Mobile Production Execs Speak Out on Impact of NHL Lockout

It’s Day 52 of the NHL lockout, and arenas across North America remain dark.

While the league and the Players’ Association continue to battle over how to chop up a revenue pie that last year was upwards of $3.3 billion, those caught in the crossfire of the dispute — arena workers, team employees, local small-business owners — are feeling it the hardest.

The NHL has enacted a four-day workweek for its employees, accompanied by a 20% reduction in pay. Cutbacks are also occurring across the NHL’s 30 clubs. Like in St. Louis, where the Blues have laid off 20 employees and reduced salaries and cut hours for those who remained, according to the St. Louis Post-Dispatch.

“It is painful for NEP, and it’s painful for our competitors. If this work stoppage goes out for a significant amount of time, it’s going to really hurt a lot of people.” – Mike Werteen, NEP Broadcasting

To date, 327 games — approximately a quarter of the season dating through Nov. 30 — have been officially canceled. That also translates to 327 empty nights of sports television for national broadcasters and RSNs. For the mobile-sports-production business, the impact is being felt industry-wide.

“We are in a terrific industry, so long as a league does not lock out or strike,” says Phil Garvin, president/founder of Mobile TV Group. “That’s when the banks become concerned. When we have a lockout, the impact is enormous because it is not just one team; it’s the whole league. That is very unusual for an industry. There is no bright side to the situation.”

NBC, the NHL’s national broadcasting partner in the U.S., is feeling the programming pinch of losing live broadcasts of its highest-profile sport, especially following Friday’s announcement of the cancellation of the Winter Classic. The outdoor New Year’s Day game has been a ratings stud for NBC (3.74 million watched this year’s game) and is annually the most-watched hockey regular-season broadcast in the U.S. For now, NBC Sports Network is running replays of original programming and, in some cases, even movies in its primetime slots (you can watch The Natural on Nov. 12 at 8 p.m. ET).

NEP Broadcasting is the primary truck provider for NBC’s NHL coverage, and the loss of work is affecting even the mobile-production powerhouse.

“We do all their games in Philadelphia, Chicago, Boston, and a handful of other cities,” says NEP SVP of Sales Mike Werteen. “That is a significant amount of business. So, while it is not going to materially affect our business, it is going to affect our plans for growth. We want to be able to make sure that we are going to continue to work for quality engineers and utilize the trucks in a fashion that lives up to our responsibilities to our equity partners. So, when this kind of hiccup comes into play, all of that becomes a much more complicated discussion.”

Frustration is evident throughout the industry. Three of the country’s major sports leagues — the NFL, NBA, and NHL — have undergone work stoppages over the past two years, with two of them seeing a significant loss of games.

“Unfortunately, you are always going to have work stoppages; it’s just a downside of the business,” says Pat Sullivan, president of Game Creek Video, which handles all games on New York’s MSG Network, covering the Rangers, Islanders, Devils, and Sabres. “Both sides need to fully grasp the concept — like the NFL and MLB have — that, when there is long-term labor peace, the value of the franchises escalates and player salaries escalate and the television revenue escalates. That is not an opinion; that is a fact. You can go back and look at the NFL over the last 40 years, and you will see that, when there has been labor peace, there was rapid escalation in the value of the franchises and what players were paid. When there was labor unrest, both those numbers were flat, as well as television revenue.”

“Both sides need to fully grasp the concept that, when there is long-term labor peace, the value of the franchises escalates, and player salaries escalate, and television revenue escalates.” – Pat Sullivan, Game Creek Video

Even those companies that don’t have NHL clients feel the pinch as the loss of broadcasts ripples throughout television.

“We do some incremental sub shows and stuff like that,” says Scott West, president of Corplex, which has no standing NHL contracts. “So we are not deeply affected by the lockout. Having said that, there is obviously trickle-down business that may not be as available, as some of these NHL trucks are now out there looking for work.”

That trickle-down effect leads to a scramble to rebook trucks, a task that can be extremely challenging when most competitors are looking to do the same.

“We have discussions with our NHL clients about that regularly,” says Werteen. “It is not going to make anyone feel good to see trucks sitting dark when they should be out working. There is a plan that is in place that allows us to utilize those assets on other shows when they are not being used for the canceled NHL games. What it really comes down to is good open lines of communication with our clients. We make sure they know our plan to minimize any complications should the work stoppage come to a conclusion.

“The one thing to be mindful of,” he continues, “is that there are not a ton of shows out there that need [trucks at the last minute]. And, for the shows that do come up, every [vendor] is in the same situation that we are, so everybody is going after the same shows.”

Making it even tougher to rebook trucks and other resources is the uncertain nature of when the lockout may potentially end. Through the first two months, NHL Commissioner Gary Bettman has been canceling games in three- and four-week chunks. When trucks are booked months, sometimes years in advance, vendors’ hands are tied in analyzing the redistribution of resources.

“Not only do you have a risk of losing a huge percentage of your work, but you also can’t replace it until the league cancels the whole season, which they don’t do until halfway through the season,” says Garvin. “So you are sitting there not knowing whether your truck is booked or not two weeks out. And you can’t rebook your truck because you have to honor those original dates. The college football games in the fall were booked in July or August, and we couldn’t predict what the NHL was going to do at that point. So we don’t have a lot of alternatives. We might not have to sub a truck here or there for other events like we thought, but that’s about it.”

In Canada, where NHL is king, Dome Productions was hard hit. The company is the primary truck provider for both TSN and Rogers SportsNet.

“It is definitely having a financial impact [on us],” says Mary Ellen Carlyle, SVP/GM for Dome. “We’re now looking for other events. In terms of our owners, it’s actually a windfall, because they are rightsholders. So, overall on the whole mobile industry, it’s not very good. Where we would have rented trucks to facilitate our NHL, we’re not renting trucks anymore. We’re actually putting them all in our own trucks. So there’s definitely a financial impact on us.”

One positive note is that none of the production-truck executives that SVG spoke to said the lockout will result in staff layoffs or cutbacks.

“We are committed to our staff, and we have pledged once again that we will have no layoffs,” says Garvin. “We will not let a single individual go during a lockout. We did that last year [during the NBA lockout], and we will do it again this year.”

Negotiations between the league and the union were scheduled to resume in New York City today.

Jason Dachman contributed to this report.

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