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OLN Prepares for Puck To Drop

After beating out ESPN for TV rights to National Hockey League games, Comcast's OLN channel will seek higher license fees from cable and DBS operators when the many of the tiny network's carriage deals come up for renewal at the end of the year.

“There’s no question that we believe we’re going to be expanding the number of homes [OLN is] available in, and I think when you add something like the NHL it’s fair to assume your affiliate fee will go up,” said Comcast COO Steve Burke, although he declined to specify the percentage of deals that will expire or how much Comcast will seek to increase subscription rates during carriage renewals.

Under a deal finalized Tuesday, OLN agreed to pay some $65 million to telecast hockey’s upcoming season.
It will run the first of the 58 regular-season games on Oct. 5 and run exclusive national games each Monday and Tuesday during the season, including some planned double-headers.

The games will be followed by a wrap-up show, and OLN will seek to use other outlets including VOD and broadband to make game highlights widely available.
OLN president Gavin Harvey called the NHL a “monumental acquisition” and a new “cornerstone franchise” for the network. OLN will also offer as many games as possible in HD.

That could help appease fans already disgruntled by hockey’s strike who now have to seek out the sport through a new cable venue. It might also help account for a potential lessening of NHL coverage on ESPN, which devoted five nights a week to hockey wrap-up show NHL Tonight during hockey season when it aired the sport.

It is yet to be determined just how much coverage the sport will now get on mega-sports network ESPN, which passed the option to match Comcast’s offer for the low-rated league.

OLN's reach is far less than mighty ESPN or sibling ESPN2. For the summer to date, OLN averaged just 225,000 total viewers in prime time.

ESPN, by contrast, average 1.25 million and ESPN2, 581,000 total viewers. OLN is only available in 64 million homes (vs. ESPN's 90 million) and 10% of OLN's systems offer it only on a digital tier to a portion of its customers.

That has not affected interest from advertisers, contends NHL commissioner Gary Bettman.

“If you look out a couple of years looking back this will hopefully be a pivotal moment in the growth of OLN,” he said.

OLN, best known for its coverage of the Tour de France, has been stockpiling bigger acquisitions in recent months, looking to branch out beyond its core audience of hardcore outdoor sports enthusiasts especially now that fan favorite Lance Armstrong just competed in his final tour.

On the final day of the tour last month, the network premiered repeats of Survivor, ten iterations of which it recently snagged from King World for some $10 million.
OLN will use hockey to promote its USSA skiing and snowboarding franchises, looking to compete with other cable sports networks for male viewers.

“There are sports that are available all over cable television, and that’s what we consider our competitive set,” Harvey said. “We have been focused on being a network that is an exciting and dynamic destination for men who are into competition of all types,” Harvey said.”

Sources said Comcast offered to pay $65 million the first year, $70 million the second year, and an option for a third year at $72.5 million. ESPN's previous deal was $60 million annually. As part of the deal, Comcast is now committed to starting up and carrying a 24/7 NHL cable channel, which it expects to have up on a digital tier within two years.