Tuesday, May 29, 2007

Gary Bettman – calm, cool and collected in the eye of the storm

The National Hockey League opened the Stanley Cup Finals Monday night, with the Anaheim Ducks beating the Ottawa Senators 3-2 in game one of their best of seven series. SBN will spend the next two days focused on where the NHL is with its current and longstanding leader Gary Bettman.

Before the game NHL commissioner Gary Bettman held his semi-annual state of the league (the other major opportunity being at the All-Star Game). Once Bettman opened the media gathering for questions the often criticized Bettman was very much in control of the event, more often than not taking whatever the media could throw at him, never backing down and answering every question. Several of the highlights from Bettman’s opening statement set the table, with Bettman going on the offense acknowledging that the NHL isn’t perfect, but if you choose to believe Bettman is a business in decent shape.

“This was another season of record attendance and record revenues. We had a strong, solid season. The game has been entertaining and exciting. And we continue to move in what I believe is a positive direction.

“Is everything perfect? Is everything exactly where we would like it to be? Of course not. And it never is for any sports league. It never is for any business.

“Here will always be issues and challenges, and we are always trying to improve and to do better. However, our issues and our challenges are but a mere fraction of what they were just a few years ago.

“So we are feeling good about things, and we are excited about the future.

“As I said two years in a row since coming back from the work stoppage, record attendance and record revenues, TV in Canada remains strong. We are a vital and important programming, as evidenced by our new agreement with the CBC extending our relationship for Hockey Night in Canada.

“Television in the U.S., obviously it could be better, and we're working on it. But the media world is changing. And in recognition of that fact we are using new technology in a big way. In the last five months we have signed 15 new agreements with digital partners, and some of those agreements you're familiar with. YouTube, we were the first league, and there have been 12 million streams of highlights since we entered into that relationship.

“Google, there's been 2 million downloads of games. We were the first league with MySpace, the first league with Joost.

“NHL.com, of all the major sports sites, in April had the largest percentage increase in traffic of over 65 percent.

“It's a long-winded way of saying the way that sports interact with media, while traditional television, Nielsen ratings, will always be one measure, it is but one measure of how well we're doing.”

Sports executives set the table at media press conferences. Bettman may have been classic Bettman but he was determined to get his message out to the media and then handle whatever questions they had. By admitting the NHL wasn’t perfect Bettman believed a good defense would make for a great offense – and it did.

When the questions began many members of the media that had traveled to Anaheim to attend the Stanley Cup Finals were from Canada. There has been a great deal of attention in the Canadian media regarding the future of the Nashville Predators, a seemingly uncertain future in the Tennessee city after Canadian Jim Balsillie signed a $220 million letter of intent last week to buy the Predators. And as far as Bettman is concerned it’s far from certain the Predators are going anywhere.

“What's going to happen with Nashville? We have an application by the club for Craig Leipold to sell the Nashville Predators to Jim Balsillie. That is a process that requires us to do some more due diligence, even though we did some in Pittsburgh, we have more to do.

“It will require a three-quarter approval by the Board of Governors in terms of whether or not Mr. Balsillie as an owner and this transaction should be approved.

“The Predators have a lease that goes, I think, for another 14 years, give or take. There is a possibility that the lease could terminate in a year if certain things do or don't happen. But as far as we're concerned right now, Mr. Balsillie's request for approval and the transaction related solely to him buying the Nashville Predators subject to whatever lease is in effect, and if, in fact, at some point the lease is terminated and he seeks to relocate the franchise, that is something that would have to be considered under the league's constitution and bylaws at the time.

“That's why I answered the question the way I did. I'm hoping to dispel the perception. If the attendance mark is satisfied, even if it's not, if the city cures what would then be the default, this team is not going anywhere.

“There is a lease, and sports leagues aren't in the practice of letting teams violate their leases. I believe Mr. Balsillie understands that and it's conceivable that this team will be in Nashville for as long as its lease, however long that may be.”

What was really interesting about what Bettman said – Balsillie needs at least 23 votes to be approved as the owner of the Predators. On the plus side Balsillie’s $220 million purchase price, the largest amount ever paid for an NHL franchise increases the financial valuation of every NHL franchise but before Balsillie’s purchase is going to be approved the Kitchener/Waterloo native would be well advised to mend the fences he broke when he walked away from his letter of intent to purchase the Pittsburgh Penguins.

Bettman made it clear he understands there are issues in Nashville but suggested those problems could be fixed and it was far from certain the Predators were heading to the Frozen North anytime soon.
“That's a terrific question for two reasons. One, the reason the clause that's in question, the one that says if attendance is at a certain level and then there's no cure, Craig actually - Leipold actually put in the lease, because he was concerned as to whether or not this particular non-traditional market could support a team long-term.

“And we will find out the answer to the question, I suppose, over the next year assuming he gives the appropriate notice which I believe he needs to do by June 19th.

“I met with Mr. Balsillie last week. Bill Daly and I both did, and I specifically asked him whether or not he had specific plans or intentions with respect to moving the franchise, and he told me he did not.

“And so I think there's been entirely too much speculation in terms of what comes next.

“What's clear to me from meeting with Mr. Balsillie is that he's passionate about the game, would like to own a franchise and certainly has the resources to do it.

“Beyond that, there have been no promises. There have been no predictions. And I think if anybody believes that this franchise is destined to a particular location, that's more a matter of speculation.

“With respect to a franchise returning to Canada, that's something that intrigues me. Because with the partnership we have with the players and the revenue sharing, that's something, while we haven't studied it, seems to be more likely than it was three, four, five years ago.

“I believe there was actually an editorial in today or yesterday's National Post suggesting if we do return to Canada, we should go back to Winnipeg first because they have a new building and we owe it to them since this is a market that has had a club.

“I'm not opining on whether or not that is an opinion that I agree with, but it is an interesting and intriguing thought.”

What was interesting with so many Canadian media in attendance, when asked, Bettman made it clear he’s very open to the possibilities of the NHL returning to markets it has left in Canada (the NHL left Winnipeg and Quebec City in the mid-90’s).

“When I say it intrigues me, it's something I haven't spent a whole lot of time thinking about or researching. As with intrigue, it's sometimes a fanciful notion. But it's something that if the right circumstances presented themselves and there was an interest in a real and meaningful material way, it's something that we would have to obviously look at seriously. But beyond that, we haven't gone to the next step, whatever that might be.”

Before anyone in Canada gets excited about NHL teams returning to Canada, Bettman reminded the assembled media, like every sports commissioner he’s not a fan of franchises relocating.
“Intrigued is in the sense that I don't like franchise relocation. I think my view on that and my record on that has been clear to everybody in this room for as long as I've been doing this job.

“So, for example, when we had the chance to go back to Minnesota, we did. Because it made sense. The right ownership, the right building situation, the market was strong and vibrant.

“We haven't studied Quebec City or Winnipeg or anywhere else in Canada. But the notion that if it could work to put a franchise back in a place where one was lost feels good, provided we don't wind up in a situation where we've created a prescription for another failing franchise.

“So intrigued is: it's obviously something that I've thought about in terms of trying to make right something that at one point in our history went wrong.

“Now, again, Quebec City and Winnipeg we wound up leaving because there was no new building, there was no prospect of a new building and there wasn't anybody there who wanted to own the teams there at the time.”

As is often the case with Gary Bettman once he believed he was on a roll, he made that one slip on a banana. When reminded there are two NHL franchises in the Los Angeles market and three in the Greater New York area, it makes perfect sense for Southern Ontario currently the home to only one NHL franchise (the Toronto Maple Leafs) to gain a second NHL team (Balsillie’s real goal).

“It's not something that I have given any thought to. I'm not so sure. Well, I'm not advocating moving any clubs, because I don't like to do that. And the world we live in now, I'm not sure what our footprint would be if we were starting from scratch on a clean slate. Having said that, we love all our franchises where they are.

“We haven't given any thought to your question. I, frankly, think - and I live in the New York, New Jersey metropolitan area, I think it's tough for all the clubs to get media attention, particularly when they're having tough years on the ice. There's some real downsides to multiple teams in the market.”

Here’s where Bettman made no sense. There are close to seven million hockey crazy Canadians living in Southern Ontario. Comparing hockey interest in Southern California and the Greater New York area to the most populated region in Canada is nonsensical and insulting to how Canadians feel about hockey. Offering that weak of an answer was silly on Bettman’s part. He would have been better advised to suggest the NHL is open to possibilities that make the best business sense for the NHL.

Of greater significance, Bettman offered that the changing economic landscape of the NHL could be a key to the NHL returning to Canadian markets it left before the current CBA was negotiated that includes a salary cap.

“The combination of a salary cap and revenue sharing. Markets that couldn't afford to compete now can be more competitive. Instead of having teams with payrolls of 20 million and teams with payrolls at 80 million, we now have a $16 million range within which everybody has to be.

“We also have revenue sharing. Some teams can get double-digit millions in revenue sharing in a given year. The combination of those things - we don't believe that - when I say we, Bill Daly and I in particular - that you have to spend to the cap to be competitive.

“There were teams that tried to be competitive at 25 million or 30 million against 80 or 60 or 70 million, and so we don't think if you're anywhere in that ($16-million) range how much you spend is really an issue.

“So the combination of having a range that shouldn't make a competitive difference coupled with revenue sharing, again, we haven't studied it because it isn't before us.

“At the present time we're not looking at expansion. At the present time we're not looking at relocation. So from our standpoint, these are more theoretical questions, as I said before, perhaps even intriguing questions.

“But they seem to be something, depending on the circumstances, we may have to deal with. We are - as I said, we've been getting lots of expressions of interest in expansion. “And as I said, while we're not dealing with expansion as a formal process right now. We're listening to what people have to say.”

One issue Bettman couldn’t and didn’t avoid the debacle two weeks ago when NBC left game five of the Ottawa Senators – Buffalo Sabres eastern conference final when overtime ran into NBC’s Preakness coverage.

“We are what we are. And we think we're pretty darn good. And we like where we are. And this is a business that will do close to $2.4 billion in revenues. We have over 20 million fans six seasons in a row, each year setting an attendance record, come to our regular season. We play to virtually 100 percent of capacity in the playoffs. Our visits to NHL.com are growing dramatically. Nielsen TV ratings is but one metric.

“It doesn't define us. And, by the way, the research also says that we probably have somewhere around 50 million fans. Some avid, some casual.

“What it tells you is people who follow this game who are passionate about the game don't watch it on TV in the United States as much as we'd all like. But you know what, there are probably two or three other sports that do it better than we do, and you know what, there are a bunch of niche sports that don't even come close.

“We don't have to apologize to anybody for what we are. We think we can continue to grow across all media platforms. We believe that we will. But I think it's a little unfair to define us based on traditional television ratings.

“We've had a difficult history on television, which included 20 years of not being on national television. We have been trying to swim upstream against the declining current for the last 15 years.

“Listen, my first Stanley Cup Final in 1993, we were on cable, and it was blacked out in the local markets. So we've come a long way in the last 14 years on television. For people who want to knock us on the basis of that, go ahead. But we're not going to apologize for what we are.

“We like what we are. And we think we're special. And this game and the players associated with it are the best in all of sports and we'll find our own level over time. But this isn't a 60-minute game. This game gets played year after year, generation to generation. We've been around since 1917. We'll be around for hundreds of years going forward. I'm not concerned. In fact, I'm optimistic about the future. But thanks for asking.”

A touch of arrogance from Bettman? Not really, more an acknowledgement that the NHL isn’t perfect but as Bettman put it ‘we like what we are’. And that was further driven home when Bettman suggested the NHL is going to take a good hard long look at how to better handle the challenges presented by television.

“In hindsight there may be lots of things we could do. You have to remember that we made the NBC deal before we made the Versus deal. NBC deal was made before the work stoppage. The Versus deal was made after the work stoppage. And so we were looking to get as much exposure as we could, because we didn't know what our national cable arrangements were going to be.

“We're going to look at everything, starting earlier, switching the East and West to see if there are ways we can do it. The problem is you can't play on the West on Saturday and start early because we won't start a game before noon. Our schedule, particularly in the playoffs - and if you remember, we re-seed after every round. It's not impossible, but it's difficult as we look at building availabilities and the like.

“We're obviously going to have to see if we can do what we did better. Having said that, we took a gamble and three out of the four days we gambled on it it was fine and the fourth one didn't work out.

“But, again, let's not make too big a deal out of this. Overtime was on Versus. If we didn't do this, the entire game would have been on Versus. With respect to people who got to see the game on NBC, they were in a position, perhaps worse, because NBC has broader distribution than Versus, more people got to see the game than might otherwise have been. And that was the overriding consideration.”

For Sports Business News this is Howard Bloom . Wednesday in the second part of our look at the current state of the NHL, we’ll look back at the year that was for the NHL and offer a follow-up to an Insider SBN published earlier this year, one where SBN suggested Gary Bettman should be fired. Now that the current NHL season is coming to an end, has Bettman done enough to keep his job or should he be fired, Wednesday in Sports Business News.

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