NHL Can Grow - Sean Kaye

The NHL needs to wake up and realise its growth market – Canada and the Internet!

I think sometimes in our own self-depricating way, most Canadians underestimate just how massive Toronto really is. The GTA is the fourth largest urban centre in North America behind New York, Los Angeles and just behind Chicago. The GTHA (Great Toronto/Hamilton Area), otherwise called the Golden Horseshoe has over 8m people. Expand that out to the Quebec City-Windsor Corridor and toss in the Ottawa Valley and you’re talking about 18.5m people in an area where everything is less than a two hour flight away. Oh, that’s just on the Canadian side of the border too.

Then there is some reality. Winnipeg with about 700,000 people is small by any standard and probably couldn’t support a hockey team. That said, Raleigh, North Carolina is smaller with about 400,000 people, however the Raleigh-Durham area has over 1m. I think Winnipeg is on the bubble, I’d say 700,000 true hockey fans are a better market than 1m college basketball fans for a professional hockey team – let’s face it, the Tar Heels rule that area.

Then there are people suggesting Saskatoon (hello Ice Edge idiots). The place has 250,000 people. To give you some perspective, the GTHL (Greater Toronto Hockey League) has 40,000 registered players under the age of 21. Its just too small – same with Halifax.

As part of our look on reality, the other fact remains that the NHL is too big. Phoenix can’t support a team in Glendale with 12.1m people in the greater Phoenix area. Tampa Bay is a debacle. Atlanta is no better. Everyone remember the fun that was had with Nashville being sold to a fraudster named “Boots”. And on and on it goes…

The next piece of the puzzle is that the number of players coming from Europe is diminishing. The number of Russians playing in the NHL has declined remarkably, the Slovaks and Czechs aren’t producing first rounders anymore. Many people are citing the impact of the KHL, but that’s nonsense. Just look at the last Olympics – the Czechs were paper thin, the Slovaks were OLD, the Russians lacked depth and were ridiculously one dimensional and even the Swedes didn’t seem up to their standard. All up, I think what we’re seeing is a talent pool that’s dying a slow death over there.

I do like what’s happening in the growth of the game in the US – they have plenty of good young talent coming through. And Canada just continues to be a factory, like Brazil in football (soccer) and New Zealand in rugby.

So why not shrink back to a 28 team league – get rid of 50 marginal players and two bad markets. At the same time shuffle the deck chairs and get into some good locations like Toronto, Hamilton, Quebec City and dare I say it, Hartford. Here’s an interesting statistic for you – when Hartford moved to Carolina, they had more season ticket holders than one third of the current NHL teams! That team moved because Peter Karamanos couldn’t get a free arena from the state of Connecticut. Overall, the NHL game would be much better off getting back into some hockey markets instead of looking at loser situations like Kansas City and Las Vegas.

But what about the golden goose, US Television? Its a myth – the NHL has never had nor will it ever have a massive US TV deal. It does have a MASSIVE TV Deal in Canada. Why not play to your strengths and expand your core market out to 11 teams of 28? The NHL is currently in some kind of crazy revenue sharing deal with NBC where the NHL has to do the advertising itself. What a lame setup that is? Don’t they run a hockey league? It is the height of hubris to think you can run an ad agency on the side and get good value. Then there is Versus – need I say more? This partnership is worthless.

I think the NHL needs to look to the future. US Television networks are going the way of the music business and newspapers – the internet is going to kill them. Why not follow the lead of the Indian Premier League in Cricket and do a deal with Google/YouTube? Companies like Google, Microsoft, AOL and Yahoo all need content and give you a global distribution platform. Build apps like MLB is doing where every pitch can be seen on an iPad. Charge content subscription packages like Gamecentre which is an awesome service.

Its a no brainer decision really and I’d be surprised in they don’t do it. Hockey is an attendance driven sport. TV Revenue is not the main revenue source, so it makes sense to put teams in the best drawing markets. Right now, the NHL is effectively giving away its US national TV rights – so why not negotiate from a position of strength? Make the TV companies compete with the online companies. Put it out there, offer global internet distribution rights OR US national broadcast rights. If companies like NBC or whomever REALLY want the Winter Classic, great, then stump up with money or someone like Google or Microsoft or whomever can certainly chip a hundred million a year in for the right to carry the NHL exclusively everywhere outside of Canada. Companies like Microsoft and Google are carrying $50b plus of cash on their balance sheets and they need content. Not only that, they have the innovation capability to make the game the darling of the internet. Be first, don’t be last!