Do You Know The Business of Hockey, Part II?
You are the president of a network which has been invited to submit a bid for an NHL TV contract. You have 30 years of viewership statistics available to you (numbers are actual numbers provided to the NHL by various media sources)
1975 1.18MM viewers per telecast
1980 1.21MM viewers per telecast
1985 1.30MM viewers per telecast
1990 1.41MM viewers per telecast
1995 1.46MM viewers per telecast
2000 1.49MM viewers per telecast
2005 1.54MM viewers per telecast
2007 1.81MM viewers per telecast
The asking rate is $50MM per year.
You are able to get commercial time worth $26MM per year
As a division of a publicly traded company, you cannot legally buy the rights at a loss.
How do you convince potential sponsors to buy time to reach $50MM a year?
These are US numbers
CBC averages 1.4MM per telecast on a population base that is 11% of the US. Their production costs are minimal because they share permanent cameras with TSN at all 6 Canadian arenas.
TSN averages almost 900,000 per telecast on the same population base.
Canadian networks spend what they can and will continue to do so
But in America, it's a different story. The NHL is asking for peanuts ($50MM compared to what the NFL and NCAA get is peanuts) but sponsors still aren't ponying up - despite the fact that it has increased it's viewers (but until last year, ratings were stagnant)
- 1 decade agoFavorite Answer
-Hockey is an Olympic sport; sell on reaching an olympic audience (which is a huge ratings machine). If I'm a free to air network that may or may not have a tie-in with the IOC, that could be huge. If not, I'd certainly try to do everything possible to ride the Olympic wave.
-Online revenues on my "brand/chain" website; since hockey's audience is heavily european, I'm trying to sell targeted ads by IP (customizing for European visitors), including travel to North America.
Inserting foot into mouth carefully...
- Anonymous1 decade ago
The games are just the start of it. Remember Hockey is what is going to get the bulk of your viewers to that station. Next is a highlight show, maybe a Movie night. Verses used UFC, Bull riding, Bicycling and other things to get other groups to view. This ultimately brings more viewers, more time slots, more add revenue and most importantly more $$$. So as important as it is to have that NHL contract there is a whole day of programing that will draw more people to the station and with the right advertising during the day hopefully turn more viewers to the games equaling new viewers and more money.Source(s): My head again!!!
- Anonymous1 decade ago
I think just the fact that the increase in viewers have gone like this through the last 20 years:
90-95 = + 3.5%
96-2000 = + 2.1%
01-05 = + 3.3%
06-07 = + 17.5%
This is a promising trend, obviously there is tremendous upside with marketing their product, and with any business venture, you want to get in early before the price gets too high. Let the numbers do the talking.
- cdn24fanLv 61 decade ago
I will try to sell the point that numbers are improving - up 21% over the year 2000.
Also My network will do a better job of hiring the right comentaters and analysts and present a better product than the old network. This will further increase our ratings increasing our ability to generate comercial time.
I would hire staff away from the successful networks in Canada.
Hey if it was a license to print money they would want more than 50M for the rights.
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- tomjc43Lv 71 decade ago
Since you must double your commercial input you double your airtime. Thus airing two hockey games instead of the one. This will double your commercial time but keep your costs equal. Therefore TSN has two games a week instead of one.