What The NHL's New Digital Media Deal With MLB Means
By Bryan Altman--
(CBS Local) On the surface, admittedly, the headline "NHL And Major League Baseball Strike $1.2 Billion Digital Media Deal" looks really, really strange. But upon further review, the deal isn't only logical for the NHL but will become an important step forward for the brand when it comes to increasing its digital presence, especially as televised sports shift more and more drastically toward digital media content.
Let's take a look at some of the finer points of the deal and some of the reasons why the NHL and MLB are entering into this partnership.
The terms
Here are the official terms of the deal. From the Toronto Sun:
"The deal is worth $100 million US per year over six years for the NHL."
"The NHL will hold 7-10% equity in the new umbrella company, which translates into an estimated return of $300-500 million. That figure could end up being even higher depending on the worth of the stock."
"The agreement also saves the NHL an estimated $20 million per year, the annual figure it previously had been spending on the platforms that now will be under the umbrella of MLBAM."
Why now?
MLB Advanced Media, the digital arm of MLB, has been the unquestioned leader in the digital media space in the sports world and beyond for the last few years. Besides operating its own live game streaming service and operating 30 teams' websites, it also operates online streaming systems for ESPN and the WWE and was enlisted by HBO to help with its HBO GO streaming service last December.
Plus, the deal with MLB isn't the first time the NHL has contracted a third party to handle its online systems, as the league had previously been partnered with tech company NeuLion for the past seven years. The hope from the NHL's perspective is to not only turn to MLBAM for a more robust online presence but improved video streaming of their live games.
Basically, once you stop thinking about MLBAM as a product of a competing sports league and realize it simply has the best product available, it really makes a lot more sense.
When is this happening?
Jan. 1, 2016 is the official date that the agreement between the NHL and MLB begins.
What does it mean for the NHL?
Yahoo! Sports' NHL Blog "Puck Daddy" reported the following on how fans who subscribe to the NHL's current streaming products (NHL Game Center Live), along with their other web-based properties:
MLBAM will distribute live out-of-market games through CI (Center Ice) and GCL (Game Center Live) in the U.S. They will also take over control over all 30 team websites — the NHL and its teams will retain editorial control — and their mobile apps.
Another component of the deal has to do with the NHL Network, the NHL's subscription based television channel. The NHL will hand over control of the network to the MLB Network, according to Yahoo! Sports, and will relocate its studios to Secaucus, N.J., where the MLB's studio is located.
Big takeaway
At the end of the day, this deal is a win-win for both leagues. The NHL gets the opportunity to improve its standing in the online streaming game while also getting some equity in the new company that MLB will be creating to manage the NHL's digital services. Meanwhile, MLB and its Advanced Media arm continue to grow and prove that they're at the forefront of the live streaming game.
In a joint conference call on Tuesday, NHL commissioner Gary Bettman and MLB commissioner Rob Manfred spoke glowingly about the deal, and Bettman was sure to clear up any possible confusion regarding the unlikely alliance, stating that, ""We're not turning baseball into hockey, and (MLB) isn't turning hockey into baseball." Good to know.
Here were the statements from each commissioner, courtesy of NHL.com
"As the market leader, MLBAM is uniquely qualified to assist us in giving hockey fans a richer, more immersive experience with the game. MLBAM is also the right partner because they have the expertise to help us deliver new and exciting products to our fans, who crave compelling digital content. We couldn't have North America better covered than with the power of NBC, Rogers, TVA and MLBAM – an incredible convergence of technical, creative and production talent that is great news for our fans." -- Gary Bettman
"It is an honor for Major League Baseball to stand alongside the National Hockey League on this joint initiative. All of us in sports share a desire to distribute our games and tell our stories as widely and broadly as possible. Because of our own experiences in delivering baseball to its loyal fans, MLB Advanced Media is uniquely suited to excel in a partnership of this magnitude." -- Rob Manfred
