Sunday, June 22, 2008

An Empty Threat

One story I failed to comment on during the Hall of Fame inductions and the entry draft is the ongoing fight between the New York Rangers and the NHL. Last September, the New York Rangers sued the NHL over marketing. The New York Rangers are fighting for control of their website - which now sends you to and the NHL wants control over all websites. This is a dispute over how internet related revenues are to be handled. The NHL wants to control them to increase their bottomline and the Rangers want them to themselves because if they are not subject to revenue sharing (etc.) it will increase the Rangers bottomline. We have a battle where what is good for the entire NHL holds back the individual members. There is less incentive for the New York Rangers to be creative in building new revenue streams if they lose significant portions of that money in the form of revenue sharing.

The courts ruled in favor of the NHL but the fight continues. The New York Rangers are still trying to fight for their individually controlled website. The NHL is now fighting back. The NHL has filed court papers claiming the New York Rangers have violated their contract with the NHL by publically challenging league rules. This might allow them to suspend the ownership of the New York Rangers or even boot them out of the league.

The New York Rangers are owned by Madison Square Gardens, which is owned by Cablevision Inc and largely by the Dolan family. Booting them out of the NHL would be a bad move for the league. The New York Rangers are the top American team in ticket revenue and this would be threatened by such a move. If Madison Square Gardens own the Rangers, it would be hard for them to find a suitable arena to play in, if they were booted out of MSG. Perhaps they could share the Nassau Coliseum with the New York Islanders temporarily, but that would not be a positive thing. A big reason the Rangers do as well as they do is that they play in a famous arena in the population center of Manhattan. If they were forced to move elsewhere, many of their fans might not follow. It would go a long way to killing the fanbase.

The NHL does not want that to happen. They have enough trouble finding owners in places like Nashville and don't want to create problems in what should be strong markets like New York City. However, they do want to strongarm the Rangers to make them comply with NHL wishes and are willing to make bold threats that they cannot afford to follow through with to see that happen.

Here is TSN's story on the developments.

Comments: Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?