Back in 2011 European Ice Hockey fans were frustrated with the NHL’s lack of correspondence and haste, regarding a television deal to broadcast live games. A deal was finally hashed late in the day with middle-men AMI/Medge Consulting, who then sold the rights to individual countries.
It wasn’t an ideal result for many fans in differing countries, all suffering varying issues with their individual providers, but once again NHL hockey was going to be available on television after the ESPN contract had expired.
The five year deal signed was reported at being worth anything up to $22 million a season, almost double the previous yearly contracts with ESPN America/NASN.
As reported by Bryan Koenig of Law360, Washington, it’s a deal that could end abruptly.
I won’t post the entire article below but quote the important pieces.
“The National Hockey League on Thursday checked a Swedish media company in New York state court, saying it put at least $22.5 million in owed licensing fees on ice in a breach of a contract to distribute games in Sweden, Denmark, Finland and Norway.
Medge Consulting AB stopped making payments in the middle of the 2013-14 season, the NHL alleged in its complaint, despite still owing at least $2.5 million for the remaining season and another $10 million per season for the agreed 2014-2015 and 2015-2016 seasons.
The NHL also alleged that even when Medge made the payments for distribution rights in the so-called Nordic countries, they were always months late and required substantial follow-up.”
For this current season the NHL also alleges it hasn’t received a single payment from Medge, when an initial fee should have been paid back in September.
“The contract called for Medge to pay up to 75 percent of the $10 million-per-season Nordic licensing fee by Sept. 1 of the applicable season and the remaining 25 percent by Jan. 1, according to the complaint. The contract also pegged any legal dispute to New York courts, the NHL said.”
“Medge made the first payment for the 2013-14 season but not the second, and it has also refused to hand over fees it collected from sub licensee Viasat Broadcasting UK Ltd., the NHL alleged. After excoriating Medge for the money, the NHL ultimately terminated the agreement in a Nov. 17, 2014, letter that also once again demanded payment, it said.”
A termination letter was sent on December 18 (horrifying news for us fans) by the NHL and “Medge erroneously denied that it breached the [contract] by claiming that the NHL was in breach because it purportedly failed to deliver rights to Medge in relation to a World Cup and other unspecified properties,” the NHL said.
There was no World Cup during the contract period and the contract didn’t call for one to be held, the league said, asserting that it has upheld all of its obligations under the bargain.”
There has been no comment from Medge over these mind boggling revelations but it’s clear that the NHL is at it’s wits end and wants to be paid what is due and ASAP.
There is still one year left on the five year contract which runs until the completion of the 2015/16 season, but at this point it’s hard to see this obligation being completed, assuming that the NHL has the power to pull the plug, and you wouldn’t assume otherwise.
Although this relates only to the Nordic countries, you can’t help but be concerned for the other countries that AMI and Medge sell into. The two companies are separate entities as such but contract’s are complicated beasts and you wonder if this breach (if confirmed by the courts) could affect the whole deal if monies aren’t paid.
I’m specifically concerned that Medge brought up rights in relation “to a World Cup and other unspecified properties,” because the latter would not have even been on the negotiating table back in 2011.
It does not fill me with confidence and once again the fate of an NHL television deal in Europe is in doubt as we head into another summer.
I shall try and keep you informed of the developments as best I can and I would like to thank Rob Smith and Kevin Hayles for pointing me in the direction of this latest news.
If you’ve any questions, information or any news you would like to put my way, please do via a comment here or you can find me on Twitter, where my handle is @MarkUkLeaf.
Let us hope this is not a situation which quickly goes downhill and leaves us in the same predicament as 2011.