Lockouts are no fun. Owners lose. Players lose. Sponsors lose. Networks lose. Vendors lose. Employees lose. Fans lose. You get the picture. But putting things on a spectrum, it’s hard to imagine an entity that lost more due to the latest NHL stalemate than the CBC.
Things have been hurting as of late for the public broadcaster. In early 2012, there were program and staff cutbacks after $155M in federal funding was trimmed from the operating budget. And then, to add insult to injury, in late 2012, and into early 2013, the NHL lockout put the network’s crown jewel, Hockey Night in Canada (HNIC), on ice. That’s a lot to swallow in one turn of the calendar.
The NHL lockout resulted in a huge loss in advertising revenue for the network. What should come as no surprise, HNIC is the CBC’s #1 program in terms of viewership. And they leverage this to promote their non-sports programming and to lure big bucks from companies looking to get in front on a large, and what I consider engaged, national audience.
I say engaged because what makes HNIC so unique and valuable for the CBC in 2013 is the fact that it’s live content. And because it’s live content, viewers, for the most part (unless you’re fellow blogger, Jeff Lush), want to watch in real time. PVR or not, people still want to watch their beloved Leafs mop the floor with the Habs as it happens. Watching hockey is also very much still a social activity. So while recording shows on PVRs is the new norm, it isn’t the case with live television such as HNIC. For the majority, it’s live or bust.
And it seems as if the CBC is well aware of how important HNIC is to the network. Look no further than a few weeks back, on January 19th, when the CBC purchased the masthead ad unit on the homepage of YouTube Canada promoting the return of HNIC:
Just think about this for a second: a major Canadian TV broadcaster promoting its biggest property on a non-traditional advertising channel. It seems as if the CBC wants to take nothing for granted when it comes to viewership on HNIC. They need guaranteed viewership.
For those wondering what the YouTube masthead ad unit costs for one day in Canada, there’s no concrete number on the media buy but estimates are in the $400,000 range for the United States for one day. Do the math to get a Canadian comparable, but it’s no doubt a hefty investment for a network looking to save money, not spend it.
But while it’s pretty fair to say that the CBC needs HNIC, they’re going to have to fight for it. That’s because, as if the CBC needed more bad news, their HNIC contract is set to expire after the 2013-14 season. In 2007, the last negotiations, things didn’t go so well for the CBC as the price paid for television rights was in the range of $100M over six years, up $20M from the previous deal. The negotiations between former Vice-President of English Programming, Richard Stursberg, and NHL Commissioner, Gary Bettman, were well documented in Sturberg’s 2012 book, The Tower of Babble.
And the timing won’t make for an easier negotiation this go around. For one, the CBC is trying to deal with the aforementioned budget cuts. But second, Bell and Rogers recently purchased Maple Leaf Sports & Entertainment. The Leafs, the major HNIC draw, are now owned by the CBC’s biggest competitors. It doesn’t take a rocket scientist to piece this one together. Toss in the fact that the CBC won the Canadian media rights to the 2014 and 2016 Olympic Games after missing out on 2010 and 2012 to the Rogers/Bell Media Consortium, and it makes the upcoming battle for HNIC’s media rights all the more interesting.
Bottom line: Will the CBC be able to afford to renew HNIC in 2014? In my opinion, the better question is: Can they afford not to?
Adam Puddicombe is a weekly blog contributor to Sports Business Canada