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Canada to deliver for NHL
New TV deals could double rights fees
Published November 25, 2013, Page 1
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The ongoing negotiations involve five Canadian networks: CBC, TSN, Sportsnet, and French-language broadcasters RDS and TVA. Negotiations are focused on 10-year deals, the same length as the $2 billion agreement between the NHL and NBC Sports Group that was reached in 2011. The forthcoming Canadian deals are expected to escalate in value over the length of the contracts, possibly exceeding a total of $400 million by the end of their terms.
|CBC is expected to remain the NHL’s major partner and retain “Hockey Night in Canada.”
The NHL is receiving about $190 million annually from its Canadian rights deals with CBC, TSN and RDS. Those agreements took effect in 2008 and expire after this season.
The deals would bring another massive spike to the league’s media rights, on top of the sizable increase NBC Sports Group paid in 2011, going from an average of $77.5 million per year to $200 million per year. The agreements also provide yet another example of the robust marketplace for live sports programming.
Additionally, the deals come at a key juncture for the NHL, as three months ago, the league outlined plans to increase revenue generated at the league-office level by $1 billion over the next three years. Getting more than $350 million annually in Canadian media rights fees — meaning more than $150 million in new annual revenue — would be a key step in helping the NHL reach that goal.
According to industry sources, CBC will remain as the league’s major partner and will retain “Hockey Night in Canada,” its iconic franchise since 1953. But the network would see its rights fee go up and some of its current inventory go to other programmers.
CBC (the over-the-air, public Canadian Broadcasting Co.) now pays $121 million a year. In the new deal, CBC is expected to pay about $175 million a year. However, it would lose the rights to the NHL All-Star Game and some playoff broadcasts, sources said.
“It meant a lot to the NHL and CBC for the network to keep ‘Hockey Night in Canada,’” said one source. “The key was maintaining that relationship while still making a workable deal [financially] for CBC so they wouldn’t get hurt too much. It looks like a fair resolution was found.”
In the current deal, CBC shows four of the eight first-round playoff series; two of the four second-round series; one full conference final plus four games of the other; and the Stanley Cup Final. The new agreement is likely to be without one of those four first-round series and without the four-game conference final package. However, CBC would retain its priority selection of series.
The NHL has successfully engaged TSN and Sportsnet in competitive bidding for the newly available inventory. TSN is likely to be the future rights holder of the NHL All-Star Game and is the leading candidate to own the rights to that second conference final, sources said. TSN’s current deal gives the network four first-round series, two second-round series and three games of the conference final series where CBC has the other four.
In its current deal, TSN pays $40 million annually. Sources said that TSN’s reluctance to pay substantially more has been the biggest stumbling block in the league’s overall negotiations with the Canadian networks, but the issues are expected to be resolved in the coming weeks.
Rogers Communications-owned Sportsnet is in the bidding for available playoff games but is also seen as the front-runner to purchase a new regular-season offering of a weekly Sunday night telecast. A featured Sunday night game would join CBC’s Saturday franchise, TSN’s weekly Wednesday broadcast of a game featuring at least one Canadian team, and NBCSN’s “Wednesday Night Rivalry” as tentpole weekly events.
“The NHL has seen the success of MLB on ESPN and the NFL on NBC on Sunday nights,” said a source. “The league is very confident that they can have relative success with a Sunday night game in Canada.”
In recent years, Sportsnet has provided regional telecasts of Vancouver Canucks, Calgary Flames, Ottawa Senators and Toronto Maple Leafs games. A national Sunday night game, along with any playoff broadcast rights it may acquire, would make Sportsnet a stronger national player.
Together, the sum of the TSN and Sportsnet deals is expected to surpass $125 million annually for the league.
A bid from TVA, a French-language network owned by Pierre Karl Péladeau — who is attempting to bring an NHL franchise back to Quebec City — could result in an additional partner for the NHL. TVA is negotiating to obtain some of the French-language rights currently held exclusively by RDS, which would still remain as the league’s primary French partner.
RDS pays approximately $30 million for its exclusive NHL rights. With or without TVA, the new French-language deals are expected to surpass $50 million for the league.
Details about digital rights that would be included in the new deals were not available.