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NHL lockout just the tip of the iceberg for CBC

Oct 9, 2012

Hamilton (October 9, 2012) - The CBC will suffer a devastating financial loss of as much as $200 million annually if it loses the rights to Hockey Night in Canada in 2014 when its agreement with the NHL expires, according to a submission to the CRTC by the broadcast watchdog Friends of Canadian Broadcasting.

"The CBC is hooked on hockey and the lockout could be just a bitter foretaste of the future for the CBC," says Ian Morrison, spokesperson for the broadcast watchdog Friends of Canadian Broadcasting.

ETV Ad Revenue 2011According to FRIENDS' analysis, Hockey Night in Canada:

  • Delivers more than 50% of the ad revenue earned by CBC's English TV Network. And because hockey sales are linked to sales elsewhere on the schedule, hockey drives additional ad sales (as much as $10 million) earned by local stations.
  • Punches well above its weight, occupying 10% of the schedule but delivering 30% of the entire audience watching CBC English TV. Losing hockey would wipe out one third of CBC's audience.
  • Earns a profit for the CBC, albeit a much smaller one in recent years because of a 50% increase in fees the CBC agreed to pay the NHL when it last negotiated a rights deal in 2007.
  • After expenses of approximately $115 million, hockey clears $15 million for the CBC.

Even if the CBC were to avoid the high cost to buy, market and produce hockey it would still face the expense of replacing the 400 hours hockey occupies on its schedule and this is the issue that would play havoc with CBC's finances.  FRIENDS' analysis estimates this would cost approximately $500,000 per hour for a total cost of $200 million and would earn the CBC substantially less ad revenue.

 "All told, the loss of hockey would be much worse than the most recent round of cuts from the federal budget.  It would be a game changer for our national public broadcaster," Morrison said

The CBC is facing deep-pocketed competitors for its hockey rights who are thirsty for hockey.  Bell and Rogers both own specialty channels dedicated to sports. Together, they control Maple Leafs Sports and Entertainment, the parent company of the Toronto Maple Leafs, and they have a recent history of beating the CBC for other broadcasting rights for major sports events like the Grey Cup and the Brier Curling Championship, and until recently, the Olympic games.

 "If the CBC were to lose hockey, it would need to replace some 400 hours of hockey programming with a similar quantity of the very best, most attractive - and expensive ­ Canadian shows. Any other replacement strategy designed to minimize costs, such as American movies or repeats of Canadian shows, would prevent the CBC from meeting its Canadian content requirements and lower audiences," Morrison said.

FRIENDS has filed its analysis with the CRTC which on November 19 will begin the first review of the CBC's broadcast licences since 1999. The broadcast watchdog is calling on the CRTC to require the CBC to explain how it would deliver the Canadian content, regional shows and distinctive programs that the Broadcasting Act requires in the event of the CBC losing HNIC.

"FRIENDS is not proposing that CBC Television drop hockey but our national public broadcaster must prepare for this scenario, which could open new and exciting possibilities to operate more like a public broadcaster in sharp distinction from its private sector competitors - just as its radio services have done for many decades," Morrison said. 

FRIENDS is hosting a town hall meeting in Hamilton this evening called The CBC We Want, moderated by Veronica Tennant, producer, director and prima ballerina.  The event takes place from 5pm to 7pm at the Atrium, McMaster Innovation Park, 175 Longwood Road South.  It is one of a national series to give viewers and listeners an opportunity to speak out about what they expect from the CBC, and is co-sponsored by McMaster's Department of Communications Studies and Multimedia and the McMaster-Syracuse Master of Communications Management program.

Friends of Canadian Broadcasting is an independent watchdog for Canadian programming and is not affiliated with any broadcaster or political party.

By the Numbers - Replacing 400 hours of Hockey Night in Canada programs (millions):

HNIC No HNIC

-$200

Cost $115 $200
Revenue $130 $15
Bottom line +$15 -$185

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For information: Jim Thompson 613-447-9592

Related Documents:

Oct 5, 2012 — Policy Brief: Re: CRTC 2011-379: Licence Renewals for the CBC’s French- and English-language services
FRIENDS supports the renewal of CBC's various licences subject to a number of comments, recommendations and proposed conditions.