Tampa Bay Lightning’s Curtis McElhinney # 35 lifts the Stanley Cup after the Tampa Bay Lightning beat the Dallas Stars 2-0 in the sixth game of the NHL Stanley Cup Finals to take the best of seven series 4-2 am Win Rogers Place September 28, 2020 in Edmonton, Alberta, Canada.
Dave Sandford | National Hockey League | Getty Images
It has not been easy and will most likely result in hundreds of millions of dollars in losses due to Covid-19. Still, the National Hockey League completed its bubble experiment and crowned a champion on Monday.
The NHL awarded the Tampa Bay Lightning their famous Lord Stanley’s Cup after a series of six games with the Dallas Stars. The ratings were lower than last year in Boston Bruins-St. Louis Blues series, but audience figures aside, league manager Keith Wachtel told CNBC that the NHL was in a position to generate additional revenue after its bubble game.
Wachtel, the NHL’s chief business officer, said the league will be investigating the experience of fan engagement in the arena with their new 5G partnership Verizon, including exclusive 4K camera experiences. The NHL will also try to speed up its in-game virtual signage technology, said by Quail as the “greatest game changer you can have in sport”.
NHL used a mix of national and local advertising on its dasher boards to make up for lost game day revenue, including ticket sales. NHL commissioner Gary Bettman said game day revenue represents 50% of the NHL’s annual revenue, which was around $ 5 billion in 2019.
“From the point of view of ticketing, we have missed significant revenue, especially in the playoffs, where our games are filled every evening,” Wachtel said in an interview on Wednesday.
Wachtel said the Edmonton and Toronto bubble crew replaced the dasher boards with local team-level sponsorships after each game. He called the advertising space “valuable inventory”.
Wachtel said the NHL wants to maximize “signage on a global basis and in individual markets.”
Wachtel said the current Dasher boards have “limited messaging,” and some brand logos are “in a crowded environment,” which affects exposure.
After testing what was known as the Digital Enhanced Dashboard (DED) at the NHL’s All-Star Competition in January, Wachtel said the league could be ready to add the virtual banners for the 2021-22 season.
“Perimeter Signage” technology enables the NHL to replace physical sponsors in the arena on the boards with interchangeable virtual advertisements during television broadcasts. The NHL invested in a London-based company Supponor Develop the ads that Wachtel says will enable brands to own what appears.
Digitally enhanced Dasherboards from the 2020 NHL All-Star Game in St. Louis.
“You can provide [corporate sponsors] Messaging, social media, but you can also provide production elements, “said Wachtel. He added that the technology would” change the way leagues and marketers view signs for sports real estate “.
The challenge with adding the technology is “to scale it for every game, every night, and around the world – it took a long time to perfect,” said Wachtel. “There’s a lot that needs to be tested and worked through.”
The NHL wants the virtual slots to help build global partnerships. If effective, they could provide the clubs with additional sponsorship income. The teams could sell virtual rooms – also for street games – that replace in-arena dasher board advertisements with “signs for the local market,” said Wachtel.
“While the adversary’s signage and these markets have some value, a lot of it is wasteful,” said Wachtel. “That local [advertiser] Sponsoring the Pittsburgh Penguins doesn’t care about seeing the signage in Columbus, let alone Toronto. “
Verizon Communications Inc. 5G Wireless Signage will be on display at the company’s booth during Mobile World Congress Americas in Los Angeles, California, USA on Wednesday, September 12, 2018.
Patrick T. Fallon | Bloomberg | Getty Images
Engage with Verizon
The NHL also incorporated puck and player tracking technology as bubble play progressed into the postseason. The spectators could identify players, track their ice age and puck speed.
Wachtel said the broadcasters “picked their seats” to display the analysis as “they wanted to make sure they didn’t interfere with the viewing experience”.
Expect the NHL to include the additional stats in the upcoming seasons. It’s another source of income that can help with that League “hat trick” of partnerships with sports betting providers, including FanDuel.
With the surge in sports betting in the US and the rise of the micro-betting market, the NHL will monetize player tracking data through its media rights contract and could also add mobile app options.
And the NHL wants to develop augmented reality options in the arena to increase fan engagement and draw viewers back after the pandemic. This is where the NHL’s partnership with Verizon begins as the league needs 5G to add new digital capabilities.
Wachtel did not go into the details of the Verizon partnership, but said that the deal is a “long-term, multi-year” agreement that will not exceed 10 years. The telecommunications company will set up its 5G network in NHL arenas.
EDMONTON, ALBERTA – JULY 30: The Nashville Predators and Dallas Stars run in warm-up practice before against the Nashville Predators exhibition game prior to the 2020 NHL Stanley Cup Playoffs at Rogers Place on July 30, 2020 in Edmonton, Alberta, Canada. (Photo by Jeff Vinnick / Getty Images)
Jeff Vinnick | Getty Images Sports | Getty Images
To buy stock?
Still undecided how to proceed with its 2020-21 campaign, the NHL is putting its six-year planned labor peace at risk. The league already has opted for a repetitive bubble won’t be enough.
This series of events could harm any leverage the NHL has launched into a new round of media rights negotiations as the league plans to increase its contract with NBC Sports to over $ 200 million a year. The current agreement expires after the next season.
However, should the NHL maintain its labor peace and attract an extensive media package with virtual ads, Wachtel said the NHL was “a stock to buy.”
“Business is strong,” he said, forecasting “a few more multi-year deals in the coming months,” taking into account Seattle’s expansion team, the Kraken. that will debut in 2021-22.
In terms of league audience ratings, the Stanley Cup final viewership jumped from one of the most watched viewers in 2019 (5.3 million viewers) to around 2 million viewers in an effort to get the Lightning to win. However, this year’s finals included two non-traditional hockey markets, and all four major U.S. leagues were still in session, which helped the drop in ratings.
“We are not currently dealing with TV ratings,” said Wachtel. “Sports are plentiful – most sports are in decline. We see this year as an outlier and are continuing to build our year-over-year ratings.”
Correction: In an earlier version of this article, DraftKings was referred to as an NHL partner. The company is FanDuel.
Disclosure: NBC Sports is owned by NBCUniversal, the parent company of CNBC.