Kraft cancels Hockeyville program due to lockout
Kraft Canada cancelled its popular Hockeyville program Tuesday, a victim of the protracted National Hockey League lockout that is seeing sponsors as well as fans grow weary.
Kraft said it would give $1 million to Hockey Canada affiliated minor hockey associations instead of the annual competition that rewards Canadian communities for their involvement in their local arenas.
Ken Wong, a marketing professor at Queen's University, said the decision was the latest sign that the NHL and its brand are in trouble.
"What I'm hearing in both the media and the person on the street is a growing resentment about it. It is OK if fans are resentful in a sense because that means they are emotionally attached, but now it is getting to the point of who cares," Wong said of lockout.
"And when it gets to who cares, that's when a brand has big trouble because it says now you've lost your relevance."
The NHL has already cancelled regular season games through Nov. 30 as well as its Winter Classic outdoor game that was planned for New Year's Day in Michigan.
In 2004-2005 lockout, the league waited until Feb. 16 before it called off the entire season.
The Kraft cancellation of the program promoted by CBC and Hockey Night in Canada follows comments by Molson Coors chief executive Peter Swinburn, who said earlier this month that once the lockout ends the brewer — a league sponsor — will seek financial compensation from the NHL.
"There will be some redress for us as a result of this. I can't quantify that and I don't know because I don't know the scale of how long the lockout is going to last," he said at the time.
Consulting firm Brand Finance has estimated the lockout has cost the NHL nearly $500 million in brand value and estimated its worth at US$1.15 billion, down from $1.6 billion.
Edgar Baum, the firm's managing director for Canada, noted the NHL has lost more games to labour strife in recent years than any other major league sport in North America.
"This is very dangerous position that the NHL is putting itself into because it is really losing a lot of its credibility at being able to manage itself as a sports franchise," he said.
Baum said sponsors may look to sign shorter agreements with the NHL in the future and time them to the league's collective bargaining agreements to expire at the same time.
And he suggested that fans won't return to the stands with the same enthusiasm they did after the last time the league lost a full season.
"In Canada, I think they got away with not even a slap on the wrist," Baum said of the fan reaction last time.
"But I think there is only so much that you can take advantage of that before it just catches up with you and I think that's the problem with the NHL."
The league met with the NHL Players' Association on Monday and asked the union to put all of its demands into one complete offer.
The sides are at loggerheads over proposed changes to player contract rights and how to share revenue.
From a marketing and brand perspective, Wong said the next development to watch for will be if sponsors drop endorsement of star players.
"When you see that, that will really tell you that for the advertisers that person has lost their cache," he said.
"The problem now is the longer they are away from the table, the less they are in the news, and the less they are in the news the less relevant they are going to become to people."
Stirling-Rawdon, Ont., was the last winner of Kraft's Hockeyville promotion and was to host a pre-season game before the lockout as well as receive a visit from CBC's Hockey Night in Canada program. That game has been postponed until the 2013-14 season.
Under the new program, Kraft will recognize the top five volunteers and award their hockey associations with $100,000, while 20 other volunteers will win $20,000 for their associations.
Kraft will also give $100,000 to Hockey Canada for learn-to-skate programs.
"Through our many years of involvement in community hockey, we realize there are countless unrecognized hockey volunteers and it's because of them that our favourite sport goes on," said Jack Hewitt, Kraft Canada's vice-president of marketing insight and services.