Cord cutting will limit the rise of the Cap

[freester]

The television revenue accounts for approximately 50% of HRR. With many of the RSN going bankrupt as cord cutting expands, the NHL needs to monetize its streaming product better. ESPN is hurting financially and losing money on the NHL with its ESPN PLUS service. It would not surprise me if the salary cap didn’t   rise as much as hoped for 2024-25. 
     The NHL network is hardly available in streaming unless you have fubu. 

[Sabres Fan in NS]

HNIC will save the day.

 

[thewookie1]

Maybe it will slow it in 2 years but this upcoming year it jump up since it’s been kept low artificially 

[Randall Flagg]

There's no evidence that we would utilize a salary cap advantage if it was presented to us anyway

[Eleven]

2 hours ago, freester said:

The television revenue accounts for approximately 50% of HRR. With many of the RSN going bankrupt as cord cutting expands, the NHL needs to monetize its streaming product better. ESPN is hurting financially and losing money on the NHL with its ESPN PLUS service. It would not surprise me if the salary cap didn’t   rise as much as hoped for 2024-25. 
     The NHL network is hardly available in streaming unless you have fubu. 

Nah, I've been hearing about the cap rising dramatically "next year" for at least five years, so it's gotta be right around the corner.

2 hours ago, thewookie1 said:

Maybe it will slow it in 2 years but this upcoming year it jump up since it’s been kept low artificially 

Like this.

[tom webster]

Yes, franchise values are skyrocketing because business is so bad. It amazes me how people buy into the doom and gloom. The cap will be mid 90’s if not higher within five years. 

[French Collection]

7 hours ago, Randall Flagg said:

There's no evidence that we would utilize a salary cap advantage if it was presented to us anyway

That has been a pet peeve of mine for the last few years. Teams are giving away players with sweeteners as cap dumps but maybe those players don’t want to be in Buffalo in KA’s mind.

I know teams fear offer sheets because of retribution but KA could have had someone like Swayman for a reasonable amount. The tool is there for all to use. Most teams are tight to the cap every year, keep some powder dry and scoop some talent every year and set a new trend for how to put your team over the top. Teams will smarten up and see this as a potential strategy. If the teams don’t want offer sheets, get rid of them.

Another play is to help broker deals and get those precious picks/prospects that KA loves.

[GASabresIUFAN]

22 hours ago, freester said:

The television revenue accounts for approximately 50% of HRR. With many of the RSN going bankrupt as cord cutting expands, the NHL needs to monetize its streaming product better. ESPN is hurting financially and losing money on the NHL with its ESPN PLUS service. It would not surprise me if the salary cap didn’t   rise as much as hoped for 2024-25. 
     The NHL network is hardly available in streaming unless you have fubu. 

It's an interesting question.  How much will cord-cutting affect revenue?  Only time will tell, but I'm very interested to see how LV does with their deal to broadcast all LV games for free to their home market(s) and to profit by sharing ad revenue. https://www.ktnv.com/news/golden-knights/vegas-golden-knights-scripps-sports-announce-historic-broadcast-partnership

Edited August 7, 2023 by GASabresIUFAN

[Taro T]

On 8/6/2023 at 4:03 PM, freester said:

The television revenue accounts for approximately 50% of HRR. With many of the RSN going bankrupt as cord cutting expands, the NHL needs to monetize its streaming product better. ESPN is hurting financially and losing money on the NHL with its ESPN PLUS service. It would not surprise me if the salary cap didn’t   rise as much as hoped for 2024-25. 
     The NHL network is hardly available in streaming unless you have fubu. 

 

On 8/6/2023 at 4:29 PM, thewookie1 said:

Maybe it will slow it in 2 years but this upcoming year it jump up since it’s been kept low artificially 

It is an interesting Q but would be surprised if the cap doesn't go up significantly next year because of 3 items: 

1 - as stated above, the cap has been artificially reduced while the players paid the owners back the money they fronted in '20 and '21.  Getting the players back up to 50% of HRR should result in a fairly large jump even if one of the revenue streams does take a hit; 

2 - the biggest TV money is owed to the national TV contracts and them broadcasting the playoffs.  That doesn't get effected by the regional networks entering bankruptcy; and

3 - the teams should be able to find alternatives to the RSNs that are having difficulties by '24-'25 and if the money from the RSNs is flowing in again then it won't affect the leaguewide revenues very significantly.

But that could be a big part of why the salary cap didn't go up much at all this year.

[...]

Advertising rates will not change regardless of who is broadcasting the games. The games, in some manner, will be "broadcast". The problem right now is the league has been tied to a regional broadcasting paradigm and has been slow to respond to cord-cutting. Once the current contracts play out they should be able to revise the way they approach "broadcasting" to accommodate the emerging paradigm. 

[Drag0nDan]

12 minutes ago, ... said:

Advertising rates will not change regardless of who is broadcasting the games. The games, in some manner, will be "broadcast". The problem right now is the league has been tied to a regional broadcasting paradigm and has been slow to respond to cord-cutting. Once the current contracts play out they should be able to revise the way they approach "broadcasting" to accommodate the emerging paradigm. 

It'll just be subscription regional broadcasting if i had to guess.  I think 30/month is absurd for MSG+ though.  

For that much... can they fix the broadcast so the sound is in sync? 

[mjd1001]

2 minutes ago, Drag0nDan said:

It'll just be subscription regional broadcasting if i had to guess.  I think 30/month is absurd for MSG+ though.  

For that much... can they fix the broadcast so the sound is in sync? 

I don't like the $30 per month either.

BUT, during the season they are on average what, 10-15 games per month? That comes out to $2-$3 per game in most months. They probably think that is a fair price.

I think the 'take rate' on this will be pretty high eventually, probably will take a few months for people to accept it.  From my own personal point of view, all the 'young' adults in my life (age 20-30) will not do a full cost/benefit analysis on this versus just getting cable and what you get for that money. NONE of them have traditional cable and they just aren't going to get it, so this option is much more likely for them to take.

[Drag0nDan]

21 hours ago, mjd1001 said:

I don't like the $30 per month either.

BUT, during the season they are on average what, 10-15 games per month? That comes out to $2-$3 per game in most months. They probably think that is a fair price.

I think the 'take rate' on this will be pretty high eventually, probably will take a few months for people to accept it.  From my own personal point of view, all the 'young' adults in my life (age 20-30) will not do a full cost/benefit analysis on this versus just getting cable and what you get for that money. NONE of them have traditional cable and they just aren't going to get it, so this option is much more likely for them to take.

I suspect they'll partner with a streamer as some sort of add-on service as these local sports networks slowly go belly up.  ESPN+ is this much - add in a single team package for X more.  

[LTS]

On 8/8/2023 at 11:54 AM, Drag0nDan said:

It'll just be subscription regional broadcasting if i had to guess.  I think 30/month is absurd for MSG+ though.  

For that much... can they fix the broadcast so the sound is in sync? 

The sound sync issue, I believe, is caused by the main camera being delayed while the alternate angle cameras are live. I'm not sure if that's to accommodate out of town broadcasts that use announcers that are at home or what.  I don't believe its only MSG that has that issue.

On 8/8/2023 at 12:00 PM, mjd1001 said:

I don't like the $30 per month either.

BUT, during the season they are on average what, 10-15 games per month? That comes out to $2-$3 per game in most months. They probably think that is a fair price.

I think the 'take rate' on this will be pretty high eventually, probably will take a few months for people to accept it.  From my own personal point of view, all the 'young' adults in my life (age 20-30) will not do a full cost/benefit analysis on this versus just getting cable and what you get for that money. NONE of them have traditional cable and they just aren't going to get it, so this option is much more likely for them to take.

A full cost/benefit analysis.  Well, I am much older and I have done the cost benefit analysis.  When we spoke about Spectrum Choice where you could pick 15 cable channels as part of the package it gets really hard for some people to pick 15.  I would have that issue.  I haven't had a live TV service in my house since April and I have not missed it one bit.

Come October I will have MSG+.. because $30 per month is cheaper than $90 per month for Fubo which is what I had to have in the past to get MSG.  Well, that or Spectrum, but no thanks on Spectrum.

Sure I got ESPN on Fubo.. but not TNT, so I was missing those games as well.  My cost/benefit analysis says that paying $90 per month on the off-chance I am inclined to watch another station is not the best choice.

3 hours ago, Drag0nDan said:

I suspect they'll partner with a streamer as some sort of add-on service as these local sports networks slowly go belly up.  ESPN+ is this much - add in a single team package for X more.  

Max recently announced they have the ability to stream live events and it is suspected they will be in talks to carry sports programming in their packages.

ESPN+ is the best way to watch hockey, if you are not in market.  I wish I was not in market.

MSG+ will appeal to many many many NYC area residents simply because of all the teams that are covered.  I don't think they will suffer like the RSNs who are covering one to two sports over a wider area.

But the market will shift into a la carte first.. then the fluff stations (not those fluff stations Inkman) will fall by the way side.. and then it will cycle back into a conglomeration of streaming packages because people won't like a la carte pricing.

[Zamboni]

3 minutes ago, LTS said:

The sound sync issue, I believe, is caused by the main camera being delayed while the alternate angle cameras are live. I'm not sure if that's to accommodate out of town broadcasts that use announcers that are at home or what.  I don't believe its only MSG that has that issue.

A full cost/benefit analysis.  Well, I am much older and I have done the cost benefit analysis.  When we spoke about Spectrum Choice where you could pick 15 cable channels as part of the package it gets really hard for some people to pick 15.  I would have that issue.  I haven't had a live TV service in my house since April and I have not missed it one bit.

Come October I will have MSG+.. because $30 per month is cheaper than $90 per month for Fubo which is what I had to have in the past to get MSG.  Well, that or Spectrum, but no thanks on Spectrum.

Sure I got ESPN on Fubo.. but not TNT, so I was missing those games as well.  My cost/benefit analysis says that paying $90 per month on the off-chance I am inclined to watch another station is not the best choice.

Max recently announced they have the ability to stream live events and it is suspected they will be in talks to carry sports programming in their packages.

ESPN+ is the best way to watch hockey, if you are not in market.  I wish I was not in market.

MSG+ will appeal to many many many NYC area residents simply because of all the teams that are covered.  I don't think they will suffer like the RSNs who are covering one to two sports over a wider area.

But the market will shift into a la carte first.. then the fluff stations (not those fluff stations Inkman) will fall by the way side.. and then it will cycle back into a conglomeration of streaming packages because people won't like a la carte pricing.

Good analysis!

I would like to see À la cart pricing per channel. And just see how many people do in fact like it over the long term. 

Living in Western New York, I personally stream spectrum through Roku. so I just pay spectrum for Internet and a cable package through streaming. And I split the cost with a friend for Disney+. And a family member allows me to log into their Hulu account to watch any ESPN+ Sabres games if I need to. That is all I do. No Netflix, no Paramount+, no Max,  no Amazon prime. So I get all MSG Sabres games, and all regional TNT games. For me personally, if I couldn’t access any ESPN+ games anymore through my Family member, I would not pay the extra money to get Hulu and ESPN+. I would rather miss three or four Sabres games a season and not pay for Hulu and ESPN+. But that’s just me.

[mjd1001]

2 hours ago, LTS said:

 full cost/benefit analysis.  Well, I am much older and I have done the cost benefit analysis.  When we spoke about Spectrum Choice where you could pick 15 cable channels as part of the package it gets really hard for some people to pick 15.  I would have that issue.  I haven't had a live TV service in my house since April and I have not missed it one bit.

Spectrum choice does not give you an option to have MSG. If you want that they make you get the full package.

Unless something has changed since last year. But I know for 100% certainty as of last year. If you got spectrum choice, you cannot take MSG as one of your choices.

[Porous Five Hole]

I got lazy and didn’t read every post in this thread, but it’s time to accept that hockey is a regional sport and not one of the “big four.”
The NFL & NBA have national appeal. MLB might still have national appeal, but baseball is dying a slow death (kids are on their iPads and not the Diamond…and the attention spans of today are not cut out for the limited action that baseball provides).  
 

The NHL provides a captive and passionate audience in limited numbers compared to NFL & NBA. But it is still captive and passionate. There’s value in advertising to our group of fans and it might be more valuable than the general consumption of a national audience.  
I could be wrong, but I would rather advertise with a less expensive and more passionate sport and locality.

Long story short, the NHL will be fine without cable subscriptions…even if that’s their current revenue model. Not NFL or NBA revenue levels, but fine nonetheless.

 

 

 

 

 

[Marvin]

Does anyone know how the affected teams are getting ready to broadcast the upcoming season?

[LTS]

20 hours ago, mjd1001 said:

Spectrum choice does not give you an option to have MSG. If you want that they make you get the full package.

Unless something has changed since last year. But I know for 100% certainty as of last year. If you got spectrum choice, you cannot take MSG as one of your choices.

It's good to call out. I don't recall if I suggested Spectrum Choice for locals (Bills games) and then MSG+ for Sabres games in my original statement. It makes sense that RSNs are not included in the choice.  Sports channels are the most expensive channels to have in a package. Naturally because they have to pay licensing fees to the sports leagues who have to pay athletes insane amounts of money.

I'm not paying for Spectrum choice either.. not with an $18 broadcast surcharge.  The local antenna or the local bar is the way to go. 🙂

[mjd1001]

43 minutes ago, LTS said:

It's good to call out. I don't recall if I suggested Spectrum Choice for locals (Bills games) and then MSG+ for Sabres games in my original statement. It makes sense that RSNs are not included in the choice.  Sports channels are the most expensive channels to have in a package. Naturally because they have to pay licensing fees to the sports leagues who have to pay athletes insane amounts of money.

I'm not paying for Spectrum choice either.. not with an $18 broadcast surcharge.  The local antenna or the local bar is the way to go. 🙂

Maybe this is a story for another thread, but its close enough I figure i'd bring it up...

I talked extensively with a friend of mine who spends a LOT of time in Europe (he lived there in a few different nations for his job and travels there frequently) and he brings up to me that people from Europe are amazed at the cost of programming here in the USA.  The thing he brings up is....you pay for TV if there are no ads, but if they are going to show you advertisments, why are you paying so much on top of that?

Many European sports do not show ads during the broadcast at all. F1 races have few (if any) ad breaks. In some European leagues hockey and soccer may have few, or no ads.

I think he brought up Denmark...many local shows have no ads at all.  If you are watching an 'american' show, you might watch the entire show (22-23 minutes) and then they show ads in the 7 minutes straight that are left until the next show starts. France, Italy, and I think Germany he said have ads on some station, but far less than here.

Again, maybe you are getting lower quality programming, maybe not. But the big thing he hears alot is he doesn't understand why we pay so much for Cable TV and then sit through 10-15 minutes of ads for a product we pay for. We 'pay' for the 'right' to watch 20%-25% of our screen time with ads.

Edited August 10, 2023 by mjd1001