Hockey fans not only love the game but are intrigued by “the big deal.”
It’s no wonder everyone keeps an eye on their various screens when the trade deadline rolls around late in the NHL season.
For those of a certain age — it’s almost like our JFK moment — we all remember where we were on Aug. 9, 1988 when we heard Wayne Gretzky was traded from the Edmonton Oilers to the Los Angeles Kings in a multi-player deal that also involved the transfer of $15 million US to the Oilers.
It’s been a while since we’ve seen the type of blockbuster deal that was announced earlier this week. And this wasn’t about players. It was about Rogers Communications Inc. essentially becoming Canada’s gatekeeper of hockey broadcasts for the next dozen years in a 12-year deal with the NHL that pays the league $5.2 billion.
BCE Inc.’s TSN is out of the picture after this season, with the exception of regional broadcasts and providing news coverage of hockey.
CBC is still in the game, as Rogers will sub-license it to show hockey games on Saturday nights and throughout the playoffs, and the Hockey Night in Canada brand will live on. That’s how it will work for the first four years of the new contract anyway.
Professional sports revolve around money, and the money gets bigger as the years go by. CBC, as a public broadcaster, got to the point where it couldn’t offer the kind of dollar amounts that were being discussed in this latest round of negotiations with the NHL. It was a little too rich for BCE’s blood too, apparently.
It’s believed CBC was paying about $100 million a season in the current six-year contact that expires at the end of this season. That compares to about $300 million to $500 million that Rogers will be paying for its NHL rights until the 2025-26 season.
“The NHL, frankly, set very high standards, very high financial expectations for these negotiations, and while we thought we brought something very special to broadcasting, CBC was not, candidly, in a position to spend taxpayers’ money in the high stakes,” CBC/Radio-Canada president Hubert Lacroix said at a news conference Tuesday as the deal was discussed.
CBC is not paying any money to secure rights to the NHL games it gets through Rogers, though it’s also not taking in any of the advertising revenue. Lacroix said similar types of partnerships with private broadcasters are likely in the future as money becomes more of an issue for the public broadcaster in this era of government spending restraint. As our reporter Nicholas Kyonka reported (for subscribers only) in his coverage of the NHL/Rogers deal, CBC’s parliamentary appropriations have been cut by $115 million since 2012.
The size of the contract between Rogers and the NHL even dwarfs the agreement the league signed with NBC in 2011, which was believed to be worth about $2 billion over 10 years and was thought to be the richest TV contract to date for the NHL at the time.
In the recent past, circumstances have shifted to give the NHL much more leverage in negotiations with broadcasters than it ever had. As well, something is afoot that gave Rogers a very big incentive to nail this deal for the long term.
Analysts told The Wire Report that it seems Rogers is positioning itself for a future pick-and-pay TV model in Canada. Someday, they predict, people will choose to pay for just one specialty sports channel, as opposed to the several they get in bundles. A Rogers Sportsnet with national hockey broadcasts would give it the advantage among Canadian consumers over a TSN without, one would think.
Speaking of pick-and-pay, we sent Anja Karadeglija to Montreal to speak with Cogeco Inc. CEO Louis Audet. He’s already been offering this type of service to customers in Quebec. Amid expectations that the federal government will soon require such offerings throughout the country, Cogeco is going ahead and expanding it into Ontario.
TV service providers aren’t resisting the move to pick-and-pay, as far as we can see. “Our margins didn’t suffer overly, and our client satisfaction is higher,” is how Audet explained planning a pick-and-pay system beyond Quebec before being legally required to.
Rogers, it should be noted, recently released results of a survey it commissioned to have done by Harris/Decima that indicated most Canadians would welcome the flexibility that comes with a pick-and-pay system. We don’t doubt the survey results, but it’s interesting how willing this major cableco was to publicize such figures.
Many assume Canadians are willing to pay more if they have greater choice. But I’ve always thought that Canadians don’t mind the volume of channels they have in their plans; they just don’t like paying for ones they don’t watch.
Media consultant Kelly Lynne Ashton noted that the government’s push to pick-and-pay “is supposed to reduce consumers’ bills.”
Pick-and-pay has at least some similarity to a hockey season; there will be some winners and some losers.