You are the president of a network which has been invited to submit a bid for an NHL TV contract. You have 30 years of viewership statistics available to you
1975 1.18MM viewers per telecast
1980 1.21MM viewers per telecast
1985 1.30MM viewers per telecast
1990 1.41MM viewers per telecast
1995 1.46MM viewers per telecast
2000 1.49MM viewers per telecast
2005 1.54MM viewers per telecast
The asking rate is $50MM per year.
You are able to get commercial time worth $26MM per year
As a division of a publicly traded company, you cannot legally buy the rights at a loss.
How do you convince potential sponsors to buy time to reach $50MM a year?
Best plausible answer will get 10 points when I return to Toronto
2007-10-01 13:17:02 · 11 answers · asked by Like I'm Telling You Who I A 7 in Sports ➔ Hockey
Megalomaniac
These are hockey questions. These are the things that people claim that Bettman has broke, yet no one has offered a plausible solution to the dilemmas.
2007-10-01 14:50:48 · update #1
Jeff P
the $26 MM is similar to the last ESPN offer. The owners wanted $50MM at least
2007-10-01 14:51:59 · update #2
CME
Are you ESPN's president? You cited their exact reasoning........."their job is to televise what people will watch and what the sponsors will pay for, and hockey's viewership history did not justify the NHL's price tag"
2007-10-02 00:51:08 · update #3
Assuming the figure is non-negotiable, the variance would have to be subsidized. Jenni had the right idea, but a national deal would be difficult to offset with suites in individual arenas.
The first thing I'd do is to lock in a multi-year deal (min. 5 years). This would give me cost certainty and a guarantee that my investments have a chance for longer term success.
Next, I'd stagger the deal to average out at $50M with the first year at no more than $35M. This would greatly reduce my initial cost vs revenue gap and provide me 12-24 months to incrementally grow interest and viewership in the product.
Lastly, I'd lock in the remaining difference with NHL ad dollars on my network(s) at a discounted rate. The exposure would be good for the league, good for my ratings and help offset my expenses in years 1 and 2.
For me to enter this agreement, I'd need to believe the following:
* I need to have sports programming to be competitive.
* The other major pro leagues have significant image/PR issues making them less desirable.
* The NHL can benefit from the other leagues' problems.
* The NHL has a potentially strong product and its popularity will most likey grow with proper strategic support.
The risk I take is that the combined efforts to increase exposure do not result in a higher viewership increase than the stated 3% rate of growth.
For my protection against this possibility, I'd write in options on years 4 and/or 5 with language that would secure lower rates should audience numbers not show requisite growth. Conversely, I would concede language that would award the league higher compensation than negotiated if the viewrship comes in above negotiated expectations.
This 'partnership' approach would make the commitment more viable for me and would offer the league a visible platform as WE attempt to rebuild a stronger, profitable exposure engine.
2007-10-01 15:53:34 · answer #1 · answered by zapcity29 7 · 4⤊ 0⤋
You start with an offer of $20 mil and go from there if you are Fox or ESPN you remind the people asking $50 mil that if you do not cover games there is no reason for any of your sports shows (including national radio) to remind people that hockey even exists.
It is not the stations job to try and convince sponsors to pay more.
If they walk away I'd wish them luck in finding a quality outlet for their product. Then, laugh my *** off when they sign on with an owner owned (Ed Snyder's Comcast) cable network knowing that a huge percentage of Americans don't even get that channel.
Lastly, I'd fill the empty time with bowling, poker or the next fad in TV sports that will still do well ratings wise.
On a more serious note the league should worry less about their national product, the NHL is very strong regionally. They should take a close look at who is not doing well in their region and consider movement.
2007-10-02 13:37:50 · answer #2 · answered by sensfantodd 3 · 0⤊ 0⤋
Wow, this one is over my head. Firstly, the increase is viewership means ABSOLUTELY nothing. More TV's-more media- higher populations-there is nowhere to go but upward.
I will ask this as a rebuttal- WHAT led ESPN to the conclusion that hockey was not a good draw compared to some other sports they used as fill-ins during the lock-out? The answer to that would be that there WAS a lock-out, thus allowing ESPN to evaluate these comparison numbers.
IF there was no lock-out, would ESPN still be on board? Almost assuredly. Not at some crazy reduced cost either because they would have never known the difference in viewership.
Therefore, the questions become "Who do you blame for the lock-out?" The players? The owners? Bettman? All? Some more than others?
2007-10-02 12:07:56 · answer #3 · answered by Bob Loblaw 7 · 1⤊ 0⤋
The real answer is not in a national contract but using highly focused niche marketing where you put in pay for view at $2 per game in all the home markets of NHL clubs in the US.
If 250,000 people watch each game, there's 20 mil per city per year. 24 cities = $480 mill. Where's the problem?
To do it the NHL becomes broadcasting partner with (say)TSN in Canada and has them televise games and they receive 40% of the pot plus the right to advertise between periods.
League pockets over a quarter billion and TSN about the same.
The league has to stop trying to deliver air conditioning to all the eskimos and start focussing on delivering a product to a known market. Stop trying to convert people in non-markets into fans and deliver all you can to the markets that exist.
2007-10-01 22:17:45 · answer #4 · answered by PuckDat 7 · 2⤊ 0⤋
Become known as Entertaining Sports Purposely Neglected in cme's world. Let OLN lose the money for a few years until the numbers come in line and the league realizes its better to be in 100 million homes at 10c per that 10 million homes at 25c. As the CEO of the network my job is to make money off popular sports not to lose money by popularizing them.
2007-10-02 01:41:01 · answer #5 · answered by cme 6 · 1⤊ 0⤋
You counter offer $26 million, or offer that if the NHL to find enough advertisers to justify the price tag.
Am I detecting a theme?
2007-10-01 21:08:01 · answer #6 · answered by The Big Box 6 · 2⤊ 0⤋
Offer the sponsers a suite at the arena renewable each season they continue to sponser the team.
2007-10-01 20:31:18 · answer #7 · answered by Anonymous · 1⤊ 0⤋
what asking rate? you mean you pay teams to televise them?
If the ads you can generate are 26mil, you go to a team and say " this is what your product can generate for me. how much do you want out of that?"
gee, the hawks supposedly PAY for radio airtime...
2007-10-01 21:34:05 · answer #8 · answered by Anonymous · 1⤊ 0⤋
Well..... the simplest solution is...... wait for it...... wait...... MORE COMMERCIALS! YAY! rofl, jk, jk, oh man that would suck. I really don't think the sponsors could be convinced in any way, once again very good question.
2007-10-02 01:19:07 · answer #9 · answered by N/A 6 · 1⤊ 0⤋
you get jenni to find a sixth hole.
Jkjk, but Seriously i have no clue what your talking about, just alot of big numbers that look expensive.
2007-10-01 21:24:51 · answer #10 · answered by Anonymous · 2⤊ 0⤋