NBC, Versus Freeze Out ESPN's NHL Offer

While terms of the new 10-year pact weren’t immediately available, the bidding is believed to have reached nearly three times the value of the current Versus contract ($75 million per year). Under the terms of NBC’s legacy pact with the league, the broadcaster doesn’t part with a penny; instead, the NHL and NBC split advertising revenue.

Last fall, team owners had been looking for full broadcast compensation and a rate hike of at least 50 percent over the Versus rights fee. The new package, which is expected to tally up to approximately $200 million per year for a joint custody arrangement between NBC and cable sibling Versus, demonstrates the monolithic power of the sports marketplace.

Long-term deals are now the norm. Last year, CBS and Turner Sports signed a landmark 14-year, $10.8 billion deal to broadcast the men’s NCAA basketball tournament. A week ago, Fox Sports and the Big 12 conference teamed up on a 13-year, $1.03 billion pact for football and a grab bag of Olympic sporting events—a tremendous commitment for a second-tier partnership.

The deal comes on the heels of a record year for Versus, which averaged 353,000 viewers for regular season NHL coverage this season, up 19 percent from last year.

While NBC-Versus were considered the favorites heading into the negotiations, Fox Sports, Turner Sports, and ESPN also put up a concerted effort to land the pro hockey package. Fox was the first to drop out, while Turner, which may have been looking for an insurance policy against a possible NBA lockout, walked away about a week ago.

ESPN stayed in the fray until the very end as it looked to bring the NHL back into the fold after an eight-year absence. Ultimately, despite what was essentially a matching bid from Bristol, the league opted to stay with the partners that have worked to rebuild the NHL brand after the disastrous 2004-05 shutdown.

It was after that season-scuttling lockout that ESPN put an end to its 21-year run with the NHL in 2005, refusing to match terms offered by Versus precursor OLN. The decision to cut hockey loose was the culmination of weeks of badmouthing by former evp of programming and production Mark Shapiro.

Last November, a network exec characterized Shapiro’s behavior as “a public shitting all over the NHL,” adding that ESPN “probably could have had the rights for $55 million, but Shapiro went out and talked to anybody with a laptop and a pulse”—and the league had had enough.

One media agency exec who handles business for a blue-chip NHL sponsor expressed disappointment that ESPN could not close the new deal, noting that the exposure afforded by ESPN’s 100 million+ subscriber footprint would balance out the inevitable jump in unit pricing.

“Not only would it get hockey back on SportsCenter, but you know ESPN would go all out with their playoff coverage,” the exec said. “When you think about all the shoulder programming and feature packages they would have put together . . . it just feels like a lost opportunity.”

Along with keeping a top-tier sport on NBC/Comcast’s airwaves, the deal is a feather in Dick Ebersol’s cap. Yesterday, the New York Post reported that the chairman of NBCUniversal Sports and Olympics has clashed with Comcast higher-ups over the size of his bid for the 2014 and 2016 Games. NBC vehemently denied that there was any friction between Ebersol and the Comcast suits.

In Comcast’s most recent earnings call, NBCU CEO Steve Burke hinted that he might look to clip Ebersol’s wings, saying that the new-look media giant was “going to be disciplined.” When asked about bolstering NBC’s sports properties, Burke said, “We’re going to concentrate on businesses that have good returns.”

Ebersol and NHL commissioner Gary Bettman are expected to formally announce the deal later this afternoon.