National Hockey League was established as a non-profit entity in 1917 by 26 teams to govern the league. They had been very successful over the past 75 years with very little exposure. They have thrilled fans and provide financial returns for their owners. Their primary goal is to take hockey to a next level and makes it more popular. They are not worried about competition and are only concerned with overall growth for the sport, the owners, the players and the fans. Due to a recent labour dispute, all the NHL stakeholders lost a lot of money and this coupled with the need to increase the audience let to a lot of confusion between decision makers about what means to choose for creating exposure. The proposed solution is to use an effective mix of mass media/advertising and fan development activities. They are both very good options and choosing between them is not feasible as both have their share of advantage and disadvantages. With a few proposed changes mentioned in the strategic options, in the current implementation of these two options, NHL should see a definite increase in its exposure. PEST ANALYSIS
POLITICAL- Escalating player salaries and unprofitability of several teams led to the owners’ demanding a salary cap on player salaries. Salary caps were a common occurrence in other sports like basketball and football. However, The Players Union was not very happy with this development and resisted the proposal. This confusion eventually led to a major labour dispute which resulted in monetary loss for almost all the stakeholders. ECONOMIC- There are barriers to entry for the participating teams in the league as not everyone can be a part of the league. There were salary caps on player salaries to curb increasing expenditure. Profitability also depended on the size of the market and smaller markets, especially small Canadian markets, struggled despite having devoted hockey fans. SOCIAL- A major social change occurred when NHL slowly but surely started replacing NBA’s fan-following. Some reasons behind this shift were the retirement of NBA’s star player Michael Jordan and the criticism it received by sports commentators. Hockey is a fast, hard-hitting sport which holds a natural appeal for the youth. This worked well in favour of the advertisers and sponsors as that was the age-group they were targeting. Young Americans are considered hip, fast and powerful just like the sport. TECHNOLOGICAL- Some technological innovations that worked in the favour of the sport were the production of the telecast with innovations like the goal camera inside the net. 3 C’s
CUSTOMER- The people who qualified as customers for NHL were mostly ardent hockey fans. Their customers were mainly residents of North America and were people who had enough spare time to be able to follow the sport regularly. Hockey being a fast-paced, hard-hitting, hip and powerful sport aroused interest among younger people who identified with these attributes. The older generation were not considered as NHL customers as they were already loyal towards other sports and would have found it hard to keep up with the fast pace of hockey. One of NHL’s goals is to increase their customer base and appeal to a larger audience as currently 35% of their customers were in their target demographic of 18-34 years of age. COMPETITION- Major League Baseball (MLB), National Basketball Association (NBA) and National Football League (NFL) were all NHL’s competitors; however, NBA was its strongest competitor because their season timings clashed making them seasonal rivals. They all have more TV/radio, stadium and total average revenue per team than NHL. NHL on the other hand, has regular good-looking athletes in good shape as compared to the Basketball giants or the wide bodied football players. They are generally down-to-earth people in whom radio and television executives find a refreshing change after dealing with pampered...