One year ago, Forbes Magazine called MLB Advanced Media “The Biggest Media Company You’ve Never Heard Of.”
As of Tuesday, hockey fans can brag they know.
MLBAM, already the streaming-video provider for HBO, ESPN and World Wrestling Entertainment (among others), closed a deal with the NHL to run GameCenter Live, Centre Ice, the NHL Network, NHL.com and the individual team websites for the next six years. (The video rights are worldwide, minus Rogers-controlled Canada and the Scandinavian countries.)
So, how does this affect you?
First, much to the relief of teams, players and agents, it will provide a revenue boost at a time the salary cap is flattening. According to several sources, the deal was first presented to the Board of Governors at the June meeting in Las Vegas. NHL COO John Collins would not confirm these figures, but word is the league valued the deal at $200 million per year.
The annual breakdown: a $100M rights fee to the NHL, $20M in savings from the league not having to invest in the capital resources/expertise it would take to go on its own, and $80M in equity in MLBAM’s technology business.
For the purposes of the salary cap, “We were told to expect $120M per year in added revenue ... $4M per team,” one governor said. Hockey Related Revenue is split 50/50 with the players, so that would raise the ceiling. Another source indicated this is double what the league previously earned for these rights.
As for the content, some of MLBAM’s best work is found in its “Statcast” videos. I spend way too much time watching this stuff, but here are two examples why: This look at David Price’s fastball in his Blue Jays debut:
Also, this analysis of arm strength among shortstops:
The NHL did a test run of player tracking technology at last season’s All-Star Game, but ran into roadblocks in attempts to use it on a more regular basis.
“We were struggling with costs,” Collins said. “The chip added… $200 per puck, which would not allow you to do the things you like to do with them. They are shot into the crowd, people keep them. Players, officials like to give pucks to fans. It’s not something we wanted to take away.
“When we met with [MLBAM], their answer was, ‘We can do this… We’ll need time, but we can do it.’”
“There are lots of different ways to do it,” MLBAM President and CEO Bob Bowman said. “We are going to test. One other way is cameras on the rinks. You can put cameras right there and track a lot of things…is that something that will work?
"We’ve discussed options with [the NHL]. It’s our goal to gain enough knowledge during the 2015-16 season to figure out what is best. They’ve shown a willingness to consider other solutions, which may pay larger dividends in the long run.”
Bowman said MLBAM has discussed the possibility of such a partnership for three years. He had some pretty good lines, saying you can put the deal in the “category of perseverance over brilliance,” and referring to hockey as “the mother’s milk of Canada.”
Why the NHL?
“We know first-hand the value of digital rights to fans, they love live sports,” he added. “Fans really value these teams and these players. This is what they want, they want it now, on every device they can get it on.”
MLBAM is very protective of who uses its videos online. As news of this agreement broke, there were questions about what this could mean for fans who create popular GIFs during games.
“We distribute our content with our logo embeddable and shareable with everyone,” Bowman said. “In general, what the league has asked for is ‘Don't roll-back, what’s being done is being done.’”
Collins said the NHL wants its new partner to develop an app similar to MLB.com At Bat, baseball’s successful online portal. Bowman said that is the plan.
“No league, including the NFL, has the ability do to it themselves,” the NHL’s COO said. “You need a partner.”
Collins added the NHL discussed this possibility with other providers, including DirecTV and Comcast. He would not confirm, but one source indicated the league and Comcast considered extending their current television deal as part of the conversations. (It has six years remaining.) But MLBAM was the most aggressive bidder.
The NHL Network, previously based in Toronto, will move to Secaucus, NJ where space is being built at the old MSNBC studios. League and team websites will stay as is until January, then unveil their new look.
“We understand technology, we understand video and we understand distribution,” Bowman said. “We won’t suggest we have better thoughts. We’re the first to recognize we’re the new folks on the block, and have lot to learn… [Commissioner Gary Bettman] made it clear teams have a lot of rights with their own websites. This is no way encroaches on those rights.”
But there’s no doubt the NHL wants to see what Bowman’s group can do. He’s not going to over-promise and under-deliver. He’ll take his time, but he’s got a great track record.