NHL commissioner Gary Bettman claims “monetization is not what’s driving us,” but monetization is key to the league’s return to play plan

It’s quite something to hear a commissioner of a professional sports league proclaim that a particular decision is not about the money, especially when there’s a solid amount of evidence that it actually is about the money. The NHL announced its return-to-play plans this week, and those would seem to involve a fair amount of money on the TV side, especially for the expanded postseason tournament they plan to hold (and while some of that is about not having to refund TV partners rather than new revenues, it’s still notable money). But NHL commissioner Gary Bettman spoke to Daniel Roberts on Yahoo Finance Live Thursday and claimed that the league’s return-to-play efforts are about fan demand, not monetization.

Here are some specific quotes from Roberts’ writeup:

Now NHL Commissioner Gary Bettman tells Yahoo Finance Live, “Monetization is not what’s driving us. This is not something that’s going to bring in a lot of revenues relative to what our projections were for the ‘19-’20 season. What’s at play by playing the rest of the games, ostensibly for television, is not as material as our other sources of revenues. We’re doing this because we’re hearing from our fans that they want to see us back and they want to see a conclusion to the ‘19-’20 season, even if that’s on television [with no fans present].”

Bettman’s claim that returning to play isn’t about money may strike people as disingenuous: of course the league wants money, and returning for the Playoffs, even with no fans, will bring the league more money than not returning to finish the season at all. Returning will at least give NBC Sports something to broadcast in the summer, when it would have had the Tokyo Olympics, which have been pushed to 2021; returning should make some NHL sponsors happy for the exposure.

But Bettman’s point is that either way, the 2019-2020 season is a financial disaster for the NHL relative to normal seasons, whether it returns to wrap up or not.

Look, absolutely, 2019-2020 is going to be a rough season for the NHL regardless relative to normal. And yes, the league appears to get more money from gates and other game-day revenues then from its broadcast deals, so it will still be losing a lot of revenue here (to say nothing of the additional costs associated with its hub city plan and with its proposed safety precautions). But whether monetization is “driving” the league or not (which is a very subjective point; anyone can claim they’re being driven by anything, regardless of their actual motivations, and of course Bettman isn’t going to say “Yes, we’re only doing this for the money!”), the financial side of this is very much significant. And the key comparisons are not to an average year, but to if the postseason isn’t played at all.

There are several important components to the short-term finances here, from national TV to local TV to local radio. First, a NHL postseason (and an expanded one at that) is very good news for NBCUniversal, and specifically for NBCSN. That network surpassed ESPN2 and FS1 in both prime time and total-day viewership in 2018, and while a lot of that was about the Olympics, the Stanley Cup playoffs were a big part of it. NBCSN typically shows hockey playoff games most nights for months and draws good viewership for those, and they lost that content this year.

Not just a postseason but an expanded postseason is good content for NBC, and the money is far from insignificant. The current U.S. national TV deal is $2 billion over 10 years, so $200 million a year, and while the league certainly wouldn’t have to give all of that back given that it played most of its regular season, it would probably have to make up a good part of it in some way with no postseason. No 2020 postseason at all also might not bode well for the NHL’s overall relationship with NBC, which is important considering that their current deal there expires after the 2020-21 season (and that NBC remains perhaps the strongest contender for at least the top rights in a new NHL deal given ESPN’s other commitments, particularly to the NBA). And yes, a postseason that runs into the fall and overlaps with NBC’s NFL and college football commitments (presuming those games wind up happening) isn’t ideal for NBC, but it’s far better than nothing, and NBCUniversal has plenty of affiliates they can punt sports content to if needed, as we’ve seen with both the NHL playoffs and with the Premier League’s final matchdays.

Oh, and while the focus here is on the U.S. arrangements, it’s notable that the money’s even more significant on the Canadian side. There, Rogers Sportsnet is paying $5.2 billion Canadian ($3.7 billion U.S. at current exchange rates) over 13 years ($400 million CAD annually, or $290 million USD at current exchange rates). Saying “We’ll have no 2019-20 postseason at all” would be consequential there as well.

Then there are the local TV and radio deals. Radio isn’t a big part of the financial equation for most NHL teams, and some teams have even gone streaming-only, but it matters in some markets. And the local TV deals are a significant source of income for many teams, and they’re likely a big part of the reason why the NHL didn’t announce a regular season cancellation earlier than it did. Of course, the league did eventually wind up cancelling that regular season, and there will likely still need to be some makegoods on some fronts there (the league didn’t hit its required numbers of games to RSNs, so the RSNs then didn’t hit the amounts of games they guaranteed to distributors), but many RSNs have been allowed to offer their own broadcasts of early-round playoff games (in addition to the national broadcasts) over the past few years. It’s not 100 percent clear yet that that will happen again this year (and if so, for how many rounds, and for which RSNs), but if the league can give some RSNs some playoff content, that certainly helps their situation there.

There are also the long-term monetization aspects to consider. Finishing out the 2019-20 season, if all goes as the league plans and if there are no major COVID-19 outbreaks during the postseason (a big if), could be significant for the NHL in the long run. For one, if the postseason starts in July or August as they’re hoping, they’re putting out some live sports content at a time when there may not be much else. It’s still pretty up in the air what’s going on with the NBA and MLB, but there’s at least a chance the NHL gets some prime sports slots mostly to itself. And that could be very nice for them, especially with their U.S. TV deal ending soon.

A postseason and a Stanley Cup where all goes smoothly (that’s a big if, but we’ll assume it for now) also probably works out better for the NHL with its fans than just ending this season and moving on to 2020-21. Bettman’s claim that “We’re doing this because we’re hearing from our fans that they want to see us back and they want to see a conclusion to the ‘19-’20 season, even if that’s on television [with no fans present]” has some merit; there definitely are a lot of NHL fans lobbying for a play resumption. (However, it should be noted that there are also quite a few NHL fans who are worried about the safety issues posed by a return to play for athletes, support staff, arena workers and others, to say nothing of questions about health system resources in the chosen hub cities being dedicated to the NHL rather than public health; it’s not a clear “Every hockey fan wants the league to resume at all costs.”) But even Bettman’s claim here is a monetization angle to some degree; the NHL doesn’t want to please fans out of the goodness of its heart, but rather to retain those fans’ eyeballs and dollars for future seasons.

It’s understandable why Bettman said what he did. He’s the public-facing presence of the NHL, and of course he’s going to claim that their plans to resume are about the fans rather than about the dollars. And he’s not wrong that this resumption plan won’t be nearly as lucrative for the league as a regular postseason would have been. But this is absolutely still a monetization issue, even if that’s about reducing their losses rather than making gains. That’s not necessarily wrong; this is a professional sports league that exists to make money. But painting themselves as just doing this for the fans is a bit disingenuous at best. And while we can’t expect Bettman to say publicly that it’s actually about the money, the role of money in this planned restart should definitely be considered.

[Yahoo Finance]