Can the NHL Find Its Groove?

0:00The Varsity Podcast is brought to you by Major League Baseball, who this month is staging the World Baseball Classic, where 20 countries and territories compete in an international baseball tournament featuring rosters loaded with 78 MLB All-Stars. It's always amazing to see how quickly your child grows. And I'm not just talking about their height. From those early babbles to full-on storytelling, getting to watch how their ideas, creativity, and confidence develop over the years is honestly pretty incredible. Sometimes they surprise you with what they come up with. And Lego bricks can be right there with them through all of those stages.

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1:25Congratulations. You made the varsity podcast. My name is John Aranda and I am Puck's sports correspondent and host of this pod. And today we have a treat. Gary Bettman, the Dean of Sports League Commissioners, joins a pod. Gary, as you all surely know, has been the commissioner of the National Hockey League since 1993. That's 33 years. So we're going to talk about everything from the Winter Olympics to local and national media deals to expansion to team valuations. I've covered Gary for the past 20 years, and I can tell you these conversations are always a lot of fun. But before we get to Gary Bettman, today is Sunday, March 8th, and here's what I'm watching.

2:08I broke some news last week about the NFL's media rights negotiations in my private email called the varsity. And here's what we know. The NFL is looking to have new deals in place before the new season starts in September. Originally, there was a belief that the NFL would look to wrap its media rights negotiations at some point in the fall, but that's been moved up. That's important because any new contract would take effect immediately, meaning that the networks and Amazon would start paying more, a lot more this season. Now, my sources expect the NFL to announce their deals one by one rather than wait until the ink is dry on all of them.

2:49Interestingly, the current partners do not have matching rights and will be essentially buying out the opt-out clause to lock up rights now and deliver certainty to their investors. They expect that the next batch of contracts is going to run until 2033 or 2034, and most importantly, they are looking to cut their first deal with Paramount, which owns CBS Sports. Makes a lot of sense to set the market with Paramount, which has been investing in programming ever since Skydance and Redbird Capital paid$8 billion to buy the company last summer. They paid, of course,$7.7 billion for UFC rights, and just last week, picked up Warner Brothers Discovery for a cool$110 billion.

3:34That's billion with a B. Okay, now let's get to Gary Bettman. Gary Bettman, it is so great to have you join us again. My first question to you, I'm going to come at you right with the hard balls, Gary. My first question to you is, as a native Washingtonian, is there any way you can stop this John Carlson trade to the Anaheim Ducks? I woke up on Friday morning. To me, it's like watching Johnny Unitas in a San Diego Chargers uniform. Somehow you have to be able to step in and say, for the sake of Washington hockey fans, this cannot happen.

4:11Gary Bettman:It sounds like you're not a fan of free agency and player movement. And most other people in the media are busy complaining there aren't enough big trades. I mean, what's great about, you know, our seasons, about the competitive state of the game is that everybody wants to win. Our competitive balance is extraordinary and things are going to happen, which will capture the attention of fans. And I think what you're seeing is teams positioning themselves in some cases for a stretch run into the playoffs and others rebuilding for the future. And by the way, great to be with you. Well, I wanted to get you on ever since the Olympics ended.

5:00Of course, I mean, what a success. The TV ratings, gold medal win. But not just that. Your players were all over the place in Milan. From an NHL perspective, give me your sense of how the Olympics went, beyond sort of the play on the ice. well but it was all about the play on the ice the players were spectacular uh both on and off the

5:28Gary Bettman:ice and and that's true of both the women's team and the men's team uh but but hockey is such an important part of the winter olympics i think i was told that 40 percent of all tickets sold at the winter olympics are for hockey uh and you add that with i believe we're the most hours of programming. So using the Olympic platform is good, but for us going to the Olympics is always a mixed bag. It disrupts the season, changes momentum, players get injured. It's not our event. So we don't have the ability to do the things we would normally do to make it even better. We don't have the right to use their IP.

6:12Gary Bettman:So, you know, we're limited in terms of what we can do during that two and a half week period on our own platforms. But it was good for hockey. What was also interesting is I wasn't thrilled about the eight o 'clock in the morning on Sunday's start Eastern time for the gold medal game, particularly when people at NBC told me the rating would have been twice as high if we had been played at a normal time in the afternoon. It was great hockey. You know, Olympic buzz, a little different when you're in a big city, spread out in Milan was really just figure skating, speed skating, and hockey and the closest Alpine sports were about four and a half hours away.

6:55Gary Bettman:On balance, I'm glad we were there. I think it was great for hockey. I think it was great exposure worldwide, captivating the attention, not just of sports fans, but of fans of the Olympics. So on that basis, on balance, it was good i'm so interested to hear you say that that you are glad you are there because i i would think that if if i were an nhl owner why am i why am i making the ioc richer with my ip and and we're stopping the season and sydney crosby got injured for goodness sakes the reason we go prince man again it's not all good it's not all bad it's a balancing act first and foremost the players want to go.

7:40Gary Bettman:Our players love representing their countries. It's part of the authenticity that they bring to the sport and international best on best competition at all levels, even when they're teenagers are in the DNA of our players. And I don't think there's anything better than our best on best. And if you're an owner, yes, you know, Fiala got injured, Crosby got injured. You don't like to see that, but if you're looking at the long-term view of the growth of the game, and ultimately, I suppose, the growth of the NHL, getting that type of exposure is important. But again, the driving factor here is the players.

8:23Gary Bettman:What people I don't think recognize or remember, up until 1998 in Nagano, NHL players never went to the Olympics. And based on the experience of my prior life, I thought we should give it a whirl. And then we withdrew after Sochi. But it was clear that after we withdrew, the players really wanted to get back to it. And I'm extraordinarily respectful of the players' desire in that regard. And now with Marty Walsh leading the Players Association, we really are working together and collaborating on an international game plan, which is regular Olympics and regular World Cup so that the world can see the best, in my opinion, best on best.

9:12And despite what I said, you're committed to 2030 in the French Alps. 2034 in Salt Lake City, I can't imagine the NHL not doing that one. So for the foreseeable future, certainly the NHL is going to take part.

9:27Gary Bettman:Well, we in the Players Association agree that should be the calendar. We, again, based on the experience we had in Milan, we think with the International Olympic Committee and the International Ice Hockey Federation, there are things that we can tweak that would make this a better experience both for the Olympics and for the NHL and our players. So we have some work to do, but the intention is to continue to go every two years, best on best, whether it's ours, ours being the League and the Players Association, or it's the Olympics. So what is it that you would like to tweak? Certainly a 5 a.m.

10:14faceoff time on the West Coast is not ideal.

10:17Gary Bettman:That's a good start. And running the event. You know, we put on 1 ,312 regular season games and 90 or so playoff games. I think in terms of the flow, in terms of media access, in terms of highlights and the like that we should have access to, in terms of NHL personnel helping to make the event even better for the world, but also for the players, access is an issue. But, you know, these are things that we, we being the Players Association and the league, will discuss with the IOC. And on balance, it was a good experience. I am not complaining, but I think I can make the whole thing better for all of us.

11:08Gary, before I get off the Olympics, let me ask you just quickly about the controversy about, you know, President Trump joking about the women's team. My question for you is, I don't really want you to weigh in on that, but as commissioner, do you get involved with that or do you sort of sit back and sort of watch it play out? We're invited guests. It's one of the issues that we just talked about. We have no control when we're there over anything. And so the fact is what was portrayed and the reality were really two different things.

11:47Gary Bettman:nobody was disrespecting or intending to disrespect the women or the women's game the men's and the women's team were very close to each other i was at the women's gold medal game sometimes with the world being the way it is things get portrayed and get caught up in ways that that aren't reflective of everybody's best intentions we uh you you reference the uh huge amount of people both in the u.s and canada that we're watching not just a gold medal game but really the entire tournament what what sort of bump uh are you expecting or how how do you expect well nationally up before the olympic break i think we were up 29 % in the United States.

12:40The bump we've seen so far nationally is another 23%. The 29 was pre-Olympics.

12:47Gary Bettman:The 23 is post-Olympics compared to where we were pre-Olympics. There's a lot going on. The game is in great shape. It's never been more skillful, more competitive, more entertaining. And it's been growing, which is why you saw what you saw. And there are other factors that are going, even heated rivalry has been a factor in what we've seen this year. There is clearly intense interest around the game, and we continue to grow on all platforms. Are you hearing the dogs barking? You know what? I think the dogs are big heated rivalry fans. Gary, you brought up even heated rivalry. They went nuts. Yeah, on cue.

13:33No, somebody walking the dog must be near the house. But at the end of the day, we're in a good place,

13:43Gary Bettman:and the Olympics provided yet another opportunity to extend our fan base and generate more interest in the game. You know, I think 26 million people watched the gold medal game in the United States, another 9 million in Canada. Again, had we been at a normal time, it probably would have been double. And I think we set a record for a sporting event that started before nine o 'clock in the morning Eastern time. Gary, let me take a quick break and come back. And I do want to talk about sort of the early season ratings and also get more into the heated rivalry.

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15:33Standard text messaging rates apply. Sports betting is void in Georgia, Hawaii, Utah, and other states where prohibited. Gary, your TV ratings so far this year up, as you said, they were up 29%, 30 % going into the Olympics. What do you attribute that to? Certainly that's more than just an HBO show that all of a sudden got popular.

15:59Gary Bettman:It's never one thing, but everything we do and everything that drives interest in the game starts with what takes place on the ice. Our players have never been better, skillful, faster. The game, I think we have the best competitive balance of the four major sports. The game is exciting, it's entertaining, it's unpredictable. So some data points. 54 % give or take of our games are tied at some point in the third period. We're seeing close to record numbers and the number of multi-goal come from behind victories, including games that are tied and won in the last five minutes of a game. You look at the races for the playoffs with less than a handful of exceptions.

16:51Gary Bettman:Everybody's in the hunt and everybody knows how great and unpredictable our playoffs are, particularly when you start with the first round. And so the health of the game is what drives everything. And in terms of players, think about the spectrum of players we have playing the game. And I'll do this in age. So you have Crosby and Ovechkin, 39, 40 years old. You've got Connor McDavid, Austin Matthews, Nathan McKenna in their mid to late 20s. And then you see this crop of young stars bedard celebrini schaefer i mean we are blessed with incredible talent throughout the league and and it's it's a beautiful thing to watch gary i do want to talk to you real quickly about heated rivalry i my daughters i think they were worried about their old man and they they were they told me do not watch it it's it's too spicy so you do not watch it.

17:56You binge watch it. When you say you binge watch it, was it all in one sitting? Was it one full day? Yeah.

18:02Gary Bettman:Yeah. I did it. You know, it was released on HBO Max around Thanksgiving. And when the data started coming in, in terms of what kind of interest it was generating, it was unprecedented from anything I'd ever seen, not just with respect to us, that I'd ever seen anywhere. And I needed to understand what this was all about. So it was in December that I, you know, I travel a lot. I'm busy. But I decided I had to see it. And so I sat up one night watching it. You had to, you fast forwarded through some scenes, right? No, I watched the whole thing. Say, you're the dedicated. Did you watch it? I told you my daughter's told me not to, and I'm taking them on their word.

18:58Gary Bettman:So you really should watch it. It's a wonderful production. Somebody told me. So I'm not 100 percent what I'm saying is accurate. But somebody told me that episode five and you really can't appreciate episode five. unless you watched the buildup through the first four episodes, may have been the highest rated episode on Rotten Tomatoes compared to anything ever. It was extraordinarily well done. I actually had the privilege in the last couple of weeks of meeting the showrunner and had an opportunity to talk about it, and they're doing a second season. this is this has turned into a force of nature and it's engaging so many people you know with with the storytelling and it is a love story and at the end of the day if it's driving more interest in the game that's great but I think the story is more important than that?

20:06Let me talk about something that isn't quite a force of nature. A certain red flag that's out there for the league is the local media right situation. Of course, Main Street Sports, they have I think seven of your teams, seven NHL teams, is winding down. They're doing the regular season, and I think they also have a first round of the playoffs for their teams that make it. But then next season, they're not going to be around. What are you going to do with the local rights? What's the solution there? Well, two things. One, it's not just us. It's baseball and basketball as well in terms of the regionals.

20:46We're going to have to adjust.

20:48Gary Bettman:And that comes in a variety of ways. One, in the short term, at least, you're seeing teams look for local solutions. Some will stay on regional sports channels. A few of them are still viable. Some will go to direct streaming like APMC. And some are going over the air. And we're seeing that in places like South Florida, Tampa, and Las Vegas. And in those cases, the clubs have been able to replicate the rights to a large extent. And their ratings have dramatically increased. maybe going over the years a little bit of back to the future. I also think you're going to see more national distribution.

21:33Gary Bettman:In addition, we have developed the capability for our clubs that any club that needs assistance in distributing games, we have an app, we have production capabilities, and we will assist. The goal with that is to make sure our fans always have access to the games, and the business model is going to have to evolve to take into account the changing environment. Baseball right now is trying to amass its local rates into a package that it's going to go to market with. Basketball seems to be, at least the streaming aspect of it, basketball seems to be taking the same approach. It sounds like you're taking almost more of a sort of wait and see, let the teams figure out their local, they know their local markets better than you do, in a certain sense, right?

22:23Gary Bettman:We're really doing all of the above. We're looking at the national opportunities because in a couple of years, we do have a national deal coming up. You know, the NBA just did a national deal. Baseball's doing one. So our timing is a little bit off, but we're looking at all possibilities. And remember that over a thousand of our games are streamed out of market on ESPN Plus, and we've been streaming for years. I think actually we started streaming before anyone else because our current deal with Rogers, which is in its last year, provided for streaming 12 years ago. So it's not we're not any different.

23:05Gary Bettman:We're just making sure we're going down parallel paths because the economic model, nobody's quite figured out yet. And so we want to make sure there's maximum access for our fans in every market. And we'll figure out the business model once we make sure everybody's getting the games that they want. Am I correct in believing that the economic model? I mean, the economic model for the RSNs was was great for sports teams, not just the NHL, but like you said, baseball and basketball as well. It ensured that somebody that was not a fan that lived next door was helping to subsidize me watching the regional sports network, which is paying the rights fees.

23:51Is there a way to match that through digital? I mean, certainly teams have to expect that they're going to take a step back, right, in terms of the local rights.

24:02Gary Bettman:I'm not sure that when it comes to sports content, live sports content, there's nothing more valuable. So it's not really that you got to take a step back because the value of anything is only increasing. What I think people need to remember is cable initially got its penetration 40 or so years ago on the back of sports, local sports. That's what caused penetration and that's why it was bundled. I think you're going to see more bundling on streaming. And because sports content is the most important and most valuable, I think it's going to maintain its premier position. It's just a question of how it gets distributed and how it gets bundled.

24:44So taking that and going off on the national basis now, the good news is you're up 30 percent going into the Olympics. You're up another 20 percent for the couple of weeks after the Olympics. The NHL product on television and on streaming has never been more popular, in my opinion, according to the ratings. That being said, the NFL is about to come in and take billions of dollars out of the market. I've reported already that you and ESPN and Turner have already started talking about possibly renewing early. Where does that stand? Are those serious talks right now? Or kind of you talk to your partners all the time?