February 24, 2014

Sochi Last Olympics For NHL?

There has been lots of speculation that the National Hockey League will pull the plug on allowing it's players to participate in the Olympics after 2014.

In fact, it is not even speculation - the writing is definitely on the wall. The NHL is now a $4 billion dollar industry that shuts down for two weeks, loans out its key assets and makes not even a single buck in immediate return. Throw in the fact that the soonest the Olympics may return to North America is 2026, you can't blame the NHL and the NHLPA for looking for better options.

The better option has been discussed at length by the NHL and the NHLPA and that is the return of the World Cup of Hockey. For all it's mismanaged history, the World Cup offers immediate revenue that the Olympics do not. The NHL can reap the television money, the ticket sales and the sponsorship money all to themselves.

But where you can blame the NHL is in lack of seeing the bigger picture. And ultimately the bigger picture means far more money than the World Cup can provide.

Ken Campbell of The Hockey News had some interesting numbers in THN's Olympic preview magazine.
  • Olympic hockey at the Vancouver 2010 Olympics had audiences of 1.5 million viewers in Brazil and 1.6 million in Australia.
  • Canadian television committed 102 hours of hockey coverage in 2010. Italy committed 251.
  • More people around the globe watched Olympic hockey in 2010 than the Super Bowl or UEFA Champions League.
The World Cup will be a nice tournament for hard core hockey fans in North America and in traditional markets in Europe. It will never capture global attention like the Olympics have. The NHL would rather try to milk the same fans of their money rather than tapping into hundreds of millions of new fans in Brazil or Australia or Italy. Surely they can figure out a way of getting t-shirts and jerseys in stores in Melbourne or Venice, could they not? It would take one heck of a die-hard hockey fan in Brazil to even know a World Cup of Hockey game is being played.

Over time winning over new fans worldwide at the Olympics will bring the league so many more riches than going after the short term but sure dollars at the World Cup. It's an easy decision, except for one fact.

Most of the NHL's owners are not interested in the league's fortunes 10+ years from now. Many owners look to flip their investment by then. In fact, by the time the Olympics possibly return to North America in 2026, most of today's owners will have moved on. They want to reap in whatever cash they can now, and then sell their holdings presumably at significantly improved valuation.

Likewise, the NHLPA and by extension the players themselves really aren't that worried about the bigger picture either. As much as the players love participating in the Olympics, they realistically are only interested in financial security of their own generation. That means take the sure thing now - the World Cup - and include it's revenues in the salary cap formula in the immediate future. More quick, sure money means a higher salary cap and bigger contracts now.

It may be highly possible that the Sochi Olympics will be the last featuring NHL players. That would be a huge loss for hockey fans all around the world, whether they are watching from Regina or Rio de Janeiro. 

It would also be a loss for the International Olympic Committee. Losing NHL players in the Winter Olympics' most valuable property would be a huge blow, with loss of sponsorships, ratings and television contract dollars to match. Perhaps the IOC will bend their rigid stranglehold and allow businesses like the NHL and NBA and soccer bodies around the world to share the pie so that everyone can win?

Don't count on it. The IOC lacks the same foresight the NHL does.

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