ESPN Freezes Out the NHL

The NHL was left without a cable TV carrier Tuesday when ESPN, which last week declined to exercise a $60-million option for next season, said the league had refused to renew at a lower price or pattern a new deal after its revenue-sharing agreement with NBC Universal.

“Right now we’re done negotiating,” Mark Shapiro, executive vice president of ESPN, told reporters on a conference call. “We do not anticipate carrying the NHL next season.

“We’re not playing games here. We wanted to do a deal and get something done.... A no rights-fee deal is the only model that should exist for any partner of the NHL. Who’s to know what damage has been done?”

Should the NHL and the players’ association soon agree on a labor deal and end the lockout that canceled this season, Shapiro said the rights fee would be worth “well below $60 million. Half that.”

ESPN told the NHL last week it would not exercise its option but appeared to leave open a possibility it might continue at a lower cost. Shapiro said NHL Commissioner Gary Bettman was “uncomfortable cutting the price tag on the rights fee below $60 million.”

The NHL said the fee was fair.

“When the now-expired contract was negotiated, the $60-million option price took a work stoppage -- potentially a long-term work stoppage -- into consideration,” Frank Brown, the NHL’s vice president for media relations, said. The NHL first appeared on ESPN in 1979, the network’s debut year. ESPN acquired the national NHL TV rights in 1984, lost them, and regained them in 1992.

Before a five-year, $600-million agreement between ABC/ESPN and the NHL expired a year ago, ESPN was given an option to televise games in 2004-05 for $60 million, and it scheduled 40 regular-season games for ESPN2. That option was to expire on April 15, but ESPN extended it to today in recognition of the uncertainty caused by the labor dispute.

Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon, said the NHL would lose more than money by severing ties with ESPN.

“It’s more symbolic,” he said. “ESPN has gotten to the point where it legitimizes a sport by putting it on its airwaves. Any sport trying to establish its credibility in North America has to be on ESPN.

“This will lead to further regionalizing of the sport, and that’s where you’re going to get most of your coverage, regional sports networks. That will make the job of the marketing side of the NHL that much harder.”

Shapiro said ESPN’s programming alternatives included college football and basketball, movies, scripted dramas and, perhaps, more baseball.

NBC Universal acquired the NHL’s over-the-air rights last May in a two-year deal with a two-year option. NBC was to show seven regular-season games and six playoff games on Saturday afternoons, and five Stanley Cup Final games in prime time. It paid no rights fee and negotiated a formula to split advertising revenues after paying its production costs.

Lou D’Ermilio, a spokesman for FSN, said, “We’re pleased with our regional approach to NHL coverage. If an economically viable option presented itself, we’d be interested in discussing it.”

The NHL and the players’ association are scheduled to resume negotiations today in Toronto in a small-group format. Such sessions have recently produced progress toward identifying revenues for the purpose of linking payrolls to revenues. Large delegations from each side are to meet Thursday in Toronto.