Shortly after the NHL’s annual board of governors meeting, commissioner Gary Bettman and league owners had reason to smile. Not only had they just approved Seattle as the league’s 32nd franchise, Forbes had just released its annual estimate of franchise values, giving Bettman and the owners nearly $5 billion more reasons to be happy.
In 2017, Forbes reported that the average NHL team was worth $594 million, 15 percent more than the previous year. In 2018, team values increased more than six percent to an average of $630 million. Not surprisingly, the Washington Capitals were the league leader in franchise-value growth, at 16 percent, following their Stanley Cup win last season.
The continued increase in franchise values was expected given league revenues are estimated to have grown to a record $4.88 billion in the 2017-18 season, bolstered by a significant increase in sponsorship revenues and a new revenue source, the Vegas Golden Knights. According to research done by ESP Properties, the NHL posted an estimated $559.5 million in sponsorship revenue, an increase of $54.5 million compared to 2016-17. That is an impressive growth rate of 10.8 percent, almost double the 5.9 percent increase from the previous two seasons.
Adidas, the NHL’s new jersey supplier, played a major role in that 10.8 percent growth, adding an estimated $70 million to the league’s sponsorship revenues. The Adidas partnership is estimated to be worth double the $35 million Reebok paid as the previous equipment sponsor for the right to supply team uniforms and licensed apparel.
Relative to growth metrics, the NHL stacks up quite well against the other three major North American major sports. Despite the fact it trails the NFL, MLB and NBA in overall revenues, the NHL has posted impressive numbers in other areas. The league is at or near the top of the sports entertainment industry in North America in revenue and total sponsorship growth.
Take growth in sponsorships. Thirteen years ago, the league reported it had partnered with 19 sponsors. That number increased to 40 by 2016-17. According to ProSports Sponsors ETF, that’s a phenomenal growth rate of 110 percent to lead all four major sports. As for revenue growth, the NHL’s numbers increased 95 percent during the same period, second only to the NFL.
Like all major professional sports, NHL revenue sources include ticket sales, broadcast rights, concessions, merchandise sales and corporate sponsorships. More so than the NFL, MLB and NBA, however, the financial health of the NHL is highly dependent upon game-related revenues. More than three-quarters (75.4 percent) of league revenues ($3.68 billion) last season are estimated to have come from ticket sales, concessions and merchandise. Broadcast rights deals with Rogers and NBC contribute $636 million annually to league revenues, while corporate sponsorships are estimated to add $559.5 million.
While the number of sponsors is considered a key metric for pro sports teams, how long these relationships last is the true litmus test of the strength of the partnership – and the NHL has a track record of maintaining its partners over several years. Its global sponsorships include Adidas (Reebok), which has been with the league for 15 years, and SAP, which is entering its fifth year as a technology partner. Long-term North American sponsors include Kraft Heinz (29 years), PepsiCo (12 years), Bridgestone (10 years), Honda (10 years), Molson MillerCoors (eight years) and credit card company Discover (eight years). Scotiabank (11 years) and Tim Hortons (eight years) are the NHL’s marquee Canadian sponsors.
It’s clear why sponsors choose the NHL as a business partner. They point to the unmatched passion and loyalty of fans for their favorite team, as well as the league, and the effective marketing platform this provides. The NHL is committed to generating exciting digital content, collecting statistical data for fans to analyze and offering unique content on its social media platforms to enhance the overall fan experience – making the league an important target for any company’s marketing and sponsorship team.
Bridgestone, for one, has a history of aligning its marketing efforts with sports because it provides an effective platform to connect with consumers and share their passion for the game. “The NHL is a great fit for Bridgestone,” said Amber Holm, vice-president of consumer and customer engagement. “Its fans are some of the most passionate and tech-savvy in all of sports, and the action is exciting and fast-paced from start to finish.”
The marketing team at Discover feels that hockey fans’ devotion to their favorite teams and their overall love for the sport provide an ideal platform for the company to offer its product and services to consumers. “The NHL has one of the most loyal and passionate fan bases in all of sports,” said Vijay Konduru, VP of digital brand strategy. “We see a very similar dedication when it comes to Discover and our card members. Being able to interact with and ultimately serve such a devoted audience fits what we try to do, not just from a marketing strategy but from a company-wide perspective.”
Like all companies in a competitive marketplace, sponsors are looking to differentiate themselves through their sponsorship partners. The NHL provides that opportunity for companies like Scotiabank, which boasts that it’s the “Official Bank of the NHL.” Discover claims it is the “Official Credit Card and Payment Service of the NHL,” while Bridgestone gains marketing traction by advertising itself as the “Official Tire of the NHL.”
The popularity of hockey in Canada, the rich 100-plus-year history of the NHL, and the growth of the game in the U.S. all make the league an attractive partner. “Hockey is in our DNA,” said Jacquie Ryan, Scotiabank’s VP of sponsorship marketing and global philanthropy. “We are associated with hockey as a corporation because it matters to all of us.”
It also makes good business sense. Ryan pointed to the fact that more than 17 million Canadians watch and engage in the sport as players, coaches, volunteers and fans. Hockey at both the professional and amateur levels provides what she believes is “the most efficient sponsorship platform in Canada because of its penetration nationally.”
Global technology leader SAP recognized an opportunity to partner with the NHL four years ago to solve the league’s technology needs. It, too, wanted to leverage what it calls the “reach and popularity” of the league. “We do these things because we want to associate with great brands and show the strength of SAP’s technology solutions,” said Dan Fleetwood, VP of global partnerships. “The NHL had fundamental business needs and challenges that we worked with them on. It was the genesis of discussions with them.”
Hockey is in our DNA. We are associated with hockey as a corporation because it matters to
all of us – Jacquie Ryan
One of the ways the NHL allows sponsors to engage as a partner on many different levels is through the league’s widespread use of marquee events, which make the relationship about more than just signage and game-day commercials. Bridgestone has effectively leveraged the popularity of the outdoor games that are a favorite event for fans. The 2019 New Year’s Day game at Notre Dame Stadium in South Bend, Ind., will be the 10th year the company has been the title sponsor of the Bridgestone NHL Winter Classic.
In 2017 and 2018, SAP used its global reach to act as a title and presenting sponsor for the NHL Global Series and the China Games. It also became the first global company to have its logo advertised on an NHL sponsored jersey, when the league approached SAP to participate in the 2016 World Cup of Hockey as the official sponsor for all teams’ home and away jerseys. It was truly a coup for SAP, as corporate advertising had never before been permitted on an official NHL jersey.
Other marquee events that attract significant sponsorship engagement include the Honda NHL All-Star Weekend, Coors Light NHL Stadium Series, the NHL Awards and the NHL draft. In Canada, specifically, regular weekly events that attract strong sponsorship support are Rogers Hometown Hockey on Sundays and Scotiabank Wednesday Night Hockey.
A common underlying theme among sponsors is the importance of storytelling. In today’s world of professional sports, players, teams and sponsors want to collaborate with fans, and fans want to share stories with friends and family. Digital and social media, as well as the emergence of “second screen” mobile devices, make these platforms attractive to sponsors so that they can share stories with existing and potential new customers. “(The NHL) provides a platform for the company to tell their brand story of the ‘Clutch Performance’ of Bridgestone Tires,” Holm said. “Our tires perform best in the most important moments – just like the world’s greatest hockey players. You can’t get any more ‘clutch’ than a momentum-changing goal or a big save when the game is on the line.”
In 2015, the NHL hired SAP to digitize 100 years of statistics – no small feat considering 70 of the 100 years of data were recorded on paper scoresheets. As a result of its investment, the league is now able to offer fans a rich statistics section on NHL.com and is using the statistical data to provide a platform for fans to further engage in storytelling. “The result of that process is that fans are now able to compare a Gordie Howe with a Wayne Gretzky and a Sidney Crosby,” Fleetwood said. “Hockey fans pore over statistics more than any other sport, even giving baseball fans a run for their money.”
As a result, the league has enjoyed a 25-percent increase in new visitors to its website and a 200 percent increase in the time spent on the site. According to Chris Foster, the NHL’s director of digital business development, the SAP platform is engaging fans in new ways. “It is delivering interactive stats to hungry fans,” he said, “and personalizing the fan experience.”
Finally, the NHL’s commitment to community involvement and corporate social responsibility is important to fans and sponsors. Corporations want to align themselves with organizations their customers will admire and respect. The NHL, in partnership with its key long-term sponsors, makes it a priority to give back to the community. Events include Kraft Hockeyville Canada and USA, Scotiabank Hockey Day in Canada, Hockey Day in America, Hockey Fights Cancer, NHL Green and Hockey is for Everyone.
As a sponsorship partner, Scotiabank’s commitment to minor hockey is unmatched. Its Community Hockey Sponsorship Program has now supported more than one million young Canadians at the grassroots level. “Hockey is core to the Scotiabank culture and to Canadians,” Ryan said. “We believe young people are the key to Canada’s economic future and prosperity, so this partnership is very important to Scotiabank.”
That converts to more business for Scotiabank. “Our brand equity is twice as high when consumers associate us with our hockey program,” Ryan said, “and three times more likely to consider us for products and services when they are aware of our hockey sponsorship.”
As revenues increase substantially, year over year, and with the NHL set to cash in on another whopping expansion fee, sponsors will have even more reasons to remain onboard and cash in on the NHL’s passionate and loyal fan base.
SPOTLIGHT: JACQUIE RYAN
Jacquie Ryan apologizes. If she sounds tired, she says, it’s because her 11-year-old daughter’s game went late last night. Ryan is a hockey mom and true diehard. That fuels her innovation and influence as Scotiabank’s vice-president of sponsorship and philanthropy. Since taking the post in 2012, Ryan has strived to make Scotiabank “the bank of hockey.” Scotiabank sponsors more than 8,000 community teams and grows the women’s game with events such as Girls HockeyFest. It also spent $800 million on naming rights to change Toronto’s Air Canada Centre to Scotiabank Arena in 2018. As Ryan explains, customers aware of the hockey connection are 3.5 times likelier to choose Scotiabank in the future. “Scotiabankers are fans, they’re players, they’re coaches, they’re volunteers, and so are our customers,” she said. “Hockey from a business perspective just makes a whole lot of sense in Canada because so many Canadians have an affinity for hockey.” – Matt Larkin
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