These are trying times for Hockey Night In Canada.
No Canadian teams left in the playoffs, diminished advertising revenues as a result, and the prospect of negotiating a new national TV and digital rights contract in the next two years. The Canadian NHL teams should rebound. But, says Richard Stursberg, CBC’s former executive vice president for English Services, the chances of CBC keeping the most valuable TV brand in Canada are gloomy.
“I think the chances of (retaining the contract) are low,” Stursberg said Wednesday in Calgary as he promoted his book The Tower Of Babble. “It’s going to be very, very difficult. The sports networks are jacking up the prices, so they’re going to have even deeper pockets when they come to the table. TSN and Sportsnet have proven that they can get big TV audiences as easily as the CBC does. And that’s very hard to fight against. Especially when their owners are very keen to have the property.”
Stursberg believes the business model for pro sports has changed dramatically since CBC won the last contract in 2005. Sports is now, in the words of Rupert Murdoch, the “battering ram of television”. “Everyone has come to recognize the value of sports TV rights. Just look at what Rogers and Bell spent for MLSE ($ 1.32 B.) just to buy themselves 60 or 70 regional Toronto Maple Leafs games a year.”
The growth in mobile and digital platforms has also changed the landscape. “When we did the (2005) deal, we wanted first and foremost to get the TV rights,” Stursberg explains. “But we also took the mobile and digital rights. At the time the NHL didn’t understand completely how valuable they’d be, because they sort of threw them in at the end of the negotiations. Then they tried to buy them back from us.”
Stursberg relates in his book how CTV (along with Rogers) purchased the 2010/ 2012 Olympics knowing they’d likely lose money but taking the Games from CBC. “When you buy sports properties for CBC you have to ensure that they’re going to make money. You can’t put the public subsidy into buying them. It would be wrong. You have only one revenue stream to support them with, and that’s advertising. If you’re TSN, however, you have two streams. You have the big cable and satellite fee stream. And the revenue stream (from advertising).
“CBC can go as high as the revenues will bear. But they can't go beyond that. If they do, all the private broadcasters will rightly object that you’re competing against them with public money. And if you lose money you’re going to have to cut something else in radio or TV.”
In the past, CBC could make the argument that its enormous reach gave it an advantage over the competition, but Stursberg points out that TSN’s estimated audience of six million for the 2011 Grey Cup game has defeated the notion that you can’t get a large audience from a sports channel. “That was always CBC’s big argument historically, and now it’s not true.”