It’s the constant question asked by NHL fans, and one that is always looked at by members of the league’s marketing team – how do we grow the game? How do we make it more popular? How do we make more people watch hockey?
Unfortunately, the way the NHL has gone about increasing revenue is to take the fans they already have, and squeeze them for all they’re worth. And though that might work for a few years, people eventually run out of spendable income – and prices eventually get too high, as they are right now.
The way that the other three major sports leagues grow their game and increase revenue is through TV. The NFL’s television contract grosses almost as much as the NHL’s annual revenue, while MLB and NBA are still miles ahead of the NHL. Yet, the NHL has been hedging their bets on TV revenue since the early 1990s, when Commissioner Bettman, at the request of the owners, found the best TV deals he could get his hands on, and continued to increase the league’s footprint.
The issue with that is, it’s difficult to maximize revenue through TV when your sport is the weakest of four sports, and lagging behind even soccer and NASCAR. Especially when your sport is stereotypically an upper-class sport. Hockey is the most expensive sport to play, has the most expensive average ticket price of any sport, and charges ridiculous prices to watch their games: $171 for NHL Center Ice in 2011-12 and $169 for NHL Gamecenter in the same year. On most TV packages, the MLB Network, NFL Network, and often NBA TV are all included at no extra charge. And the national TV channel for the NHL, NBC Sports Network, only appears in a fraction of USA households and only through higher-priced TV packages. How will a non-fan stumble upon our fresh, fun game? If the NHL charges an extra $171 just to watch their games or shows their games on channels very few have, there is no potential to grow the game – only to increase current fans’ spending.
NHL fans have the highest mean income of any sport. Statistically, they are younger, more tech-savvy, and are much more well off than fans and customers of other sports. That bodes well for the NHL in terms of potential revenue, but it skews their numbers when they bring in $3.2 billion of revenue. So let’s say the NHL is getting an average of $250 each from 12.8 million fans. That means fans are spending a lot of money each year, but the NHL is missing out on hundreds of millions of potential others. Fans that spend a lot of money each year is great, but ask any business – you cannot rely on a few large customers, you need to diversify with numerous small customers, all of which have the potential to one day be large customers.
The solution to this is to create a bigger web presence from the league. The NHL’s $100 million annually from NBC creates just 3% of their annual revenue, and is basically irrelevant, relative to the rest of the league’s income. If the league makes NHL Gamecenter and NHL Network completely free for customers, and supports that expense through sponsorships and advertisements, they would not only be the first professional sports league to air all of their games for free online, but they would expose their game to millions of new fans flipping through their TV or surfing the web. In the short term, it would sacrifice a lot of TV revenue, but in the long run, it would create millions of new fans, each of them bringing hundreds of dollars of potential revenue per season.
Washington Capitals owner Ted Leonsis has always said, “Strive to be loved or needed.” It is known that the NHL is not needed, as seen by their three lockouts in 17 years. The only other solution is to be loved. And the best way to be loved is to make yourself available to everyone interested, and everyone who might eventually be interested.
Alan Bass, a former writer for The Hockey News and THN.com, is the author of "The Great Expansion: The Ultimate Risk That Changed The NHL Forever." You can contact him at [email protected], or on Twitter at @NHL_AlanBass.
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