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."
Stursberg grimaces as he describes the impact of losing HNIC and its 450 hours of prime time Canadian programming. "What needs to happen is people need to have a serious conversation about the future of the CBC. The next few years are going to be very difficult. It's at a point that, in three years, CBC might just collapse. So now if the right time to start this conversation. The No. 1 thing that needs to be done to fix CBC is for the government to choose (between) an elite CBC with ballet or a popular CBC. Choose. Right now, you say 'Let's go in this direction', and they say, 'what about that direction?'They can't choose."
Complicating CBC's challenge is the wily NHL commissioner Gary Bettman, to whom Stursberg devotes much time in his memoir of life at CBC. "He's a very smart guy. He's been at it for years. So near as I can tell, negotiating is his No.1 favourite thing. He's tricky to negotiate with, because he's very prepared and very tough and very experienced. On the other hand, he's very amiable. No matter how terrible the situation he's very amiable."
So what is Stursberg's advice to the bidders in the next contract? "My point would be that it's only about the money. It's all that it's about."
ROUND 2 RATINGS
There are NHL playoff rating and then there are Canadian NHL playoff ratings. As expected, the upset of Vancouver in Round 1 almost halved the numbers CBC garnered in 2011's Round 2, when the Canucks defeated Nashville. CBC's coverage of the Washington/New York Rangers series averaged over 1.5 million viewers (all ratings +2) a game while the New Jersey/Philadelphia series averaged over 1.4 million viewers a game (for a 1.49 M. average in Round 2).
By comparison, the Canucks' playoff games in 2011 averaged 2.8 million viewers a game, pushing CBC's average rating per game to a healthy 2.16 million. The ratings would not have been as high had the Ottawa Senators made it past Round 1 this year, but they still would have trumped the all-American series just concluded. The last time no Canadian teams made it past Round 1 was 1996 when games averaged 1.36 M.
Still, by grabbing the Eastern time zone series, CBC made out better than TSN. As we reported last week, TSN averaged 774,000 a game in its coverage of Round 2 – some of it attributable to being sideswiped by overtime games the same night in the Eastern games. The short series (Kings-Blues went four games, Coyotes/ Predators just five games) also conspired against TSN, which also has the first three games of the Round 3 Kings-Coyotes blowout.
So while NBC and the NHL are salivating over a Kings-Rangers Stanley Cup Final, Canadian broadcasters are hoping for better luck next year – if there is a next year following collective bargaining talks between the NHL and NHL Players Association.