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CBC downplays loss of NHL broadcast revenues by Mike De Souza

Oct 28, 2013

The CBC says profit margins from airing NHL hockey had dwindled due to the cost of getting exclusive rights.

Source: National Post

Senior management at the CBC doesn't plan to ask for new federal funding and anticipates "minimal" impact on programming following a deal announced this week that leaves the public broadcaster without advertising revenue from professional hockey broadcasts.

As federal politicians expressed caution about questions on funding for the public broadcaster, the network's acting executive vice-president, Neil McEneaney, downplayed financial impacts of the hockey deal, suggesting that profit margins for CBC had dwindled in recent years due to the high cost of getting exclusive rights from the National Hockey League.

Rogers Communications announced this week that its new 12-year exclusive deal would require about $5.2 billion in total payments to the NHL beginning with the 2014-2015 season.

McEneaney said the deal - which would allow the public broadcaster to carry some of the Rogers games over the next four years - will allow it to continue promoting its programming during NHL broadcasts, without any ad revenue, but also without the financial risks associated with paying billions of dollars for exclusive rights.

"The reality is (that) years and years ago, a number of contracts ago, Hockey Night in Canada did make a nice profit," said McEneaney, who will return to his role as general manager of finance and strategy at the CBC in the next week.

But he said the fees for exclusive broadcast rights have risen dramatically in all professional sports in recent years and cut into profits, including the current CBC deal with the NHL that will expire at the end of this season.

"Through the life of this contract, we've faced a couple of recessions (and) the advertising market has softened a great deal, so that's why those margins have thinned out," said McEneaney.

Ian Morrison, a spokesman for an advocacy group, Friends of Canadian Broadcasting, said the deal would give the CBC about four years to plan an "orderly strategy" to wean itself away from hockey into other programming.

© National Post