Why the Sharks TV deal sucks and they might (could) move
Mercury News – How serious is the concern over the Sharks’ television deal? I have learned and confirmed that National Hockey League commissioner Gary Bettman has taken the extraordinary step of personally intervening in the matter. Bettman has contacted high-level honchos at Comcast corporate offices in Philadelphia to see if the Sharks’ local television deal can be reworked. Comcast is the parent company of Comcast Sportsnet Bay Area, which broadcasts Shark games. So far, the Bettman talks have not been fruitful.
Here’s the issue: The Sharks’ local deal pales compared to most other NHL teams. The team is in the middle of a long-term contract with Comcast Sportsnet Bay Area that yields the Sharks $7 million per season. And it has 14 more seasons to run.
Meanwhile, according to Forbes’ magazine and website, the Toronto Maple Leafs receive $41 million per season in local TV rights. Several other teams — the Rangers, Canadiens, Red Wings — bring in more than $30 million per season. The Los Angeles Kings and Anaheim Ducks have $20 million-plus-per-season deals, as do Dallas and New Jersey and the New York Islanders.
Needless to say, this puts the Sharks at a disadvantage. Do the math. Over the next five years alone, the Kings and Ducks will have a minimum of $65 million more than the Sharks to push payroll up to the salary cap limit and/or buy out contracts and/or turn a profit. The team says it isn’t making one now.
“We have expressed some concerns over our TV deal directly with Comcast,” Tortora said. “The deal, over time, has become substantially below the league average. Comcast has expressed a willingness to work with us in finding a creative solution that generates the appropriate value proposition for both sides.”
In the most extreme version of the narrative, there is no creative solution and the Sharks continue to drain money. Plattner then tires of the red ink and decides to move the team outside the Bay Area market — where he could negotiate a better TV deal and abandon his current one here.
Sounds extreme. And almost unthinkable. That is likely why Bettman became involved. Comcast is also the parent company of NBC, which holds the NHL national broadcast rights. The decision to award an outdoor game to the Bay Area next season, which will soon be announced at either AT&T Park (most likely) or Levis Stadium (still possible), could be a bone thrown out to Comcast in hopes of currying favor. Outdoor games generate large ratings and provide local networks an opportunity to leverage other promotional and sponsor events around the broadcast.
There’s another elephant in the hockey rink, too. Sooner rather than later, the Sharks are also bound to seek out a new arena, with either a radical renovation of current SAP Center or a brand-new building.
The life span of most American arenas tends to be 25 or 30 years. The Shark Tank opened in 1993. San Jose is aware of that timeline and working on potential solutions as well as ongoing improvements — Tuesday, the city council approved $1.3 million in repairs to the SAP Center, upgrading the air-conditioning and telecom equipment. But look slightly northward.
There are development interests in Santa Clara trying to generate enthusiasm for a massive entertainment/restaurant/retail complex adjoining the new 49ers stadium by incorporating a potential Shark arena into the mix.
So a lot of stuff to take in here about the Sharks, their arena, their arena deal as well as their TV deal. Let’s start with the Arena.
First off, even though it was built in 1993, the Shark Tank is starting to show it’s age. WiFi is horrible, they could probably put some more seats in the building, and the layout downstairs pretty horrible. That being said, how many more seats do you need to put in there? It already holds 17,000+ and a complete retrofit would need at least another 1.500 seats and better entrance/exit/restroom layout. That starts to get costly, but at the same the revenue that the city gets (as well as Caltrain) for people coming to the games is going to keep it from moving to Santa Clara. However, things in downtown San Jose that are supposed to happen sometimes don’t (see the A’s stadium and Santana Rowe).
The interesting aspect about Santa Clara, is that combined with 49ers stadium, it would offer compound similar to other cities like Foxboro for the Patriots, or Pittsburgh’s close proximity for Heinz/PNC Park, it creates an identity as a destination for people to go to. Hell throw in a casino nearby and you’ve got an Hardo Disney world. Granted, San Jose is one of the few reasons people from outside of San Jose go into San Jose and if you move them, they aren’t coming downtown for any real reason. I expect them to sit tight in San Jose because the city is going to have that team torn from the cold dead hands, but then again if they go into a heavy rebuild mode and start doing really poorly two or three years from now, who knows how city hall will feel. Actually, I still don’t think they’ll let them move, but they also won’t build them a stadium either.
Now, the TV deal is the Sharks are really getting hosed. The NHL season runs from Oct. 1st through till May to June for some teams. You’re giving the Sports fan an option during football, after football’s over and all the way into spring and continuing into the most exciting playoffs in sports. Not a bad product for a large (by population) fan base. Especially when you have a demo that has purchasing power. Detroit might have more hardcore fans, but from a sponsor standpoint, I’d rather the casual fan in San Jose see my programming than the guy with only enough to buy a sixes of Old Milwuakee for that buying power. In that case, the TV dollar should be more for San Jose. So let’s hope the Sharks and various entities figure it out, but it starts with show casing the the team in an outdoor game. Get on it, Gary.