CBC can’t compete with specialty channels for sports, experts say

OTTAWA—CBC/Radio-Canada's loss of the FIFA World Cup broadcast rights to BCE Inc.'s Bell Media is another sign that the public broadcaster cannot compete for sports rights with private companies, experts say. “It's public broadcasting versus private sector broadcasting,” Brian Schecter, a media analyst with Puddle Duck Productions in Vancouver who has about four decades' experience in sports broadcasting, said in an interview. The CBC, he said, doesn't have the specialty channel assets that other companies can use to leverage their sports programming. “The private networks have very strong cable assets, and they're able to leverage off those assets to expand programming hours well beyond the capabilities of the CBC,” he said. The days are over when conventional broadcasters held the balance of power over specialty channels, Schecter added, because most people have television subscriptions and access to specialty services. Last week, the broadcast rights to a seven-year FIFA World Cup package were awarded to Bell Media, signaling the end of CBC's broadcast of the soccer games. The CBC will remain the official Canadian broadcaster of FIFA World Cup events until 2014, but Bell will take over in 2015, holding exclusive Canadian rights to the 2015 FIFA Women’s World Cup in Canada, the 2018 FIFA World Cup in Russia and the 2022 FIFA World Cup in Qatar. Hubert T. Lacroix, president and CEO of CBC/Radio-Canada, expressed disappointment about the loss of the FIFA rights at the CBC’s annual public meeting at the Canadian War Museum in Ottawa Wednesday. “We’re disappointed to have lost the rights to FIFA,” Lacroix told The Wire Report, “but between now and 2014, we’re very very engaged in soccer and we will continue to connect Canadians through these events.” Richard Paradis, president of consulting firm Groupe CIC in Montreal, said bidding on high-profile sports rights is more difficult for conventional broadcasters whose programming grids include many more elements than sports. There's a limit to how much money a conventional TV network—as opposed to a vertically integrated company with broadcast distribution, conventional TV, and specialty channel services—can put into buying rights. “It’s becoming more and more difficult for conventional broadcasters to compete with specialty services like TSN and others ESPN, who have a lot more clout in buying rights for sports programming,” Paradis said. Schecter suggested the CBC cannot spend enormous amounts of cash on events like the World Cup when its focus should be on protecting its top sports property, Hockey Night in Canada. “Are you going to spend a substantial portion on a secondary sports property, or are you going to blow your brains out keeping Hockey Night in Canada? It's a pretty obvious answer.” In a broadcasting world increasingly dominated by on-demand viewing and PVR playback, sports is one of the only facets left for live TV, which has driven up the cost of sports rights acquisitions. In 2005, the public broadcaster lost the rights to Olympic coverage, which it had held since 1996. The International Olympic Committee awarded the rights of the 2010 Vancouver Winter Games and the 2012 Summer Games to an alliance between CTV Inc. (which BCE purchased in 2010) and Rogers Communications Inc. CTV and Rogers bid $90 million for the rights to the 2010 Olympics alone. Ian Morrison, a spokesman for watchdog group the Friends of Canadian Broadcasting, said in an interview that the CBC probably made its maximum bid for the FIFA World Cup on which it could still make a profit. As the existing rights holder to the World Cup, CBC knew what kind of audience and revenues could be generated by the event, he said. “They have a model and they know what happened last time,” Morrison said. Paradis noted that CBC also lost the French-language broadcast rights to Montreal Canadiens hockey games in 2002. CTV specialty sports channel RDS won exclusive rights to the French-language regional broadcast of Canadiens games starting in the 2002-2003 season. The CBC reached a deal to share Canadiens games with RDS until the 2003-2004 season, but Radio-Canada's popular program La Soirée du hockey ended after that. “It’s just reality of the marketplace that specialty services are taking more and more place and have more clout,” Paradis said. In 2007, the Canadiens and RDS extended their broadcast agreement, giving RDS exclusive broadcast rights to all 82 regular season games until the end of the 2012-2013 season. RDS is paying nearly $20 million a year for the exclusive French-language rights. The CBC's broadcast rights with the NHL for English-language games on Saturday nights expires in 2014. Paradis said he “wouldn’t be surprised if the rights came up for Hockey Night in Canada we might see them disappear.” Schecter said he does not expect the CBC to lose the rights to Hockey Night in Canada. Despite the cost of rights and other programming costs, he said he believes the show is profitable on advertising alone and that it can be leveraged for cross-promotion and brand building. “It's a huge heritage property for them,” Schecter said, noting that the show been on the air on CBC since 1952. “It's such a part of the fabric of our culture ... The interest in hockey is non-stop.” Schecter said the CBC has also made use of extra rights to NHL games through specials like opening night games, triple headers and a New Year's Day broadcast. Morrison agreed that Hockey Night in Canada is profitable and said industry sources tell him that a 30-second ad on a Saturday night game between the Toronto Maple Leafs and the Montreal Canadiens costs about $40,000. Lacroix told The Wire Report in February that the CBC “invented Hockey Night in Canada, and we’re going to do what is necessary to ensure that it stays within CBC/Radio-Canada.” CBC and Bell Media announced in September that they will place a joint bid for the exclusive Canadian rights to broadcast the 2014 Winter Olympics in Sochi, Russia and 2016 games in Rio de Janeiro. The announcement came one day after Rogers announced it would not pursue a bid for either of the games. Schecter said the partnership is a smart one for the CBC because it once again ensures its broadcast of the Olympics and eliminates a competing bid that would drive up the price of the rights. “The IOC is now in a position where there's not going to be a competitive bid ,” he said. “The buyers are basically in a position to tell the sellers, 'This is what we think they're worth, and if you don't like it, tough.'” Paradis said that, as a national public broadcaster, CBC does not necessarily have to feature mainstream sports such as the Olympics or the NHL and that it could could potentially cover its mandate with the broadcast of varsity-level or amateur sports. “There’s a lot of other sports activities going on in Canada that are a reflection of what Canada’s all about,” Paradis said. Morrison said it's wrong to think that public broadcasters should only cover what private broadcasters do not want or need to air. Traditionally, he said, public broadcasters in democratic countries “are supposed to be engaged in popular culture.” Morrison added that the Broadcasting Act says the public broadcaster is supposed to inform, enlighten and entertain. “It doesn’t say second-level stuff,” he said. The CRTC has approved the CBC for two for Category 2 specialty channel licences, an English-language service called CBC SportsPlus and a French-language service called Radio-Canada Sports. Lacroix told The Wire Report that CBC has “no plans in the short-term to launch a sports channel.” news@thewirereport.ca

CBC can’t compete with specialty channels for sports, experts say

Broadcast | November 3, 2011

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