ESPN to Pull the Plug on NHL

Already reeling from a canceled season, the NHL has taken another hit: ESPN has decided to not pick up a $60-million option to retain its broadcasting rights in the United States, a source familiar with the situation said Friday.

A spokesman for ESPN declined to confirm that decision, but the source said it would be announced Tuesday, the day before the option deadline. NHL officials have been informed of the decision. The league had no comment.

The decision might not signal the end of ESPN’s involvement with the league. Network officials may try picking up the same rights for less money. An exclusive negotiating period exists until Wednesday.

The league still has television deals. It has agreed to a two-year deal with NBC to broadcast games when the league starts back up. It has no up-front money. The NHL will share in revenue after NBC has recouped production costs. The NHL also has contracts with the Sports Network in Canada and the Canadian Broadcasting Company.

But as for ESPN -- “We just think $60 million is too much right now,” a network official said.

When the five-year, $600-million deal that included the $60-million option was negotiated, ESPN officials were aware that a lockout could jeopardize last season.

The lockout extended into February before Commissioner Gary Bettman canceled the season and the deadline on ESPN’s option was extended from April until June.

The NHL does retain a little leverage: ESPN promoted itself as the only network with the four major sports after adding the NBA to its lineup in 2003.

The ESPN contract was worth $2 million to each NHL team, about the price of a second-tier defenseman last season. Even so, NHL officials can ill-afford to lose revenue from what was a $2.1-billion industry before the lockout.

Should ESPN work out a new deal with the NHL, passing on the $60-million option may still be harmful to the league’s reputation -- one that had already been damaged by the cancellation of the season.

ESPN’s decision could also affect NHL sponsors. Molson Coors, Ford and Sony Canada reportedly are considering withdrawing their advertising deals unless the labor dispute between the league and the NHL Players’ Assn. is resolved by the middle of next month.

The NHL has been a familiar presence on ESPN since the cable network’s inception.

ESPN showed some games in 1979 and was awarded the national broadcasting rights in 1984. It lost the rights to SportsChannel in 1988 but regained them in 1992.

But ESPN gradually has reduced its coverage of the NHL in recent seasons. It showed 70 games in 2003-04 and was scheduled to show 40, all on ESPN2, had the option been picked up.

NBC is scheduled to show seven regular-season and up to 11 playoff games under the first year of its contract.

ESPN’s declining interest in the NHL coincided with the desire of the Walt Disney Co., its parent company, to shed hockey. Disney has agreed to sell the Mighty Ducks to Henry and Susan Samueli. When the NHL’s five-year, $600-million deal with ABC and ESPN expired after the 2003-04 season, Disney did not pursue a new deal for ABC.