After the devastating impact that Hurricane Sandy had on both
New York and New Jersey, the NBA canceled the game between the Brooklyn Nets
and New York Knicks despite being the first regular season contest at the new
Barclays Center. This is now the second year the NBA has had to cancel at least
one regular season game. Last year’s lockout forced the NBA to play a 66-game
schedule (as supposed to the standard 82-game schedule). The NFL also
considered canceling games last year during its lockout and ended up reducing
its pre-season schedule by two contests.
One thing
that the NFL and NBA had in common was that it was difficult not hear
about each lockout on a frequent basis. Almost everyday
there was “news” about the current state of the negotiations, who was “winning”
the lockout public relations battle, and when the players would return to their
teams. In fact, the extensive coverage has been cited as one
reason that overall attendance, ratings, and interest either matched or
exceeded levels the year before the lockouts occurred in both leagues. In fact,
one could argue that these lockouts actually were beneficial for the leagues as
they brought increased attention to the NFL and NBA at times when audiences are
traditionally focused on other sports.
However,
this argument does not appear to apply to the NHL even though its lockout
shares many similarities with both the NFL and NBA. The issues that separate
the owners and players are very similar the ones that caused the NFL and NBA
lockouts – mainly how do the leagues divide its revenues. Currently, the NHL
players receive 57% of all hockey related revenue and the owners have proposed
that the players receive only 50% of the revenues. Also similar to the NFL and
NBA, attendance, ratings, and revenues have
increased consistently on annual basis over the past five years before the
lockout. In addition to signing a 10-year $2 billion extension NBC Sports, the NHL
had signed new multimillion dollar sponsorship deals with companies like MillerCoors
and Tim Hortons to new lucrative new deals (the MillerCoors deal is still
working its way through the courts after a suit filed by Labatt’s). Similar to
NBA players, many top NHL players have agreed to play in other overseas leagues
while lockout negotiations occur.
Despite its
similarities to the NFL and NBA, the NHL has not received the same coverage and
attention as compared other leagues even though this lockout has already had a
much greater impact on its season. The league has announced it has canceled all
games through the end of November, and it is considering both canceling The
Winter Classic and The NHL All-Star Game. It is increasingly likely
that the entire 2012-13 will be canceled as well.
And, yet,
relatively few people seem to care. Headlines like
“Fan Take: Hard to Care About NHL Lockout This Time Around” showcase one of the
two dominant memes about the work stoppage. The first one is that NHL fans do
not care because NHL lockouts occur so frequently. This is the second lockout
in less than a decade and the fourth since 1992. As Zac Wassink states,
worrying about NHL work stoppage is “like complaining about being hot in summer
and cold in winter: You know what's coming, there's nothing you can do about it.”
With so many teams in the NHL still losing millions of dollars on annual basis
despite significant changes in revenue distributions and player salaries after
the 2004-05 season, Wassink’s analysis makes a lot of sense. There have been so
many NHL lockouts that fewer fans will care when each subsequent one does occur.
Yet, the
other meme is the one that should frighten the NHL. This one suggests it is
likely that people do not care about the lockout because they are no longer
paying attention to the NHL at all. There are so many more options for fans,
media, and sponsors to choose from for their sporting dollar than ever before.
The NHL directly competes with the NFL, NBA, and MLB during various different
times in its season in addition to competition from collegiate and high school sports.
This does not even account for other entertainment options that are competing
for NHL audiences like movies, television, restaurants, museums, etc.
The increase in competition poses a
significant challenge to the NHL because its teams require committed fans that
will to attend games to be successful. A recent Forbes
article highlights the fact that the average NHL teams rely on in-game
dollars for 50% of their annual revenues while the average teams in the NFL,
NBA, or MLB rely on in-game attendance for no more than 33% of its annual
revenue. After the 2004-05 lockout, the league rebounded because the “the fans
came back in droves. During the 2005-06 season 25 of the 30 teams had an increase
in attendance from the 2003-04 season. Moreover, the average cost (tickets,
concessions, parking, etc.) for a family of four rose from $256 in
2003-04, to $283 at
the start of the 2007-08 campaign. The latest figures from Team Marketing Report,
for 2011, show the average cost at $329, a
29% increase since the season before the 2004-05 lockout.”
The NHL is betting that these per
cap dollar trends will occur after the current lockout ends. This may not be
the case as the sports environment is different now than it was in 2004-05. If
the NHL lockout continues then it becomes increasingly unlikely that its teams
with fail to hear the number of cheers echoing through its arenas as occurred
before the lockout. And that it is noise the NHL cannot afford to stifle.
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