CBC proposed $1.5B bid for NHL TV rights by Curtis Rush
Nov 29, 2013
Despite losing NHL broadcast rights to Rogers, the CBC still sees value in maintaining the Hockey Night in Canada brand.
Source: Globe and Mail
In the wake of Rogers’ massive broadcasting deal with the NHL, many have speculated that Hockey Night in Canada’s days are numbered on the CBC and that the deal will ultimately push the public broadcaster out of covering hockey entirely.
Could the CBC have done better in its negotiations, rather than ceding control of Hockey Night in Canada and allowing a private broadcaster control of taxpayer-funded airwaves? And if the CBC was going to get out, why not just sell the rights to Hockey Night in Canada and get a return for them?
Holding onto the brand was a good thing, according to one expert. The brand is worth millions of dollars and the CBC owns licensing and merchandising rights.
“They don’t want to give that up,” said Richard Powers, professor of business law and ethics at the Rotman School of Management. “It’s an iconic brand.”
In the end, he said he thinks it was “wise” for CBC to hold onto the brand, because CBC could stay in the game if Rogers decides to license future games back to the CBC.
At no time did the subject of selling the HNIC brand to Rogers come up, nor was it raised at the board meeting last Monday in Montreal, a source close to the deal said.
Bruno Delorme, a professor sports marketing at Concordia University in Montreal, said he doesn’t know if CBC could have done any better in the negotiations with Rogers.
“From a hockey fan point of view, it’s a disappointment. But if you look at it from the CEO of a corporation, he’s looking at profits and losses.”
Delorme called CBC’s loss a “pseudo” loss because the deal reduces the financial risk for CBC if, for instance, ratings take a sudden drop.
Delorme also said he has “a gut feeling” that Rogers overpaid the NHL because it wanted to eliminate all rivals and perhaps paid “an ego premium.”
Under the deal with Rogers, CBC maintains ownership of the HNIC branding, but Rogers has the right to use HNIC branding across all its platforms.
Although the CBC is still expected to shed jobs, the damage has been diminished due to the deal, according to sources. The CBC, however, gave up editorial control to Rogers, which will be in charge of content, on-air talent and the creative direction of Hockey Night in Canada.
CBC simply did not bring the same amount of money to the table that Rogers did when negotiating with the NHL. The CBC was willing to go 50 per cent higher than the reported $100 million annually it was paying the NHL in a deal that is set to expire after the season, according to sources.
With a valuation in the area of $150 million, the CBC was seeking a long-term commitment on a new agreement ranging from seven to 10 years, putting its bid around $1 to $1.5 billion. The NHL’s asking price was around $200 million (U.S.) annually.
Even with what the CBC termed an “aggressive” bid, the money was a pittance compared to the $5.2 billion that Rogers Communications offered to sew up all national rights to NHL games on all platforms for 12 years.
When the CBC’s exclusive bargaining window closed at the end of August, the NHL went out to the marketplace.
Last Thursday in a conference call to the CBC, NHL commissioner Gary Bettman gave the public broadcaster the bad news. CBC was expecting to hear a response to their final offer. Instead, they learned that the NHL was going with Rogers.
The CBC knew the NHL was looking to add a Sunday night package, but the CBC was not interested in the possibility of moving to Sundays and giving up the Saturday time slot. Moving to Sundays was not part of the negotiations, a source said.
With CBC squeezed out, the public broadcaster was backed against a wall, with the possibility of losing its iconic HNIC brand after next season when the new deal kicks in.
The NHL told the CBC that they should talk to Rogers to see if they could form a partnership. Over the course of the next four days, the CBC agreed to a sublicensing deal that will keep Hockey Night in Canada on the air for four more years, but hands control of the entire show to Rogers.
© Globe and Mail