Monday, December 22, 2008

McDonald's, the Economy, and the NHL

Terry Lefton of Sports Business Journal reports that McDonald's has extended its NHL Sponsorship to all 30 of the NHL teams.
The NHL has added McDonald’s to its roster of corporate sponsors with U.S. rights. The pre-eminent quick-service restaurant has signed a deal through the 2009-10 season. McDonald’s has been a Canadian sponsor of the league since 1993 and has local rights deals with 15 NHL teams, including one in its final stages with the Chicago Blackhawks.
A big catalyst for this has been the Winter Classic, as Lefton also reports that sponsorship sales for the 2009 Classic are up 40 % from last years inagural matchup. Lefton lets us in on some details that McDonald's gets out of the deal here:
Under the deal, McDonald’s gets ads on and the NHL Network and makes advertising commitments to NHL rights holders NBC and Versus. The deal also includes USA Hockey rights, which fit nicely with McDonald’s TOP Olympic deal. NHL Players’ Association rights for the U.S. were not included.

At the upcoming Winter Classic outdoor game, McDonald’s gets exclusive branding behind the player benches and penalty boxes in the NBC telecast. At the NHL All-Star Game, the QSR will sponsor the accuracy competition within the Honda-titled skills competition.

This is a big step in the right direction for the NHL. Lefton also says that the NHL has been trying to get its big Canadian partners to extend their rights to the U.S, as McDonald's did here. Maybe they are the first of many in a series of dominoes.

Moving on...

Also out of the Sports Business Journal today, Tripp Mickle shows how the NHL is defying the current Economic conditions:
The NHL projects a 2 percent increase in league revenue for the 2008-09 season despite facing one of the worst economic crises to hit North America since the league contracted from 10 to six franchises around the time of the Great Depression

League officials shared the projection with owners and team executives at a board of governors meeting in Florida Dec. 8-9. According to attendees, league revenue will increase 6 percent in aggregate, but because of the decline in the Canadian dollar the league will realize only a 2 percent increase in total revenue.

The projected 6 percent increase is down slightly from the 7 percent increase league officials told the board to expect before the start of the season. After accounting for the Canadian dollar’s decline, league revenue is projected to rise to $2.65 billion during the 2008-09 season from $2.6 billion in 2007-08.

Wow. Great stuff. Lets hope it holds. The effect of all this? Well the Salary Cap will remain about the same, Deputy Commisionner Bill Daly said that he "doesn’t expect the salary cap to increase or decrease by more than $1 million or $2 million, adding, 'I don’t think the cap will change much if at all.' - Awesome.

One more thing to come out of the Board of Govenors meeting, as they authorized the NHL to begin exploring "strategic sourcing"...
At the same meeting, the board of governors authorized the league to begin exploring “strategic sourcing” by finding preferred service providers like hotels or charter plane companies that will offer discounted prices to all 30 of the NHL clubs. The system would work similar to an HMO, allowing teams to save money by using companies from which the league gets preferred rates.
A solid day for the NHL. Let's hope for sellouts all around.

More later.

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