The National Hockey League is passing the puck to Major League Baseball, whose Advanced Media unit will run hockey’s digital video businesses, league and team websites and the NHL Network cable channel.
The unusual big-league team up reflects the fast-changing media landscape and MLBAM’s status as a leader in the digital field. In addition to running online businesses for baseball, MLBAM handles the backend for streaming products including Watch ESPN, CBS’ March Madness On Demand, HBO Now and the WWE Network.
MLB commissioner Rob Manfred and NHL commissioner Gary Bettman were set to announce the deal Tuesday afternoon.
Financial terms of the deal were not disclosed, but a source familiar with the deal estimated it generates about $200 million for the NHL, including rights fees and a roughly 10% equity interest in a new company that would be formed if MLB spins off MLBAM’s third-party digital management business.
NHL chief operating officer John Collins says the NHL’s online business has been growing at a 20% pace annually for the past seven years, but with its contract with digital service provider Neulion (New York Islanders owner Charles Wang is chairman of NeuLion) expiring, the league decided to explore other options.
“We spent a lot of time thinking about the fans and how to better serve them, talking about the changing media landscape,” said Collins. The league also “looked internally at the capital, the expertise and the resources that are necessary to really continue to even keep pace with the innovation of technology.”
Collins said MLBAM was a good fit because it was used to dealing with a league structure. “They’re clearly an industry leader in building out these fan-friendly products so they can better connect fans with their passion. They’ve done it not just for baseball but with HBO and ESPN and WWE, the PGA Tour, so they have a pretty broad suite of clients,” he said.
The arrangement is also good for the NHL because “it lets us focus on what we’re good at, what we really should be focused on, which is developing content, whether it’s live games or highlights or new events, or programming that takes fans closer to the game,” Collins said.
Operations of the NHL Network will be moving from Toronto to Secaucus, N.J., where the MLB Network has studios.
While the future of the NHL Network as a one-sport linear channel in the U.S. might be unclear, the league sees big opportunities in distributing internationally.
The league will also be looking at combining its TV Center Ice product with its Game Center Live streaming product. Baseball has already merged its TV and streaming products.
MLBAM will be developing new apps for the NHL, some of them modeled on successful MLB products. Those apps are expected to come on line in January.