On Thursday, the NHL, Comcast, DirecTV, Madison Square Garden Co., and eight NHL franchises proposed a settlement to an antitrust class-action lawsuit filed in 2012. Should the settlement be accepted by the judge, the NHL will become the first of the major sports leagues to offer subscription programing in an unbundled format online.
There is good news and bad news coming out of the proposed agreement.
Let’s start with the good news: Fans will no longer have to purchase the entire NHL Game Center Live package just to watch their favorite team play.
Starting with the 2015-2016 season, the NHL will offer viewers the option to purchase a single team subscription of Game Center Live (GCL) for a price lower than the bundled version with all the games. In the first year of the five-year proposed offer, the unbundled option will be 80-percent of the cost of the full GCL, less any additional discounts offered. (The unbundled price is subject to change in subsequent seasons based on terms listed in the settlement, which can be found here.)
Sounds great, right?
For displaced fans outside of their beloved team’s market, it sure is. You’re no longer throwing away cash for games you weren’t going to watch in the first place.
Yet if you’re a fan that happens to live in your team’s home market, things aren’t as rosy. You can purchase the single team GCL option, but your viewing is still subject to blackout restrictions.
For example, to a Kings fan living in LA who doesn’t own a TV and chooses to stream media online only, purchasing a single-team Kings package doesn’t do much. They’re still going to see this when you try to tune into Kings games:
To put it simply, fans in home markets: you’re still out of luck online. You’ll have to keep working instead of watching the game at the office.
As much as we might want to point the finger at the NHL for these incredibly viewer unfriendly regional television deals, we can’t. It’s the teams – not the league – who negotiate and execute the regional agreements. Television contracts constitute one of the major funding resources for most teams.
The NHL sells the rights to broadcast games to cable and satellite companies. Those companies turn around and offset the cost by selling you a cable or satellite subscription with the regional sports networks either included or added for an additional fee.
Then there is NHL Center Ice, which was also addressed in the proposed settlement.
Purchasing a subscription to this add-on channel from your cable or satellite provider gives you access similar to that of Game Center Live… provided your telecom company carries it (I’m looking at you, AT&T U-verse). Via the settlement, Center Ice will be free for three weeks at the beginning of the season for all cable/satellite subscribers of companies who carry the programming. Blackout restrictions will continue to be in place.
The NHL will make available unbundled (single-team) versions of Center Ice to cable and satellite providers. Yet, the league will not mandate the companies to extend the single-team programming to their customers.
Why might that be? Because it would require companies to cut into their profit margin, something the NHL doesn’t want to be the cause of.
Instead of selling bundled Center Ice at a price point they’ve budgeted for, the cable/satellite providers would have to acquiesce to the NHL’s requirement (stated in the settlement) that the unbundled packages be sold at a discounted price, similar to that of Game Center Live.
It makes business-sense as to why the NHL would give this product away to distributors already carrying Center Ice, but not require they actually offer it to their customers. The companies take the financial hit, not the league, for each unbundled package (cheap) sold over a bundled (expensive) Center Ice.
In the US, the NHL needs the media companies distributing their product and would rather not alienate them. This is unlike the NFL, where companies are paying huge sums of money to get a piece of the action. Hockey just doesn’t have the market share, or demand, to give the league much leverage in situations like these.
Now, everything you just read could be rendered moot should the judge deny the terms of the settlement. The probability of that happening is unknown. The defendants were eager to settle before facing a jury trial in the near future, and it’s not unlikely they’d quickly rework the settlement should the judge disagree.
However, if accepted, the settlement could be used as precedent in similar antitrust suits against other sports leagues.
stick-tap @EriqGardner for legalese decoding
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