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NHL hockey is back, and it’s TV-only game is sport’s biggest Covid challenge

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NHL hockey is back, and it’s TV-only game is sport’s biggest Covid challenge

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EDMONTON, ALBERTA – JULY 29: Bo Horvat #53 of the Vancouver Canucks and Mark Scheifele #55 of the Winnipeg Jets compete for a faceoff during the second period in an exhibition game prior to the 2020 NHL Stanley Cup Playoffs at Rogers Place on July 29, 2020 in Edmonton, Alberta. (Photo by Jeff Vinnick/Getty Images)

Jeff Vinnick | Getty Images Sport | Getty Images

While the NHL boasts a thrilling live experience, it has faced a continual dilemma with its television product – hockey isn’t designed for the small screen. Advancements in technology, such as high definition, have helped, but issues persist. The puck is small and can be tough to follow. Substitutions are fluid and hard to track. Without a common understanding of the rules, the game action can be overwhelming. Now, the puck is about to drop again, but in a world where the televised sports experience is the only one available to fans. 

The NHL returns for its postseason Saturday after the coronavirus shutdown that began in March cancelled the rest of the regular season. As all pro sports are reduced to a screen experience, hockey’s challenge may be greatest. Qualifying rounds for an expanded set of postseason teams will be held in two hub city arenas with no fans in attendance: Toronto and Edmonton, with the latter hosting the conference finals and Stanley Cup Final.

The NHL has always struggled to win over new TV viewers beyond hardcore hockey fans due to difficulty following the puck and players on a television screen. Past attempts to use on-screen technology to improve the viewer experience have failed, but the Covid-19 world has made it more important than ever before for the NHL to get the tech right.

Year after year, other sports consistently draw more viewers to their TV broadcasts. In 2019, the NBA Finals and World Series each drew more than 13 million viewers, while the Stanley Cup Finals only managed three million, according to Statista.

“I don’t think it’s any secret that the nature of our game makes it more difficult to televise it than maybe some of the other sports,” said NHL Deputy Commissioner Bill Daly.

With the help of sports tech firm SMT, the NHL may have a solution – puck and player tracking — a new technology offering the league the ability to collect a plethora of data points and provide more accurate stats. It also creates opportunities to enhance the presentation of TV broadcasts using augmented reality — using computer-generated images to supplement a person’s real-world experience.

This innovation brings many new features to the game from puck trails and player identification graphics to real-time data visualizations. Imagine Sidney Crosby streaking down the ice chasing a digitally enhanced puck with a trail, trying to create a scoring opportunity. As he gains momentum, a graphic of his speed appears above his head. Once Crosby reaches the puck, a gray circle appears beneath his skates, marking possession, while a visualization on-screen shows he’s not offsides.

“Some of these technologies can make that easier on the fans of following who’s playing, who’s doing what, where the puck is,” said Alex Evans, a managing director at L.E.K. Consulting with more than 20 years of media experience.

The NHL has tested puck and player tracking’s AR capabilities in past NHL events such as the last two All-Star Games and initially intended to roll out this technology for the 2020 Stanley Cup Playoffs. Those plans went on hiatus after the NHL paused its season due to the Covid-19 pandemic. Though, the league told CNBC it is “considering the use of the technology in the conference finals and Stanley Cup Final.”

This isn’t the first time the NHL has experimented with augmented reality. Fox, the league’s broadcast partner in the mid-1990s, employed a system called FoxTrax that generated on-screen graphics to help visualize the puck better. While the technology was “cutting-edge,” as Daly says, it drew mixed reviews because of its glitchy and inaccurate performance. Plus, it didn’t track any new data.

“You don’t want it to be like [the early version of the puck tracker],” Evans said. “It might just be annoying and take away from the games.”

EDMONTON, ALBERTA – JULY 30: The Nashville Predators and the Dallas Stars skate in warm-ups prior to against the Nashville Predators exhibition game before the 2020 NHL Stanley Cup Playoffs at Rogers Place on July 30, 2020 in Edmonton, Alberta, Canada. (Photo by Jeff Vinnick/Getty Images)

Jeff Vinnick | Getty Images Sport | Getty Images

It’s not as if the NHL opted to stop developing the technology; they just switched broadcast partners. More than 20 years later, Daly says, the technology is “light years better.”

“It’s always positive whenever you can have new technology that can help illustrate the greatness of the sport and the greatness of the players,” said NHL on NBC hockey analyst Pierre McGuire.

The NHL didn’t return an additional request for comment about whether puck and player tracking would be a component of the league’s main broadcast or an alternate feed, similar to MLB’s Statcast or ESPN’s College Football Megacast.

Highlighting the greatness of its stars is a way for the NHL to sell its product to new viewers. Although, Evans says it’s unlikely. Since the 2011-12 season, NBC’s NHL regular-season ratings (TV + Streaming) have fluctuated, peaking as high as 590,000 in 2012-13 and as low as 417,000 in 2017-18, according to NBC and Sports Business Journal.

“The reality check is [that] player tracking and puck tracking technology probably aren’t going to bring throngs of new viewers just by themselves,” Evans said.

Legalized gambling is lure in getting sports back up

These improvements could lure those on the margin and keep them watching longer, opening up a wave of new avenues for viewer engagement. The many new stats available pairs well with the wave of legalized sports gambling – the possibilities for new proposition bets are endless. Discussing the subject, Evans immediately thought of consumers being able to bet on the top speed a skater could reach in a game. And that’s where Evans sees the broadest industry-wide implications because, with wagering, there’s an immediate path to monetization.

Daly says it’s too early to see how the business of providing these new data points to gaming companies would play out, but it’s a way the technology can offer more assets to their business. However, ESPN reported last September that the NHL has already cut “data exclusivity” deals with MGM Grand, FanDuel and William Hill. According to FanDuel, NHL gambling has grown by 136 percent from March 2019 to March 2020 (FanDuel noted they were not in Iowa or Indiana last year, and Pennsylvania did not offer online service). DraftKings declined to provide data but did comment on the subject.

“The impact of technology on sports is both constant and considerable, and the NHL’s new puck and player tracking enhancements unlock a new layer of opportunity for the legalized betting market as well,” said DraftKings North America President & Co-Founder Matt Kalish. “These kinds of innovations showcase the NHL’s willingness to embrace a new era of fan experience, which, coupled with the league’s continued advocacy for sports betting, gives us great hope for the future of the fan.”

The combination of all this new data, broadcast enhancements and wagering opportunities create a comprehensive second screen experience for viewers, which is a vital way younger audiences consume live sports today. While Daly says the NHL isn’t trying to skew younger, instead attempting to strike a balance between all of the league’s demographics, younger fans are more appealing to advertisers.

With more advertising allure, the NHL can gain leverage on renegotiating its expiring broadcast deal with NBC in 2022, which seems even more critical given the near-term revenue shortfall caused by the pandemic. Statista estimates each team will lose $1.31 million in ticket sales alone for each home game canceled by coronavirus. Outside of Covid-19, the overall health of the league remains encouraging, with a 6 percent rise in the average value of a franchise to $667 million in 2019, according to Forbes.

“It’s more assets,” Daly said. “I think this technology allows us to bring [more] to the table in terms of what we have to offer with our media rights package.”

There are other obstacles to the process. The NHL switched technology providers from Jogmo World Corp. to SMT last year, luckily having a pre-existing relationship with the latter (SMT provided tracking technology for the 2016 World Cup of Hockey). SMT has been a staple in the sports technology industry since being founded by Gerard Hall in 1991. They pioneered the wireless scoring system for professional golf, the first electronic scoreboard for tennis, and the official scoring systems that powered the X Games. In the last decade, SMT acquired Information and Display Systems (IDS) and Sportsvision, with the latter most notably known for developing the first-down graphic in football broadcasts.

“I think as a hockey fan, I find [puck and player tracking] exciting. And I think a lot of fans will as well.

Bill Daly

NHL Deputy Commissioner

Evans also expressed caution on jumping all-in with AR, as other technologies, such as 3D, came and went in the sports world. ESPN launched a 3D channel in 2010 but shut it down in 2013, citing “limited viewer adoption” in a company press release. But to Evans, the priority should be on the platform.

“I think it’s more about getting the content when I want, where I want it, on the device I want, [at a] reasonable cost and obviously high definition and good quality audio,” Evans said. “Then, you get into things like these next-generation statistics and kind of add on features. But there’s sort of this basic level that you really satisfy first.

“I think the first thing is more availability on digital platforms and being able to watch on more devices and more venues then you can today,” Evans said. “That’s probably the first innovation. It’s going to happen because how many folks under 30 have rushed out and [gotten] paid TV subscriptions, right? It’s not that many. So, let’s reach them first with the product we have today. And then we can start to layer [augmented reality and] some of these things on.”

Still, puck and player tracking are going to offer a new way to consume professional hockey on TV, which is now as crucial as ever. With Covid-19 keeping fans out of the NHL’s return-to-play tournament, and possibly parts of next season, enhancing the broadcast experience is vital to the league’s success. It’s unclear whether the NHL will end up implementing the tech during the 2020 playoffs or wait until next season. When it does, puck and player tracking can create new revenue opportunities for the league and its partners and, most of all, provide fans with a rich, enhanced watching experience.

“I think as a hockey fan, I find [puck and player tracking] exciting,” Daly said. “And I think a lot of fans will as well.”

Disclosure: CNBC is part of NBCUniversal, which also is the parent company of NBC Sports.

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