The Winter Classic is next on the chopping block.
Barring unexpected progress in the NHL’s labour talks this week, the league’s signature Jan. 1 event will follow the 326 regular-season games already wiped from the schedule. The formal cancellation is expected to be made by Friday, according to a source, just ahead of a deadline built into the NHL’s contract with the University of Michigan.
The deal struck with the school for the rental of Michigan Stadium last February included a “work stoppage cancellation” clause that allows the NHL to call off the game as late as Friday for a penalty of $100,000—an amount it has already paid as a deposit.
If a cancellation comes Nov. 3 or after, the league would also have to reimburse the university for any “out-of-pocket expenses reasonably occurred” in connection with the outdoor game.
This year’s Winter Classic between the Toronto Maple Leafs and Detroit Red Wings was billed as the biggest in the event’s six-year history. Organizers were expecting a crowd that would eclipse the world record of 104,173 who attended the “Big Chill” NCAA game at the University of Michigan in 2010 and an increased number of secondary events—including alumni, junior, college and American Hockey Leagues games—were slated for a second outdoor venue at Comerica Park in Detroit.
A source indicated that they wouldn’t be held if the Winter Classic was cancelled.
In addition to the contractual commitments to the University of Michigan, the NHL must be mindful of sponsors who have been left out in the cold during the lockout. Not only is the outdoor game an important event on their schedule, it’s one that requires a lot of planning.
“While the game may be Jan. 1, I knew that (a decision on the Winter Classic) was coming sooner than people thought,” sports marketer Brian Cooper said Monday. “Say you’re a bank and you’re going to bring down your top 150 wealth management clients and they’re going to block off New Year’s Day—you have to give that a lot of advance, especially if it’s New Year’s Day.”
Cooper, the president and CEO of S&E Sponsorship Group, represents a number of corporate clients who do business with the NHL.
He views the pending cancellation of the Winter Classic as a significant moment in the league’s ongoing labour dispute. The game at Michigan’s “Big House” was one he thought had a tremendous amount of potential because of the inclusion of the Maple Leafs, the first Canadian team to participate.
“This is the first year that it really affects Canada,” said Cooper. “There was going to be a lot of in-market (sponsorship) activations, there were going to be a lot of hosting opportunities, there were going to be consumer promotions. …
“This was a big date.”
The NHL and NHL Players’ Association have been locked in a stalemate since last meeting on Oct. 18. Both sides indicated Monday that there are no plans to resume negotiations on a new collective bargaining agreement.
The league has already cancelled all of its regular-season games through Nov. 30 and deputy commissioner Bill Daly estimated it will have lost US$720 million in revenue if they are never played.
Losing the Winter Classic would further add to that total. Cooper estimated this season’s event was poised to generate about $3 million in corporate sponsorships, not to mention revenue lost from ticket and merchandise sales that are unmatched on any other single day during the NHL season.
The NHL made a big splash when it announced details of the 2013 Winter Classic back in February, with Leafs and Red Wings alumni in attendance and commissioner Gary Bettman predicting the two Original Six rivals would take the event “to a new record-setting level.”
The league’s $3-million rental fee for Michigan Stadium was to be made in five payments, with the next $250,000 instalment due on Friday. It’s unlikely that money will ever change hands.
Speculation has surrounded the Winter Classic since the lockout began on Sept. 15 and the league has acknowledged publicly that a decision about the event needed to be made sooner than later.
“It takes a lot of time and it takes the commitment of a lot of money in order to put on the Winter Classic,” NHL commissioner Gary Bettman said earlier this month. “My understanding is at some point in the not-too-distant future we will have to commit many millions of dollars if we’re going to play the Winter Classic on Jan. 1. Obviously under these circumstances and all the uncertainty, we’re not going to commit the many millions of dollars if we don’t think we’re going to have a deal.
“And so the Winter Classic timeframe, in terms of making that decision, is probably rapidly approaching.”