NHL

Winnipeg Free Press - PRINT EDITION

Sharks' TV deal really bites

So bad team just might be forced to leave San Jose for Santa Clara

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SAN JOSE, Calif. -- The San Jose Sharks are not preoccupied merely with hockey matters in this Summer of Shame.

Yes, the hockey team is the process of a fairly radical roster reboot following their humiliating playoff exit after taking a 3-0 lead over the Los Angeles Kings. That's all been outlined by Shark executives.

But beneath the surface, the franchise is fighting an even more important battle. That struggle is taking place in executive offices from here to the east coast.

Simply put, the Sharks' local television contract is not acceptable to them. They think it stinks. Stinks so bad, in fact, it could affect the team's long-term ability to stay in San Jose and the Bay Area.

This has nothing to do with the departure of popular television analyst Drew Remenda, which was made public Tuesday. That's unfortunate, but comparatively small potatoes.

How serious is the concern over the Sharks' television deal? I have learned and confirmed that National Hockey League commissioner Gary Bettman has taken the extraordinary step of personally intervening in the matter.

Bettman has contacted high-level honchos at Comcast corporate offices in Philadelphia to see if the Sharks' local television deal can be reworked. Comcast is the parent company of Comcast Sportsnet Bay Area, which broadcasts Shark games. So far, the Bettman talks have not been fruitful.

Here's the issue: The Sharks' local deal pales compared to most other NHL teams. The team is in the middle of a long-term contract with Comcast Sportsnet Bay Area that yields the Sharks $7 million per season. And it has 14 more seasons to run.

Meanwhile, according to Forbes' magazine and website, the Toronto Maple Leafs receive $41 million per season in local TV rights. Several other teams -- the Rangers, Canadiens, Red Wings -- bring in more than $30 million per season. The Los Angeles Kings and Anaheim Ducks have $20 million-plus-per-season deals, as do Dallas and New Jersey and the New York Islanders.

Needless to say, this puts the Sharks at a disadvantage. Do the math. Over the next five years alone, the Kings and Ducks will have a minimum of $65 million more than the Sharks to push payroll up to the salary cap limit and/or buy out contracts and/or turn a profit. The team says it isn't making one now.

Let me point out, of course, that the Sharks themselves negotiated this current terrible Comcast deal. Former franchise CEO Greg Jamison was the man who signed off on the deal in 2009, one year before he stepped away from the job. Chief executive John Tortora then came aboard last year, hired by owner Hasso Plattner. Not coincidentally, Tortora previously worked in the NHL office as vice-president of media.

Contacted to comment on the situation, Tortora chose to reply via email and said that Comcast has been "an excellent partner for the Sharks locally."

At the same time, Tortora confirmed that the Sharks are attempting to alter their agreement with the network.

"We have expressed some concerns over our TV deal directly with Comcast," Tortora said. "The deal, over time, has become substantially below the league average. Comcast has expressed a willingness to work with us in finding a creative solution that generates the appropriate value proposition for both sides."

In the most extreme version of the narrative, there is no creative solution and the Sharks continue to drain money. Plattner then tires of the red ink and decides to move the team outside the Bay Area market -- where he could negotiate a better TV deal and abandon his current one here.

Sounds extreme. And almost unthinkable. That is likely why Bettman became involved. Comcast is also the parent company of NBC, which holds the NHL national broadcast rights. The decision to award an outdoor game to the Bay Area next season, which will soon be announced at either AT&T Park (most likely) or Levis Stadium (still possible), could be a bone thrown out to Comcast in hopes of currying favour. Outdoor games generate large ratings and provide local networks an opportunity to leverage other promotional and sponsor events around the broadcast.

There's another elephant in the hockey rink, too. Sooner rather than later, the Sharks are also bound to seek out a new arena, with either a radical renovation of current SAP Center or a brand-new building.

The life span of most American arenas tends to be 25 or 30 years. The Shark Tank opened in 1993. San Jose is aware of that timeline and working on potential solutions as well as ongoing improvements -- Tuesday, the city council approved $1.3 million in repairs to the SAP Center, upgrading the air-conditioning and telecom equipment. But look slightly northward.

There are development interests in Santa Clara trying to generate enthusiasm for a massive entertainment/restaurant/retail complex adjoining the new 49ers stadium by incorporating a potential Shark arena into the mix.

Tortora's comment on that: "It's public knowledge of the various land development opportunities that exist around the new Levi's Stadium. We are aware of the opportunities and will certainly listen to offers. However, we are not pursuing them. Our primary focus on this issue is to continue to work with the City of San Jose in addressing the long-term capital needs of the SAP Center."

So we're back to those "creative solutions" with the TV deal. What might one be?

Maybe we should ask commissioner Bettman.

-- San Jose Mercury News

Republished from the Winnipeg Free Press print edition June 22, 2014 B6

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