7 Reasons to Cheer the NHL’s Return

by Kyle Woodley | January 18, 2013 8:30 am

This Saturday, the National Hockey League will take months of pushing and shoving around the bargaining table and put it back on the ice where it belongs.

About damn time.

While the NHL Players’ Association and the league’s owners battled over a giant pile of money, fans, workers and sponsors watched as 40% of the season’s games evaporated into thin air … and millions of dollars along with it. A 10-year deal struck last week finally put an end to it, though, and now we’ll watch as the NHL tries to cram a 48-game schedule into 99 days[1].

Jaded as we all should be, anyone with a previous interest in the league — including a number of publicly traded companies hurt by the lockout[2] — has to be glad at least part of the season was salvaged. So who’s happy that hockey has returned?

  1. Comcast: Boy, did Comcast (NASDAQ:CMCSA[3]) get hosed on this one. In spring 2012, Comcast signed a 10-year, $1.8 billion deal for the NHL’s TV rights, including the Winter Classic. $180 million was going to the NHL no matter what, though there was a clause that would tack an extra year to the end of the deal had the 2012-13 season been wiped out entirely. It wasn’t, so no free lunch, and it lost the Classic … but hockey’s return at least means NBC Sports Network and Comcast’s regional stations can ditch some reruns for more live coverage.
  2. Most everyone else in the broadcasting business: DirecTV (NASDAQ:DTV[4]), Dish Network (NASDAQ:DISH[5]), Time Warner (NYSE:TWX[6]), Verizon (NYSE:VZ[7]), Cablevision (NYSE:CVC[8]) … all get at least a little play from Center Ice, the NHL’s season-long game package. Also, Madison Square Garden (NASDAQ:MSG[9]) can breathe a little easier — it not only owns the TV rights to New York Rangers games, but also the team itself and the namesake venue.
  3. Sponsors: Alyssa Oursler pointed out[10] that Molson Coors (NYSE:TAP[11]) and Adidas (PINK:ADDYY[12]) were both left in the lurch. Adidas’ Reebok line outfits the NHL’s players, so now that the season’s back on, fans have a reason to buy them again. (It helps retailers, too, though it has much more impact for smaller, independent shops[13].) Meanwhile, Coors gains back arena sales, marketing reach and — to bluntly paraphrase CEO Peter Wilburn[14] — people just drinking ‘cause they’re watching hockey. That’s especially important because, unlike big multinational brewers like Anheuser-Busch InBev (NYSE:BUD[15]), Molson Coors is heavily dependent on North America, where it sells about 85% of its volumes.
  4. Fans: I’d quip, “But there’ll be less of them,” but that wouldn’t be giving hockey fans the proper credit for their loyalty. How much do people love their hockey? Despite the lockout, Electronic Arts (NASDAQ:EA[16]) reported record number of sales for NHL 13[17], this season’s franchise edition. Makes sense. After all, if you can’t watch the Blue Jackets gun for another lottery pick, getting them to actually succeed on your Xbox 360 is the next best thing.
  5. Local businesses: For every city with a hockey team, there’s a set of hotels, restaurants, bars and retailers that depend on those 41 home games every year. According to Fox Business[18], Select Greater Philadelphia’s said Philly loses $1 million in revenue for each home game it loses. VisitPittsburgh told the Post-Gazette[19] that the city loses “$1.2 million per game in direct spending.” McFadden’s — a bar in Glendale, Ariz., where the Phoenix Coyotes play — loses between $18,000 and $25,000 per game missed[20].
  6. The NHL: According to Commissioner Gary Bettman, “The business is probably losing between $18 million and $20 million a day and the players are losing between $8 million and $10 million a day.” So … it’s a good assumption the league and players are happy not to be losing millions of dollars every day anymore.
  7. The NHL we never talk about: Well … happier, yes. But happy? No. The league’s front-office employees took a 20% pay cut[21] at the start of the lockout. Many other full-time staffers at the team level either had pay reduced or lost their jobs outright[22]. Part-timers — mostly those who work the arenas on game days — lost out on every game that was canceled. The good news is that a partial season should prevent more full-time layoffs and gives part-timers work for the remaining 48 games. But make no mistake: The “little people” who make the league hum got screwed.

Kyle Woodley[23] is the Deputy Managing Editor of InvestorPlace.com[24] and repeatedly has to convince casual NHL fans in D.C. that the Columbus Blue Jackets are an actual franchise. They are[25], they’re just terrible. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @IPKyleWoodley[26].

Endnotes:
  1. tries to cram a 48-game schedule into 99 days: http://www.usatoday.com/story/sports/nhl/2013/01/12/nhl-schedule-48-games/1829661/
  2. number of publicly traded companies hurt by the lockout: http://investorplace.com/2012/11/5-stocks-wishing-for-a-hockey-season/
  3. CMCSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=CMCSA
  4. DTV: http://studio-5.financialcontent.com/investplace/quote?Symbol=DTV
  5. DISH: http://studio-5.financialcontent.com/investplace/quote?Symbol=DISH
  6. TWX: http://studio-5.financialcontent.com/investplace/quote?Symbol=TWX
  7. VZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=VZ
  8. CVC: http://studio-5.financialcontent.com/investplace/quote?Symbol=CVC
  9. MSG: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSG
  10. pointed out: http://investorplace.com/2012/11/5-stocks-wishing-for-a-hockey-season/
  11. TAP: http://studio-5.financialcontent.com/investplace/quote?Symbol=TAP
  12. ADDYY: http://studio-5.financialcontent.com/investplace/quote?Symbol=ADDYY
  13. much more impact for smaller, independent shops: http://www.mjtimes.sk.ca/Local/Business/2013-01-08/article-3152796/NHL-lockout-affected-independent-jersey-retailers/1
  14. paraphrase CEO Peter Wilburn: http://investorplace.com/2012/11/5-stocks-wishing-for-a-hockey-season/2/
  15. BUD: http://studio-5.financialcontent.com/investplace/quote?Symbol=BUD
  16. EA: http://studio-5.financialcontent.com/investplace/quote?Symbol=EA
  17. reported record number of sales for NHL 13: http://www.forbes.com/sites/johngaudiosi/2012/09/21/fans-turn-to-nhl-13-video-game-amidst-lockout-as-electronic-arts-sees-record-sales/
  18. Fox Business: http://www.foxbusiness.com/economy/2013/01/14/local-businesses-pay-for-nhl-lockout/
  19. Post-Gazette: http://www.post-gazette.com/stories/local/neighborhoods-city/nhl-lockout-is-bad-news-for-businesses-near-consol-656250/
  20. between $18,000 and $25,000 per game missed: http://www.azfamily.com/sports/Glendale-businesses-cope-with-games-lost-to-NHL-lockout-179319291.html
  21. took a 20% pay cut: http://espn.go.com/nhl/story/_/id/8398463/nhl-employees-forced-take-pay-cuts-sources
  22. either had pay reduced or lost their jobs outright: http://ducks.ocregister.com/2012/09/19/nhl-teams-cut-employees-pay-ducks-stand-pat/113017/
  23. Kyle Woodley: http://www.investorplace.com/author/kyle-woodley/
  24. InvestorPlace.com: http://investorplace.com
  25. They are: http://en.wikipedia.org/wiki/Columbus_Blue_Jackets
  26. @IPKyleWoodley: https://twitter.com/#%21/ipkylewoodley

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