7 Ways in Which the NHL Is Destroying Its Brand with Lockout
Gary Bettman wants to win the lockout.
There's no doubt that the NHL commissioner is determined to get the best of the players yet again.
Bettman and the NHL owners won that battle in 2004-05 and it cost the NHL the entire season. It seems the NHL is on a path towards a similar event in 2012-13.
Bettman may very well win the battle and force the players to capitulate at one point or another. But the commissioner of the NHL is also sacrificing many aspects of the rest of the league's business while the lockout is in effect.
The NHL's brand, which has grown dramatically since the last lockout, is getting damaged. We're not saying that Bettman and the owners are not considering these aspects as the lockout endures, but perhaps the league should pay more attention to the impact of the lockout on its business.
Lack of Dependability
The NHL is earning a reputation as the lockout league.
In 1994-95, a lockout cost the league nearly half of its regular season as each team played just 48 games. In 2004-05, the lockout lasted a full season.
Eight years later, another lockout has already cost the league a chunk of the season and threatens to wipe away much more shortly.
The NHL normally plays its preseason in September, conducts its regular season from October through early April and has its postseason from April through June.
It's mid-November and there is no NHL action.
The league is not dependable.
Fans can't depend on it, business partners can't depend on it and players can't depend on it.
With each passing day of the lockout, more damage is done to the league's reputation as a dependable entity.
Angering Paying Customers
Let's go over the hierarchy of professional sports in the United States once again (source: sportsbusinessdaily.com).
The NFL is king, based on its huge ratings and mind-numbing television contracts that assure league members a profit before the first game is played, no matter how many fans attend games.
Major League Baseball is next. While MLB does not command the national TV money that the NFL does, local TV and attendance continues to make the sport lucrative.
The NBA commands national TV money, local TV money and excellent attendance.
The NHL is run largely on the backs of the fans who pay for tickets to each game. Local television money can be decent. Until very recently, national TV money was negligible.
However, despite the recent NBC television deal, if fans don't pay big money for tickets, the sport will suffer.
The lockout is angering fans. Bettman and the NHL owners assume they will return when the lockout ends.
If that assumption is wrong, the league will be in desperate trouble.
No Word of Mouth
When there's no hockey, there's nobody talking about hockey.
Whether it's conversation with neighbors, friends or co-workers, you just might be talking about that incredible move by Jonathan Toews from last night's game that gave the Blackhawks the win in overtime over the St. Louis Blues or the incredible save by Jonathan Quick that allowed the Los Angeles Kings to hold on to a victory over the Vancouver Canucks.
Sports talk radio does not often pay great attention to the NHL. During the lockout, the league is being ignored.
When the sport is not being talked about, does it really exist?
When word of mouth is diminished, the brand is diminished.
Pushing Players Away
The NHL has locked players out and that means players are not collecting NHL paychecks.
That does not mean they aren't getting paid to play.
More than 130 players are competing in professional leagues in Europe. The highest-quality league is the Kontinental Hockey League (KHL).
While the European leagues don't pay as much as the NHL pays, the players still make excellent money.
There's no guarantee all players will return to the NHL once the lockout ends.
The NHL may figure it's putting financial pressure on players by locking them out, but it may have overestimated the lockout's impact on a large percentage of its players who have found work in European leagues.
Not Performing for National Television Partners
The NHL is proud of its partnership with NBC.
The league and the network signed a 10-year deal in 2011. In addition to weekly game broadcasts on the NBC Network during the regular season, the NBC Sports Network (formerly Versus) broadcasts multiple games each week during the regular season and playoffs.
With the league locking out its players, there are no games.
That's not good for NBC, which is committed to paying the NHL $2 billion over the length of the contract (source: Marketwatch.com).
While NBC Sports Group chairman Jon Miller has not issued a public comment, the NHL is not performing for his network. That cannot be a good thing.
If Miller or one of his NBC representatives were to criticize the NHL and put public pressure on the league, it might have an impact on how long the lockout will last.
Paying Customers Developing New Habits
NHL fans love their sport.
They are willing to travel great distances to attend games, and pay big money for the privilege.
Since that privilege is no longer an option, fans have to spend their money somewhere else.
They may choose NBA basketball, college basketball, college hockey or high school sports.
Spending money becomes a habit. If you are used to spending money on the NHL, you will likely continue.
If you lose that option and develop a new habit of spending money on basketball, you may very well continue that practice.
The NHL is gambling that you will come back when the lockout is over, but there are no guarantees.
Inviting Entrepreneurs to Start a New League
The NHL may think the lockout is part of business as usual.
Some wily entrepreneur may view the lockout as a business opportunity.
In the early 1970s, a league called the World Hockey Association was formed. It competed with the NHL through the rest of that decade.
The NHL has had no competition since the WHA closed up shop in 1979.
The lockout may plant the seed of an idea in the mind of a courageous businessman who will decide to jump into the fray to start a new major league.
That would do considerable damage to the NHL brand.