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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

NBC/VS WIN new NHL TV Deal: $200MM/yr x 10 yrs, Exclusive Rights

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Old
04-19-2011, 09:47 AM
  #26
Joe T Choker
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Originally Posted by Fugu View Post
No, the TV money is shared equally among the 30 NHL teams. I know they have some arrangements in Canada due to the Leafs and Habs giving up a lot of their games to the national spots, etc.

kdb will find the CBA section that discusses if a threshold is surpassed that it goes to revenue transfer program firstly, but I think that's above the $200MM mark here.
Thanks for the correction so that's 6,666,667 per year per team

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04-19-2011, 09:49 AM
  #27
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Originally Posted by Marc the Habs Fan View Post
It won't affect the 2011-12 cap as that is based off revenues from this season.

The effect of this deal should be felt on the 2012-13 cap.
But that section of the CBA seems to say that the escalator might adjust to more than 5% due to a one time increase in revenue for the next year.

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04-19-2011, 09:50 AM
  #28
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Originally Posted by Marc the Habs Fan View Post
It won't affect the 2011-12 cap as that is based off revenues from this season.

The effect of this deal should be felt on the 2012-13 cap.
No, the cap is based on projections for each season (thus the need for escrow). So, if they know they are going to get an extra say $100 million next season, it very much will affect next years cap, I would think at least.

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04-19-2011, 09:55 AM
  #29
seanlinden
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I don't think anyone can view this as anything but a major win for the NHL... getting $200m in guaranteed revenue is huge, and apparently a substantial increase over what they are/were getting this year.

The question is -- does it include more games as part of the package?

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04-19-2011, 09:57 AM
  #30
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Yeah let's see how many games are in the package

Never had a problem with Doc so I'm pleased. Would like all NHL playoff games on TV though instead of some regions getting one game and others getting another. Kind of like what March Madness did this year.

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04-19-2011, 09:58 AM
  #31
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This should also drive franchise values up slightly, shouldn't it?

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04-19-2011, 09:59 AM
  #32
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Cap is based on previous year's revenue + a 5% escalator (if elected).

Escrow is what the NHLPA decided to keep based on their projected revenues.

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04-19-2011, 10:00 AM
  #33
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This sucks. I wanted ESPN to get the NHL back just for Gary Thorne and the theme song.

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04-19-2011, 10:00 AM
  #34
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I won't care if ESPN drops hockey coverage altogether, the limited blurbs of NHL "coverage" are usually crap anyway.



RIP, ESPN hockey.

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04-19-2011, 10:04 AM
  #35
Marc the Habs Fan
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Quote:
Originally Posted by PensFanSince1989 View Post
No, the cap is based on projections for each season (thus the need for escrow). So, if they know they are going to get an extra say $100 million next season, it very much will affect next years cap, I would think at least.
http://en.wikipedia.org/wiki/NHL_salary_cap

The actual amount of the cap varies on a year-to-year basis, and is calculated as a percentage of the League's revenue from the previous season

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04-19-2011, 10:06 AM
  #36
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Quote:
Originally Posted by Fugu View Post
No, the TV money is shared equally among the 30 NHL teams. I know they have some arrangements in Canada due to the Leafs and Habs giving up a lot of their games to the national spots, etc.

kdb will find the CBA section that discusses if a threshold is surpassed that it goes to revenue transfer program firstly, but I think that's above the $200MM mark here.

Quoting myself, it's article 49.5 (a). The threshold is $300MM for all NHL centrally generated revenues (TV, NHL Enterprises). Fifty per cent of the portion above $300M can be used by the NHL to fund 25% of the Cost Redistribution system.

The Canadian and US TV monies would total, roughly, $340-ish MM, plus the Enterprises monies. Don't forget to not double count. If the money is taken off the top to fund revenue transfer, the individual teams don't get that money distributed to them (except the recipients get the revenue transfer money per the prescribed formula).

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Old
04-19-2011, 10:08 AM
  #37
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Originally Posted by topher42 View Post
Cap is based on previous year's revenue + a 5% escalator (if elected).

Escrow is what the NHLPA decided to keep based on their projected revenues.
Yes it is -- but in situations where there is known to be a 1-time increase in revenue beforehand (like a new, substantially larger TV deal), the NHL and NHLPA are supposed to come together to agree on an estimate for the increase in revenue and add it to the cap.

However, because the players are paying so much escrow (mainly as a result of too many teams above the midpoint), I suspect they'll agree to keep it at the 5% escalator.

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04-19-2011, 10:09 AM
  #38
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great so we are now in with vs for the longhaul- i hope comcast puts out some more bucks to get some other licenses so vs can become as easy to find as espn (ie in hotels, on basic cable)
The Pac 10's contract with Fox ends next season and the bidding has begun. NBC Sports is making a very strong push for the contract. It would be a good place to start to grow Versus and they could get some weekend programming for NBC. Versus already carries a few Pac 10 games as they buy overflow games from Fox, so they do have a relationship with the league. Outside of the Pac 10, there's not that much sports to bid on. Most are under contract for several more years.

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04-19-2011, 10:11 AM
  #39
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Originally Posted by htpwn View Post
This should also drive franchise values up slightly, shouldn't it?

Who knows? It's a tough balancing act between costs going up for everyone thanks to linkage to player costs, plus all the redistribution of money for revenue transfer. Using our rough figures, teams would get an additional $6MM-ish (putting aside all the CBA stuff for the moment on what gets used for revenue sharing) each. The value of the franchise will be based on their local performance mostly because the majority of their revenue is locally generated. It's also a function of supply/demand by a limited set of people--- rich owners who want a team in location X.

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Old
04-19-2011, 10:11 AM
  #40
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I will give props to VS for how the coverage has improved since the start. It took a few years but the VS broadcast is actually pretty good now.

And I hate ESPN with a passion. Any network that doesn't give hockey (a real sport) the time of day but shows poker, bowling, golf, tennis, basketball pretty much all day can disappear into the abyss for all I care. However, I do miss national hockey night. Bill Clement, Gary Thorne, the goalie masks with the team logos and that awesome intro music. Brings back such good memories. So I guess in that sense I was kinda pulling for ESPN here. Although they would have probably found a way to screw it up.

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04-19-2011, 10:13 AM
  #41
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Originally Posted by seanlinden View Post
Yes it is -- but in situations where there is known to be a 1-time increase in revenue beforehand (like a new, substantially larger TV deal), the NHL and NHLPA are supposed to come together to agree on an estimate for the increase in revenue and add it to the cap.

However, because the players are paying so much escrow (mainly as a result of too many teams above the midpoint), I suspect they'll agree to keep it at the 5% escalator.
That is the section I referenced above. A higher adjustment, if chosen, would come through the escalator then. So, a >5% escalator is possible for this summer.

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Old
04-19-2011, 10:16 AM
  #42
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Originally Posted by Marc the Habs Fan View Post
http://en.wikipedia.org/wiki/NHL_salary_cap

The actual amount of the cap varies on a year-to-year basis, and is calculated as a percentage of the League's revenue from the previous season
Hmm, I could have sworn they were projections (partially based on the previous years revenues naturally).

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04-19-2011, 10:16 AM
  #43
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The Pac 10's contract with Fox ends next season and the bidding has begun. NBC Sports is making a very strong push for the contract. It would be a good place to start to grow Versus and they could get some weekend programming for NBC. Versus already carries a few Pac 10 games as they buy overflow games from Fox, so they do have a relationship with the league. Outside of the Pac 10, there's not that much sports to bid on. Most are under contract for several more years.
Turner's MLB cable package is up in 2013 and I think there's an NFL package opening up around that time as well. Getting either would be huge.

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04-19-2011, 10:21 AM
  #44
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Originally Posted by Dave is a killer View Post
Thanks for the correction so that's 6,666,667 per year per team
If the deal is $200m per year.

The current versus deal of $77.5m. breaks down to $2.58m per team every year.

That's an increase of $4.08m/ year per team (minus the revenue sharing with the NBC games) , keeping in mind that preliminary reports are that the new deal is worth more than $200m/year

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04-19-2011, 10:25 AM
  #45
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That is the section I referenced above. A higher adjustment, if chosen, would come through the escalator then. So, a >5% escalator is possible for this summer.
Well, the "escalator" refers to the 5% (semi)automatic increase. This would just be a 1-time adjustment.... but for all intents and purposes, yes the cap could be more than 5% higher than this year's league revenues.

That being said, I suspect any increase above 5% would be marginal, if there is anything above 5% at all. Not only do you have players who want to pay less escrow, but there are a couple other factors at play when coming up with the projection of what the new TV contract will do to next year's revenues.

1. How many games are included? If this new package includes more games, then it may not represent that substintial an increase in revenue, as the NHL would be surrendering local rights to give to NBC/VS in some situations.

2. Is this TV contract backloaded at all? It is very possible that the contract has inflation built into it to bring the average up to $200m per season. Next year might only be worth $175m with it increasing by $5m each season.

3. What is the increase in value of the games under this new deal? That is to say, the NHL would need to count up the broadcast revenue from all the games in the package from the last 2 years. Let's say that in 10-11 the package was worth $120m and in 09-10 the same set of games was worth $115m. You would first have to come up with the reasonable expected revenue under the old TV contract for this year, and a 4.4% increase ($120/$115) would lead to projected revenues of $125m under the old TV contract.

In that case, you'd only be looking at a $50m one-time increase in league-wide revenues, which when multiplied by 57% and divided by 30, is an increase of $950k on the cap.

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Old
04-19-2011, 10:28 AM
  #46
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Originally Posted by Hamilton Tigers View Post
If the deal is $200m per year.

The current versus deal of $77.5m. breaks down to $2.58m per team every year.

That's an increase of $4.08m/ year per team (minus the revenue sharing with the NBC games) , keeping in mind that preliminary reports are that the new deal is worth more than $200m/year

There might be some sort of small increase year to year as 200 million 10 years from now is not worth the same as it is now.

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04-19-2011, 10:34 AM
  #47
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$950k on the cap is huge from a Blackhawk perspective.

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04-19-2011, 10:36 AM
  #48
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Turner's MLB cable package is up in 2013 and I think there's an NFL package opening up around that time as well. Getting either would be huge.
As of January, it was reported that ESPN and the NFL were working on an extension until 2020. Obviously, with the lockout, that may have changed some things. But it does sound to me, from that report, that ESPN is opening up their vault, and any other cable net will be left out in the cold unless you are the NFL Network.

I did forget that the MLB one ends in 2013. It doesn't seem like they have been on TBS that long but it's easy to forget since their Sunday afternoon games are barely watched. Outside of the playoffs, nobody is watching the MLB on TBS.

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Old
04-19-2011, 10:37 AM
  #49
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NBC is not going to show weeknight games. No sports has weeknight games other than NFL's opening night.
Howard Cossell's corpse would like a word with you...


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04-19-2011, 10:40 AM
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And 1701 JFK just ate another little piece of the universe.

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