Wednesday, October 04, 2006

Welcome to the start of the National Hockey League season

The National Hockey League season begins tonight, which is likely news to anyone living in the United States of America. While the NHL remains king in Canada, the sport remains a niche sport in America, with little if any awareness beyond its regional base. There is little if any good news the NHL has to look forward too, this despite decent leadership from Gary Bettman the leagues commissioner and the NHL front office staff.

The Lords of the Rink have the toughest challenges in the sports industry – trying to create awareness and demand for a product where 80 percent of the franchises are located have little if any interest in the product. Key mistakes Bettman made following the NHL’s year long lockout and terrible optics continue to plague the NHL in its ability to move forward.

The full frontal assault on the NHL’s reputation continued throughout the summer. In mid July The Los Angeles Times announced they would not be sending reporters to road games for either of the two Los Angeles based franchises, the Los Angeles Kings and the Anaheim Ducks. The move was to save money but in reality one of America’s biggest newspapers, in the second biggest market in America sent a message to the NHL – there is little if any interest in your product among our millions of readers.

Gary Bettman telling it as he has too, made it clear Tuesday he isn’t concerned a paper as important as The Los Angeles Times has little if any interest in the product he’s trying to sell.

“Traditional print media is going through an incredibly difficult time. There are budgetary cutbacks across the board. There are newspapers that are cutting back all sports. There are newspapers that are cutting back investigative journalism. They're cutting back their foreign and national coverage. While the columnists and the features will obviously remain important, the game stories become less important in a wired world where people can get their highlights and clips during the game, immediately after the game, so they're not necessarily waiting to read their game stories until the next morning. In fact, the people who wait till the next morning download clips onto their iPods and they watch them while they're going to work, with video, with commentary, the like. We offer that to our fans. We will continue to offer that to our fans. With respect to the demographics of our fans, our fans tend to be extremely tech-savvy. They're availing themselves of this new digital world.”

“Would I like everybody who had traditionally covered us to continue to cover us? Yeah. If this was five or 10 years ago, I would be more concerned about traditional print media game coverage. But this is a newly wired world. We will, and our fans will, adapt accordingly. I think it's really the newspapers that are going to have to spend time focusing on what their businesses are going to look like going forward,” Bettman commented.

In an NHL media conference call Tuesday, Bettman addressed the optics of the NHL’s two Los Angeles based teams, again doing what Bettman does best – avoiding the issue, trying to tell a tale as only Gary Bettman can.

“Well, we actually believe we should have 30 solid franchises, and each franchise should be solid, well-supported in its market. So we don't play favorites. We don't root for markets. We'd like 30 healthy, competitive teams.”

“Ticket sales, if I'm not mistaken, over the summer are up both for the Ducks and the Kings. The attention we're getting is very strong. The fan feedback is very strong. The only place where I've detected a note of cutback is the L.A. Times, but that seems to be consistent with what the Times is going through with respect to budget cuts across the board, not just in hockey, not just in sports, but in other coverage as well.”

“The good news is that fans in terms of game stories have lots of places to get their information on an immediate basis and with video clips. We've been told by the sports editor of the L.A. Times that the other types of coverage, columnists and features will continue. So it's just really the game coverage that seems to be impacted by the L.A. Times. For those who read the L.A. Times and want to know what's happening immediately in the games, we recommend they go to”

Classic Bettman – the man talks out of the side of his mouth on his best days and being cornered into talking about a market as important as Los Angeles, and trying to find how to turn a sow's ear into a silk purse isn’t something Gary Bettman wanted to do Tuesday.

“Absolutely. I'm not even sure why there's a question questioning it, although you're entitled to ask it. It's fair game. We have no concerns about either franchise in L.A. It's a great market. The teams are well-supported. We have terrific ownership of both franchises.”

The serious issues the NHL faces have little to do with the Los Angeles market. Bettman is correct in suggesting the Kings and Ducks are selling tickets, but the perception of America’s second biggest paper (in terms of circulation) deciding it wasn’t in their best interests to cover NHL games is a stinging indictment on the state of the National Hockey League in America.

The NHL heads into their second year with Versus (formerly OLN) as their cable partner. Of all the inane, inept and incompetent decisions Gary Bettman has made during his tenure as NHL commissioner, walking away from ESPN for $65 million, $2.1 million per NHL franchise remains one of the worst decisions ever made by a sports league executive.

Versus reached 65 million homes when they reached their two-year agreement with the NHL last year. One year later, Versus still only reaches 65 million homes. ESPN was interested in continuing their partnership with the NHL, but refused to pay any fees to the NHL. ESPN was interested in a revenue sharing agreement with the NHL along the lines of the relationship the NHL established with NBC after ABC (ESPN’s parent company) walked away from their over-the-air agreement.

The difference between ESPN and Versus is as different as night is to day. ESPN is in nearly 100 million homes. ESPN is home to Monday Night Football. ESPN is home to Major League Baseball, the National Basketball Association, NASCAR, Major League Soccer, the NCAA and countless sports properties. The only sports property not a part of ESPN’s family of networks is the National Hockey League.

ESPN is everywhere, Versus is nowhere. Making the challenge that much greater for Versus, the evolution of the NFL Network. The NFL Network has committed $100 million to promote their product and win the hearts and minds of cable operators. Versus and the NFL Network are fighting for dollars from cable providers. As long as Versus biggest product is the NHL, Versus will be a bit player in a big world. The magnitude of Bettman’s most egregious error as commissioner should be a friable offence.

Time and time again Bettman suggested Versus has a better schedule this year. How will a better schedule serve the National Hockey League goals of greater market awareness if anyone interested in the NHL can’t find the product? Call it what it is – fool’s gold if you believe in the pabulum Bettman is trying to sell.

The good news, actually the great news, the NHL has a salary cap. Gone are the days where 76 percent of league revenues went to player salaries. That was a business plan destined for failure at every possible point. The old NHL was a business bound and determined for economic implosion. Give Gary Bettman credit, his belief that the old NHL economic model wasn’t working led to a collective bargaining agreement that has a reasonable chance to succeed. Bettman made it clear yesterday, these are better for the business of the NHL.

“Most of our teams made money. We haven't done the final accounting, but I probably wouldn't give you the exact breakdown anyway. The teams that lost money lost far less than they did under the old system.”

“We believe that with the better competitive balance, with respect to how good the product is on the ice, the teams that lost money will continue to increase filling their buildings and will move towards breaking even and ultimately even profitability.

“This agreement worked exactly as we had anticipated that it would, and we are very pleased with it. If anybody has any doubt as to the effectiveness of the salary cap, it worked so well, that's why we owe the players money, because we wound up underpaying on the 54%,” Bettman commented.

One issue Bettman didn’t address Tuesday, the embarrassing lawsuit filed by Detroit Red Wing Chris Chelios Monday. In filing the lawsuit, Chelios made it clear he was fed up with Ted Saskin the Executive Director of the NHL Players Association.

“Unfortunately, this lawsuit has become necessary after months of stonewalling by the union,” said Chelios, a 22-year veteran of the NHL. “On behalf of more than 100 NHL players, we continue to seek full disclosure by the NHLPA of the events leading up to Bob Goodenow’s departure and the hijacking of the union by a handful of other players. We have repeatedly requested that Mr. Saskin agree to an investigation by an impartial third party and he has steadfastly refused to do so. We simply want to eliminate fraud within the players’ union and restore democracy as provided by our constitution.”

Chelios launched the lawsuit on Yom Kippur, the Day of Atonement to Jews all over the world. Yom Kippur is a day of observation for anyone Jewish, a day when one’s thoughts turn inward. The optics of a union member filing a lawsuit against a Jewish union leader is questionable on Yom Kippur and in the very least in terribly bad taste.

This isn’t the first time Chris Chelios actions visa-vie the Jewish Community have been questionable. Never one to be taken too seriously, during the year long NHL lockout Chelios told the media, “NHL commissioner Gary Bettman (who is Jewish) should "get the gas" for his treatment of the players”.

The greatest single crime against humanity was Adolph Hitler’s systematic murder by gassing six million European Jews in World War II. A reference by anyone that a Jewish person (Bettman is Jewish) should “get the gas” is indefensible. To file a major lawsuit directed at someone Jewish on a day when that person couldn’t react raises a great many issues relating to that person’s belief system.

While Saskin was unavailable to comment on the Chelios lawsuit Monday, he did let the media know how he felt about Chelios allegations Tuesday.

"The claims issued in the complaint are the same claims that have been made repeatedly over the last 13 months by this tiny group," Ted Saskin told The Canadian Press in an interview Tuesday. "These claims, including the offensive allegations of illegal conduct, are completely without merit as has already been demonstrated in many forums on a number of occasions."

"It serves no useful purpose for this very small group who clearly have no mandate or support from the general membership to continue to bring up matters that have already been addressed in order to satisfy the personal agendas of a few players, agents and lawyers," said Saskin.

"The overwhelming majority of NHLPA members have come together to move forward as an association and this nonsense will not distract us from the work we are doing staying focused on continuing to grow our sport."

The Chelios lawsuit named Dwayne Roloson and Trent Klatt as co-defendants. Klatt is retired and no longer a member of the NHLPA, at least as an active member. The lawsuit “suggests” more than 100 players support the action against Saskin and the NHLPA. None of the 100 players are named and 24 hours after the lawsuit was filed not one player has come forward to support Chelios action.

Giving Chelios the benefit of the doubt that he actually has the support of 100 members of the 770 NHLPA, the 100 would represent less than 15 percent of the NHLPA’s membership. A union leader that has the support of more than 85 percent of his union leadership is a union leader who has the respect of his membership. Chris Chelios’ actions are an embarrassment to the Detroit Red Wings, the National Hockey League, and the NHLPA and do nothing but do damage and harm to the frail reputation of the NHL.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: The Canadian Press