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N.H.L. Returns to ESPN in a 7-Year Deal With an Emphasis on Streaming

todayMarch 11, 2021 1

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After an absence of 16 years, the National Hockey League is returning to ESPN.

The Walt Disney Company, which owns ESPN and ABC, announced Wednesday that it had signed a seven-year rights agreement with the N.H.L. that will begin with the 2021-22 season. ESPN or ABC will show 25 games and half of the playoffs each season, and the Stanley Cup finals in four of the deal’s seven years.

There is also a large streaming component to the agreement. Seventy-five regular season games each season will stream exclusively on ESPN and Hulu. ESPN+ will also absorb NHL.TV and effectively become the N.H.L.’s out-of-market streaming package in the United States, where fans can watch more than 1,000 games that are not televised in their area.

Financial terms were not announced, but according to two people familiar with the details, Disney will pay the N.H.L. an average of about $400 million annually. The people spoke on condition of anonymity because they were not authorized to comment on the record about the deal.

For the past decade, nationally televised N.H.L. games in the United States have been seen only on channels owned by NBCUniversal, like NBC, NBC Sports Network and USA. Comcast, NBCUniversal’s parent company, agreed in 2011 to pay the N.H.L. $1.9 billion for 10 years of rights.

But while the N.H.L. may have been happy with how NBC presented and promoted hockey, leagues generally prefer to have multiple media companies share television rights, especially with ESPN. Without the rights to games, ESPN’s channels and shows have rarely featured hockey since 2005.

“It’s only human nature that there would have been more of an intention on the properties that they had rights to than on us,” Gary Bettman, the N.H.L. commissioner, said at a news conference announcing the agreement.

While ESPN faces the challenge of transitioning its lucrative cable television programming to the streaming world as fewer and fewer customers pay for television packages, the agreement with the N.H.L. again demonstrates that it remains the giant of sports coverage. It also illustrates how sports media has changed since the last time the network showed N.H.L. games.

After the 2004-2005 N.H.L. lockout, ESPN refused to get into a bidding war and lost the rights to show the league’s games. The company had signed new rights agreements for N.B.A. games and Monday Night Football and thought that it would be overpaying to show a less popular sport and that it would be hard to find room on its channels for the games.

But now hockey is ideal for ESPN’s streaming ambitions. The marquee games and playoffs will be shown on traditional television, while ESPN+ and Hulu will have enough games to entice both avid and moderate hockey fans to subscribe. It is similar to ESPN’s deal with the U.F.C., which has most of its big fights on pay-per-view or ESPN television, but there are enough on ESPN+ to compel mixed martial arts fans to subscribe. Of the 1,312 regular-season N.H.L. games, more than 1,100 will be shown on ESPN, most via streaming.

“Streaming is really at the heart of this deal,” said Jimmy Pitaro, ESPN’s president. “ESPN+ will be a must-have for hockey fans.”

It is also potentially a better deal for hockey fans. NHL.TV, the out-of-market streaming package, has typically cost $150 annually. ESPN+ costs just $60 annually, and is also sold in bundles with Hulu and Disney+.

Though the N.H.L. will get more money than it did from NBCUniversal, its regular-season games will be less widely distributed.

This season 16 games will be shown on broadcast television, on NBC, and 84 or so games will be on NBCSN, a cable channel available in about 75 million homes. ESPN will also have exclusive rights to about 100 games, but while 25 of them will be widely distributed on either ABC or ESPN, 75 will be on Hulu and ESPN+. Hulu has 39.4 million total subscribers, and ESPN+ has 12. million.

With the rights to only half of the N.H.L. playoffs sold to ESPN, the league is still negotiating with other media companies over a second rights package. Bettman said he expected to focus on closing that deal over the next few weeks.

Whenever that agreement is reached, Bettman will have achieved something of a coup. During a pandemic that has caused big losses for all leagues, and for many media companies, he will have almost assuredly more than doubled what the N.H.L. was previously paid for its United States media rights.

Exactly how much ESPN is paying depends on how you look at the agreement. ESPN was already paying the N.H.L. almost $100 million annually for various rights, including showing more than 100 games on ESPN+ and highlights across its channels and digital platforms. From ESPN’s perspective, the new agreement merely adds around $300 million annually to what it was already paying. To the N.H.L., the two deals seem substantially different enough that the league considers ESPN to be paying around $400 million annually for a completely new agreement.

It is not yet known whether NBCUniversal will pay to retain some rights to the sport it has been perhaps most identified with for the past decade, or if other television companies like Fox or CBS will buy the rights.

It is expected that the N.F.L. will soon announce that NBCUniversal has retained the rights to show N.F.L. games on NBC on Sunday nights, at a hefty increase from the nearly $1 billion the company pays on average annually now. At an investor conference last week Brian Roberts, the chief executive of Comcast, foreshadowed that might make the company more hesitant to bid on other sports rights, like those of the N.H.L.

“We’re very excited about, hopefully, our relationship continuing with the N.F.L., that’s a big priority,” Roberts said. “But there will be, therefore, tough decisions where we have relationships that maybe won’t be continued. And that will be someone else’s good fortune perhaps.”

Like ESPN, NBCUniversal is transitioning to a more digital future. By the end of the year, it will shut down the NBC Sports Network — where most of its N.H.L. games were shown — in an attempt to bolster both USA and its Peacock streaming service. It recently paid around $1 billion to show professional wrestling on Peacock.

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