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There’s No Business Like NHL Business…
by Alanah McGinley on 10/01/07 at 01:28 PM ET
Comments (13)
It’s definitely not a boring week in the hockey business when the very league we love—despite all the ways it drives us nuts—receives notification of a lawsuit filed against it by one of it’s own member teams, MSG and the New York Rangers.
The lawsuit alleges that the NHL monopolizes control over team promotion. The Rangers appear to be the only team left in the league that hasn’t handed over their website, as everyone else has followed the new standards. And that hasn’t sat well with the NHL:
The Garden says the NHL threatened last week to impose a $100,000 per-day fine, beginning today, until the Cablevision unit gave it “virtually complete control’’ over the Rangers’ Web site.
Unlike every other team in the league, MSG hasn’t taken this lying down, deciding to file a lawsuit in a U.S. District Court last week in order to stop the NHL’s “illegal cartel” from levying the fines and, ultimately, from taking control of the website, etc:
Calling the NHL “an illegal cartel,” MSG feels the league is making “unnecessary and disproportionate incursions’’ into the local broadcasting rights of teams. “The NHL has unreasonably restricted a team’s ability to distribute its own live games through the team’s Web site and/or the Web site of its local television holder,’’ according to the complaint. The Garden wants to bar the NHL from interfering in team-related businesses and isn’t seeking financial damages.
("Illegal cartel”? Gotta love that. I figure that makes the NHL like our own personal Columbian drug cartel: they supply the hockey-crack we’re so hooked on… but no one with any common sense ever trusts their dealer as far as they can throw them...)
Anyway, here’s the thing: MSG may have every right to object to the NHL’s control over its website, and most particularly, over who controls the content of that site. The suggestion that the league has “unreasonably restricted” the team’s ability to distribute live games on their site in particular has got to be a red flag to hockey fans who are desperate to get more access, not less.
But is it that simple? Well, first of all, I haven’t got a clue what the legalese is between a team owner (like MSG) and the league itself. Like any franchise, there are always going to be necessary oversights from head office, keeping consistency in the business at all its “locations” by managing the product and its marketing to some extent.
And to be fair to the league, there are plenty of good reasons why they probably needed to assert their authority over the team websites in particular… some of them were a disaster prior to the change and have been much improved since; moreso than the NHL’s own website, even. Plus the NHL has been making small strides in how they sell themselves in general over the last 2 years.
In today’s BrandWeek, there’s a pretty insightful interview with the NHL’s John Collins (evp, marketing and sales) noting that the league needs to be marketed as a total entity much better, in order to take away the “niche sport” perception of advertisers:
BW: What marketing lessons were learned from the lockout that are now driving NHL growth?
JC: We are a $2.3 billion business, and a lot of that revenue is through the gates. We have 22 million people at our arenas every year. We have 53 million avid fans in North America. But the big insight we came to after the lockout is that our fans say they love hockey, but they don’t behave like they love hockey. They behave like a million fans of the New York Rangers, a million fans of the Chicago Blackhawks. The passion they have is at a local level, but that doesn’t translate to passion at a league level. If you are a fan of the NFL’s New York Giants, you’ll still watch Monday Night Football even if the Giants aren’t playing. You’ll watch the playoffs and Super Bowl even if the Giants don’t make it. But according to the traditional metrics that tell you about the health and vitality of broadcast ratings, we’re not able to scale at the national level of the NFL, MLB or Nascar. So we don’t feel like a $2.3 billion business; we feel like a $300 million business, like a niche sport like Major League Soccer or AVP [professional volleyball].
BW: How does that affect the NHL’s marketing partners?
JC: We have to prove to Pepsi, Anheuser-Busch, Reebok—all big corporate marketers in the U.S. and Canada—that we can get our 53 million fans to activate behind the sport not just at the club level but also at the league level. When we can do that, we can engage Madison Avenue and corporate Canada in terms of the value of the NHL as an entertainment and marketing platform. And they’ll spend more money behind us in marketing and advertising because we’ll demonstrate how we’ll sell more of their products.
I think the basis of the league’s efforts is well-founded, and probably a large part of the reason that the NHL wanted - even needed - to exert more control over the NHL as an overall brand. Whether they can do it or not, remains to be seen. (I’m not sure how possible it is to turn hockey fans into football fans of a type, that’s for sure.) But there is motivation to try—taking the league out of the perception that it is “niche” and increasing its national power.
But MSG has a point, too. They—and all individual teams, probably—know their market, their fans and their business better than the NHL does. If they can deliver the product better to their region without compromising the integrity of the league in general, they should be allowed to exercise more power than they’re being permitted at this time.
The whole situation is a clash between two drastically different business models. Where it goes from here, who knows.
Update 2:03pm ET:
For those that are interested, I just came across this little tidbit about the NFL’s websites, and their own marketing control issues:
It makes perfect sense when you have a penchant for control: the NFL manages its own digital operations, has its own cable network and flexes one of the most powerful licensing arms around. So why not create its own online ad network? The league is exploring just that, an ad net that would sell across all 32 team sites. [...]
It’s a complicated move. The NFL has to navigate between those two shoals, as well as manage conflicts between league and team sponsors. If successful though, the move could bring in significant revenue by adding national advertisers to the team sites. The sites also could make money from ads sold against NFL video that would be offered; teams producing their own video still could sell those ads.
The NFL’s effort to gain some control over its team sites is playing out against the backdrop of an NHL drama over a similar issue…
Filed in: business of hockey | Canucks and Beyond | Permalink
Tags: marketing, nfl, nhl,
Comments
A lot of people would certainly agree with you, Itlan. And I’m not crazy about all the templates being exactly the same, either. I’m just saying that in some cases the new sites have been an improvement. There were certain team websites in the past that didn’t present nearly the content they should have been, and the layout made it impossible to find things as well.
Posted by Alanah McGinley from British Columbia on 10/01/07 at 02:51 PM ET
I was wondering how long it would take for you to pick up on this MSG / Rangers site story.
The other story that is being missed by the majority of blogs is the Chelios lead group that is searching for a new NHLPA executive director.
Could it soon be that the Union is the one on the road to harmony and ‘the Count’ is the one with dissidents in the ranks?
Posted by Terry from West Van on 10/01/07 at 04:49 PM ET
Ok, so the NHL thinks that it needs to promote the league, and not just specific teams. But is forcing a big-market team like the Rangers to promote itself the same as a small-market team really going to help the league?
Posted by K24 from NYC on 10/01/07 at 07:17 PM ET
In that interview he misses a big difference between football fans who watch even though their team is out and hockey fans who drop out once the team(s) they are interested in are eliminated: gambling. Even if you don’t care about the teams playing, if you have money riding on the game, you are going to watch to see if you will be winning or losing your bet(s). Without fantasy football, gambling, and the opportunity for grown men to dress up like Halloween every week, I don’t think football would be nearly as big as it is.
Posted by Baroque from Michigan on 10/01/07 at 08:21 PM ET
Terry - It’s an interesting story, the NHLPA thing. But the whole situation is still so messy, I find I have a hard time knowing what the best (or likely) outcome will be. Sort of a wait-and-see thing for me at the moment.
K24 - Thanks for your comment. It’s a convoluted issue, I know, but I think the problem is not that the NHL wants to promote the league and leave the teams to themselves… Rather, MSG is upset because the NHL wants to promote the league AND the individual teams. MSG and the Rangers want more control over their own self-promotion and the league is limiting what they can do.
Baroque - I have difficulty imagining the average NHL fan being persuaded to behave like the average NFL fan, for sure. However, I think Collins does see the difference you’re talking about.
As far as I understand his comments in the first part of that quote I provided above, he’s saying the same thing you are: that NHL fans follow their teams, not the league. That’s something they want to change.
But that’s a pretty ambitious agenda and I certainly don’t see much being discussed about how they plan to do that.
Posted by Alanah McGinley from British Columbia on 10/01/07 at 08:52 PM ET
Good for the Rangers! Beat back that evil Bettman.
Posted by Ryan from Michigan on 10/01/07 at 09:30 PM ET
It sounds like they plan on making fans of a team into fans of the NHL in general by beating them over the head with highlights and scores from other games. Great, just what I wanted--brainwashing.
I don’t know how well that (making hockey fans fans of the game itself) will work, either. I don’t care about the teams I don’t care about, and I get my hockey news primarily from the internet now anyway. If the link doesn’t deal with one of the teams I like, I don’t click on it--and you can’t make me. And the more ads try to shove any player or team down my throat, the more I dislike him from the overexposure.
I think the media in general have to take some of the blame for hockey feeling like a niche sport, too. Mark Cuban pointed out that none of the TV ratings in Canada count in stats that ad execs look at, and Canadians buy cars, go to home remodeling stores, and buy clothes and wireless services like anyone else watching television. All the yakking about global markets and yet the media are still so provincial in their thinking sometimes.
Posted by Baroque from Michigan on 10/01/07 at 10:19 PM ET
Rags lost the most money of any team in hockey and are owned by James Dolan who is a disgrace and sued for illegal business practice every other day.
The only thing more phoney than Dolan’s claims are his attendance reports.
Get the Rags out of our league, they made the playoffs and Buffalo had better ratings by a two to one margin while Nascar beat out their second round playoff by 38 percent in new york.
Rag tv ratings last season were equal to only 36,000 homes in New York. That’s what Dolan control means.
set up a yankee team store on the floor of msg and contract the Dolan Rags tomorrow.
no one in NYC would even notice.
Posted by Rag contraction on 10/02/07 at 01:55 AM ET
And for Cablevision customers who are used to paying for NHL Center Ice, we have a huge problems on our hands. You see, the Dolan’s not only own MSG and the Rangers, they also own Cablevision, and because of the “disagreement,” as of today, their cable customers cannot get access to NHL CI. And this “small” issue on top of the Isiah lawsuit and MAYBE we get this resolved in 2-3 months! Can anyone spell DIRECT TV?
Posted by John from New York on 10/03/07 at 01:17 PM ET
Gr8 Site, Rich Post
Thanks for such a nice piece
Posted by asset management firms on 04/04/08 at 02:09 AM ET
The MLB did the same thing, they now control all of the sports team websites and have even sued some who had fan sites.
Posted by Pet Dogs on 07/20/08 at 03:25 PM ET
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About Canucks & Beyond
Alanah McGinley has been blogging hockey since 2003, sharing opinions, rants and not-so-deep thoughts with anyone who will listen. In addition to writing Canucks & Beyond and helping manage Kukla’s Korner, Alanah is one of the founders and co-hosts of The Crazy Canucks Podcast, as featured at Canucks.com.
She has contributed pieces to FoxSports.com and the New York Times Slapshot blog, as well as other stray destinations in cyberspace.
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I hate the new websites. Very un-friendly. I think the NHL should have just required certain information be present on the main page of each club, but why have a simple, stupid template that is very boring for every team?
They could have picked a template that looks better than a page from MSN.com.
Posted by Itlan on 10/01/07 at 01:44 PM ET