If the state of RSNs were a geopolitical case study, it would likely be akin to the collapse of the Soviet Union in the early 1990s, with each satellite state having to determine its own future. So whether it’s the NHL, MLB or NBA (see my talk last week with the Pelicans), it’s different strokes for different folks.
In attempting to understand what worked for one NHL team in a unique spot, I connected with Jeff Webster, chief commercial officer with the Kraken, whose club — in only its fifth season — made the decision two years ago to depart the Root Sports RSN in favor of a strategy that no other team has in the U.S.
Unleashing the Kraken over the air
Seattle didn’t have the pro hockey history of other major markets, so getting local viewers interested in the sport was among the early challenges.
“We were teaching people about icing and the blue line as much as we were teaching them about a rivalry with the Canucks or other teams in the league,” Webster said. “Having the opportunity for the people, who weren’t able in the early days to come see it in person, to watch it on TV was becoming increasingly difficult with the fracturing of traditional cable subscriptions and where our RSNs were available or where they weren’t.”
That led to the creation of the Kraken Hockey Network, a mix of over-the-air and streaming distribution of games. For linear TV, TEGNA jumped on board as a partner, putting games primarily on its KONG affiliate in the Seattle-Tacoma market (with some KING simulcasts).
“It’s been such a huge blessing,” Webster said. “So much of what we had hoped would happen has come to pass.”
TEGNA must have felt the same way, as the two sides renewed last month. The Kraken’s territory now extends throughout Washington, Oregon, Idaho, Montana and Alaska with TEGNA affiliates and other local deals the company has cut.
Nick Cartan, the head of Playfly Media, praised the team for expanding its footprint. “It’s smart to increase their distribution in that market, especially in the absence of an NBA team right now, for this time of year,” he said.
Leveraging a local icon
For streaming, the Kraken went a route no other NHL team has gone — putting games on Prime Video. Amazon is no stranger to the club, as it has naming rights to the team’s venue (Climate Pledge Arena), and Amazon President and CEO Andy Jassy is an investor in the team. For any TEGNA games shown locally, Amazon Prime subscribers in the team’s territory have the ability to stream them.
“From a credibility standpoint for people here in the Pacific Northwest, if they see their team on Prime, it can sort of elevate the brand to a degree,” Webster said.
Webster noted TEGNA sells the primary portion of the TV ad inventory, and the team retains some as well. TEGNA will sell local spots, with Playfly selling national ads. Those commercials then get pulled through for the simulcasts on Prime Video. For measurement purposes, local viewership figures — the public ones, at least — are just for the OTA broadcasts. Any Prime Video audience numbers are additive, but those are generally seen just internally.
Can this Amazon model be used by other teams? “I don’t think that it’s a repeatable model,” noted Cartan. “It’s very backyard. ... And it makes total sense. I think it’s very cool.”
But with the NBA likely headed back to Seattle, and with Kraken owner Samantha Holloway likely leading the charge in acquiring a team, could there be more in-market Amazon opportunities in the future?
“We’re ambitious about what the future of our company here could entail, but we’re not at the stage to be talking about the NBA just yet,” Webster said. “We’re excited about the future, and certainly Amazon, with them stepping into a formal arrangement with the NBA on broadcast rights this season, poses an awesome opportunity for us to learn from them about that landscape if that opportunity ever arises.”
Coexisting with NHL plans?
Much like the NBA and MLB, a national package of local rights likely makes sense for the NHL, but there are no plans in place. However, Webster praised the league for its communication with clubs on the local distribution issues, particularly as they all are trying to figure out a new landscape.
“They have a group at the league that is dedicated to the national broadcast deals and partnerships, and that group supports hugely the local teams in helping us to see the future and helping us to make the best business decisions — not only for our team, but also in conjunction with what the strategy would be for the league as a whole,” Webster said. “They’ve been hugely supportive and major advocates of helping to guide our direction.”
But, as Cartan notes, focusing solely on a national package of local rights could be a slippery slope.
“If you look at national advertisers, brands that are capable of spending across a national platform, you’re talking under 3,000 brands probably,” Cartan said. “When you look at local and regional advertisers, this is the only way that those local and regional advertisers get to communicate with a highly engaged, repeatable, night-to-night community. There are 60,000 advertisers that are interested in that.
“These folks aren’t buying a single-feed network — NBA, NHL, MLB — across the national broadcasters. And so the pool of advertising dollars is tremendous. And I would say 60% to 70%, based on the market of total revenue going in, are coming from regional advertisers, local advertisers — not 50-state national network buyers. And so, if you’re a team, reducing the pool of possible advertisers is a dangerous thing to do.”
