NHL Breaks Bank: Spurns ESPN and Signs 2 Billion Dollar Deal with NBC/Versus

The National Hockey League renewed their TV rights deal with NBC/Versus today.

The Globe & Mail reports that the deal is 10 years long and is worth approximately $2 billion. 

Fox, Turner and ESPN were also part of the bidding throughout the week. After Fox and Turner dropped out of the bidding, NBC/Versus approached the NHL with the lucrative deal and the NHL agreed. 

Sports Business Journal reports that the bidding had gone north of $200M per year. This is more than double what Versus is paying right now at $77.5 million. 

So, what does this mean for the NHL?

Obviously, the deal is lucrative and will help the NHL immensely. The huge spike in dollars is a testament to the growth of the game because of stars Alex Ovechkin and Sidney Crosby, a hugely successful Olympics in 2010, the Winter Classic and three consecutive years of great action in the Stanley Cup Playoffs.

Big market teams are playing better now as well. The Capitals, Flyers, Penguins, Kings and Blackhawks are putting out great teams on the ice year after year. 

Many fans were hoping the NHL would go back to ESPN, which is far more available and more popular than Versus. Numerous contingents argue that people don't generally switch to Versus just to see what's on, but they do that for ESPN.

This alone would help generate higher ratings for the NHL and grow the sport. 

Despite this, Versus and NBC have yearly improved their coverage of the NHL. There are still some problems, but they have come a long way since 2005. Fact of the matter is, the league would be buried behind the NFL, MLB and NBA on ESPN. Mark Cuban noted on The Herd several months ago that "ESPN is the network leagues come to die." He noted the lack of growth in the MLS despite being on ESPN.

Just because a league is on ESPN it doesn't mean the sport is going to become popular and ratings are going to grow. ESPN is still going to heavily promote the NFL, for instance, a lot more than the NHL or MLS. 

On the contrary, the NHL is all Versus has. They need to promote it heavily because it's their main draw to the network. More NHL coverage on Versus makes hockey fans even happier and they won't mind tuning into it. 

Also, NBC will rebrand Versus and it will be called the NBC Sports Channel soon. This could help it gain TV rights with other sports in the near future which will undoubtedly help the NHL.

The more sports NBC and their cable channel get, the better competition they are for ESPN. Greater competition with ESPN means the value of the NHL increases. 

Imagine when the MLB's TV rights expire and NBC and their cable channel win the bidding rights. Now, fans will have to tune in to Versus to watch baseball and will be exposed to the NHL like that. More importantly, ESPN will be empty handed and will need another sport to replace their MLB coverage.

So after 10 years when the NHL's new TV rights expire, ESPN will furiously bid on the NHL's TV rights driving up its price. 

This situation is exactly what the NHL is hoping for. It exemplifies the great long term rewards from this deal.

Versus should cater to the diehard fans and not dumb down the game. This generally upsets the core fan base of hockey. By dumbing it down, the network will alienate its core fans for a few new fans.

It's best to keep the core fans and new fans will generally catch on. They aren't dumb.

ESPN has been guilty of dumbing down soccer games when they broadcast them and this infuriates diehard soccer fans. When they recently catered to the interests of the diehard fans during the 2010 World Cup in South Africa, nobody complained about ESPN's coverage.

If Versus and NBC do this more, their coverage will improve even more. 

The NHL should also continue to market its game like they have been doing since the lockout. The Winter Classic and their young stars like Crosby, Ovechkin and Stamkos are gems that the NHL needs to constantly market to grow the sport. 

This deal is nothing but great for the NHL. It's good short term and even better long term.