the players.

“The owners, they control the game, whether it’s played or not. Whether the owners make money or take a loss, they still have ways to use it. They all have other businesses. They’re all multimillionaires. So a loss can be written off against something else.”

It is in the interest of both sides to get a deal done and get back on the ice and get as quickly as possible to a new U.S. TV deal that will make the league less dependent upon gate revenue, and more profitable. Given the CBA deems the players get half of hockey-related revenue, a new U.S. TV deal will be good for the players, too. If the NHL should cancel this season, it would still owe NBC a season at the relative bargain price of $200 million.

So playing makes more sense than not playing. The CFL may well have regretted its decision to shut down, given the comparative success other leagues have had playing despite COVID outbreaks. The NHL needs to keep pace.

“With the NBA going hard, the NFL going hard, MLB continuing to put product out there, if the NHL decided to skip a year, and have nothing, not even a short season, I think it not only compromises them in terms of protecting those existing contractual revenue streams, but it also won’t strengthen the case for the value of a new TV deal,” Mayenknecht said.

“If you’re out of the public consciousness, your product isn’t relevant. It isn’t as valuable, because essentially people can get by without it. And people will get their content elsewhere. And it’s not going to be hockey content.”