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CBC sent to penalty box over NHL revenues

Nov 27, 2013

Source: Vancouver Sun

TORONTO - The National Hockey League and Rogers dealt a severe blow to the Canadian Broadcasting Corporation on Tuesday, announcing a 12-year, $5.2-billion agreement that grants NHL broadcasting rights to Rogers.

While the CBC will continue to air Hockey Night in Canada on Saturdays for the next four years, the national broadcaster will give up lucrative hockey revenues that have traditionally subsidized its slate of original Canadian programming.

CBC/Radio Canada president Hubert Lacroix said at the news conference announcing the deal that the NHL had high financial expectations and the CBC was "not in a position to spend taxpayers' money on this game of high stakes."

The deal, the largest in NHL history, gives Rogers national rights to all NHL games, including the playoffs and Stanley Cup Final, on all of its platforms in all languages. TVA, a privately owned French-language network in Quebec, earned all of the Canadian French-language multimedia rights.

Left unanswered at this stage are questions about what this means to the future of the CBC.

Lacroix acknowledged hockey profits will no longer be available to help fund original series such as Republic of Doyle and Mr. D. He said discussions were underway to possibly generate income in other ways, should CBC partner up with Rogers in the production of Hockey Night in Canada.

He also confirmed in an internal memo to staff that there will be job losses, although not as many as there would have been had they lost the NHL altogether. Lacroix was unclear on which jobs would be cut as a result of this deal.

Also in question is the future of CBC's talent, especially Don Cherry. Rogers Media president Keith Pelley said it was too soon to answer those questions, but noted that Grapes could very possibly turn up as a commentator on City or Sportsnet.

"Over the next months and years, we will evaluate all facets of our production and our programming, certainly in consultation with CBC regarding 'Hockey Night in Canada,"' said Pelley.

Janice Neil, an associate professor at Ryerson University's school of journalism, said the loss of hockey revenue likely will force the public broadcaster into a broader re-examination of its role.

"It's coming at a bad time," Neil said, "when the federal government isn't friendly and they've experienced (budget) cutbacks."

The federal government announced last year it would cut $115 million in funding to the CBC over the next three years, or about 10 per cent of its annual $1.1-billion allotment.

Neil noted that despite many years of asking, the CBC has been unable to get a commitment for long-term stability in the federal subsidy to the public broadcaster.

And without hockey in the future, Neil said CBC will have to figure out how to fill a lot more broadcast hours with programing "that isn't going to cost them the moon."

Neil said there has been a long struggle "within the CBC and CBC-loving community" to move away from sports and, as a public broadcaster, focus more on the arts and culture programing that other broadcasters don't do.

"That would be quite a departure from where they've been going in the last few years (under former executive vice-president Richard Stursberg), going after high ratings and reality-type shows," Neil said.

According to a report from Friends of Canadian Broadcasting, Hockey Night in Canada provides as much as half of the English television network's advertising revenue, while hockey accounts for up to a third of its television audience. CBC is also losing revenue from selling broadcast rights to TSN and Sportsnet, which had previously purchased the rights to broadcast some games.

During the NHL lockout, Friends of Canadian Broadcasting spokesperson Ian Morrison said the loss of hockey at the CBC would be a "game changer."

"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," he wrote.

While CBC will no longer make money from Hockey Night in Canada, Lacroix said airing the games will still be good for the public broadcaster.

"We think the ability to still have Hockey Night in Canada is something important to us ... and that's what we get out of this," he said.

He notes the deal also allows CBC to promote its programming in prime time across all Rogers networks.

"So when you're going to see a minute promoting Cracked or promoting Arctic Air or the Dragons' (Den), it's going to be something that's not only going to be on our network but it's going to be on all the other networks," he said.

He said discussions were underway to possibly generate income in other ways, should CBC partner up with Rogers in the production of Hockey Night in Canada.

"Then if they use some of our resources - and we have different agreements going on right now - it will be something that will either be paid in kind or in services or in cash."

Pelley also floated the possibility of CBC newscasts airing on City, for example, after a playoff game.

But Tom Mayenknecht, sports/business commentator and radio host for The Sport Market on Team 1040, said the new deal is a huge blow for the public broadcaster.

"Simply put, in macro terms, it's a massive landscape change for the CBC given the revenue model it's had access to for the last several decades. And it is, in my view, only marginally better for them than not having the rights at all, simply because they won't be able to sell the advertising the way they were able to in the past," he said.

"And it used the advertising that it drove from Hockey Night In Canada to support a lot of its other programing. So that will definitely be one major impact ... they just won't have that net revenue in the way that they have in the past."

However, he said, it might be a little early to fully understand the implications. "While the macro lines of this deal are now available and have been announced, there's still a lot of details behind the scenes. What does it mean for the CBC partnering with Rogers in terms of future Olympic bids? What will be the plan for that?"

The Rogers deal will also be a hit to Bell Media's all-sports channel TSN, a bitter rival to Sportsnet that has relied on the NHL to build its brand.

Bell Media vice-president of communications Scott Henderson said TSN would have 10 Leafs games next season under a regional agreement and that, starting in 2015, the network would have 26 regional Leafs games. TSN also has a deal for more than 60 regional Jets games through 2021.

TSN personality James Duthie reminded fans on Twitter that the specialty network is still airing games and is gearing up for the World Juniors in a month.

"Been a privilege being a part of The NHL on TSN the past 12 years. Congrats and best of luck to Rogers/HNIC," Duthie tweeted.

Sports consultant Brian Cooper, president of S&;E Sponsorship, noted that TSN still holds a lot of popular championships in basketball, soccer and golf but called the news "a severe body blow (to TSN)."

"In this country, there is only one sport that really matters," said Cooper. "They have a lot of programming that they probably weren't using around those championships that they're now going to have to employ instead of putting on the shelf but this has changed the landscape tremendously in this country."

The agreement is subject to approval by the NHL's Board of Governors at its meeting Dec. 9-10.

With files from Derrick Penner and Brian Morton, The Vancouver Sun, and William Wolfe-Wylie, Canada.com

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