At 75, NHL remains on thin ice TV contract, salaries blamed for problems

April 09, 1992|By Jon Morgan | Jon Morgan,Staff Writer

Even if players surprise everyone and end their strike today, the National Hockey League still will have more than its share of problems on and off the ice.

The more likely scenario is that the season will end today, with the playoffs canceled because the players union and owners remain deadlocked.

When the labor strife is finally settled, what does the future hold? The sport seems to have the fundamentals of a winning business: The action on the ice is fast, the teams are established and the sport is widely played, at least in northern regions. And the league's only major competitor, the World Hockey Association, went out of business in the 1970s.

But experts who market and follow sports business say a combination of poor leadership and a failure to innovate and properly market the sport has kept professional hockey from reaching its potential.

"Hockey has been kind of the stepchild to other sports," said John Kaatz, a sports consultant with Coopers & Lybrand in Dallas.

The 22-team league was in the process of celebrating its 75th anniversary season before the strike intruded. It has a new member, the San Jose Sharks, and plans to add two more teams next season and another four by the turn of the century.

Normally these would be good signs for a league, but not necessarily for the NHL. Experts contrast the performance of the league with the National Basketball Association, which was in dire straits a decade ago but has turned itself into one of the great success stories in sports through a combination of intelligent marketing and strong leadership.

"You have some avid fans but what has prevented the league from growing is that in the NHL you have many owners who have been in place a long time, and that is one of the reasons it has been slow to change," said Alan Friedman, editor of Sports Marketing Report, a sports business newsletter.

"It will never be the national pastime, but I really think if the NHL borrowed some of the methods of some of the other leagues it could go higher," Friedman said.

Gary Meagher, executive director of communications for the NHL, admits the league has problems, but rejects the notion that the sport is a failure.

"The 13 million fans we bring out every year certainly don't think so," he said.

During the regular season, attendance at hockey games averages 90 percent of capacity, one of the highest rates of any sport. Championship games draw 96 percent, Meagher said.

But the financial picture is not so bright.

By its own reckoning, slightly more than half of the NHL's 22 teams are losing money. The owners blame player salaries, which averaged $276,000 in the 1990-91 season and $379,000 this season, an increase of 37 percent.

But the failure of the sport to win a reliable television following has been disastrous.

The NHL abandoned ESPN in 1988 in favor of SportsChannel America. The money was better, $17 million per season, but the premium cable channel reaches 45 million fewer households. And last year the NHL re-signed with SportsChannel for one year for $5.5 million, less than the league was making with ESPN.

"Where the league does well is with the fans. Where we haven't come close to reaching our potential is television and that's what separates the men from the boys," said Lew Strudler, vice president of marketing for the Washington Capitals.

Part of that is because the game is not played much in southern climates, leaving a gaping demographic hole for network television. The action may also be hard to follow on TV, Strudler said.

But Robert J. Wussler, a former president of CBS and CBS Sports and an executive with the Turner Broadcasting System, said the NHL "could liven up the sport for television."

Football has altered its format to accommodate television, and hockey could, too, by changing the duration of its periods, using more penalty shots, cutting down on fighting, and other things, Wussler said.

"The sport could have a terrific future," he said.

A lack of TV revenue has made ticket receipts even more important to the league, and the growth in attendance has been unspectacular. Total regular-season attendance this year is expected only to match last year's 12.3 million, despite the addition of the team in San Jose. And that total is below the 12.6 million generated in the peak season of 1989-1990.

Many observers zero in on NHL president John Ziegler, saying he does not have the skill or authority from the owners that other sport commissioners have.

Meagher, with the NHL, said the league is making changes to improve marketing and defended its leadership. The sport has expanded aggressively, drafted a "Vision for the 1990s" battle plan that emphasizes marketing, and is modernizing team logos and uniforms with concession sales in mind.

"Up until a few years ago we were not a marketing-driven league," he said.

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