NHL final - EXECUTIVE SUMMARY The National Hockey League...

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EXECUTIVE SUMMARY The National Hockey League (NHL) was a not-for-profit entity established by the 26 teams to govern the league. Its offices are responsible for league operations, broadcasting, television and team services, corporate communications, public relations and special events. National Hockey League Enterprise (NHLE) is for profit marketing division of the league. Currently, the sources of revenue for NHL come from gate receipts, media, stadium related revenues, licensing, and merchandising. The major expense for the clubs is the rising player salaries. Despite achieving the exclusive network television contract in US – FOX Sports for the first time in 20 years, and re-negotiated integrated coverage agreement with ESPN, the NHL still need work hard to reach a critical mass as defined by the sports networks by attracting aggregate high “quality” viewership. The player’s salary rise has significantly raised team’s costs, and has driven one third of NHL teams unprofitable, and another third barely profitable. In U.S., hockey is a misunderstood game that often is associated with negative stereotypes and is tagged as a regional sport, making it hard to compete with other professional sports. Much of the underexposure is deeply rooted in cultural differences. The senior managers of the NHL had to make decisions pertaining to the growth of fan base and promoting the entire hockey entertainment package, but they had different opinions on how to achieve these. The two choices under consideration are network advertising and grassroots marketing. In summer of 1995, the NHL conducted market research study to benchmark current fan support and guide future decision making. Through analysis, we believe that with the right exposure and support, hockey can grow its fan base phenomenally and creating value for NHL’s marking partners, owners, fans and players. ASSESSMENT OF CURRENT SITUATION PEST analysis Political: As the league expanded its national coverage, it came into conflict with local market agreement and conditions. For example, the NHL struggled against the constraints of local cable stations that require ESPN to black out games broadcast from their area. Economical: There is public speculation on a shift from hockey’s heartland cities to fresh new markets in pursuit of broaden viewership and reduce direct competition against the other professional sports. Social: During 1990s, new teams constantly emerged, and rather than selling hockey as a sport, they positioned it as family entertainment experience. The Pyramid Model indicated that the fast growth in street-
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hockey participation creates interest in in-line skating and roller hockey, which help create hockey awareness and general understanding of the game through participation. Technological
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This note was uploaded on 03/11/2010 for the course ECON 353 taught by Professor Kramer during the Spring '10 term at The University of British Columbia.

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NHL final - EXECUTIVE SUMMARY The National Hockey League...

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