How will it happen & what does it mean for the Toronto Maple Leafs?
In a memo released in September of this year, the Chief Operating Officer of the NHL notified all league employees of initiatives and staff changes to take effect during the 2013-2014 season. In the memo the league identified a plan to increase annual gross national revenue by $1 billion dollars by the end of three years, or in other words, in time for the 2016-2017 season. To put that type of increase in perspective, it had previously taken the league from 2005-06 to 2011-12 – or 6 years – to attain the same revenue growth. Forget linear growth, we’re talking exponential revenue growth here, folks.
Good morning MLHS,
First off, let me start by thanking Alec, Michael and Michael for inviting me to participate in Maple Leaf Hangout Episode #17 – if you guys and gals had nearly as much fun watching as I did filming, then you and I are off to a good start!
Secondly, I wanted to take a moment to introduce myself to anyone that didn’t catch the Hangout and wonders what the heck I’m doing here. I’ve been following Alec’s writing since he started out at that ‘other site’ and I quickly moved over to the greener pastures of MLHS when he made the move. Along with reading all of the incredible content that the writers here put together, I’ve also stealthily followed the comments sections, and although I never actually posted myself, I feel like I’ve gotten to know a number of you by reading your comments over the years. So on that note, let me say that it’s an honour to have the opportunity to write to you along with the rest of the stellar (myself excluded) MLHS team.
Briefly, I’m a lawyer working downtown in Toronto with a concentrated litigation practice. As part of my education I’ve had the opportunity to study and write extensively about sports and entertainment law, and I now work at a firm with a practice in media litigation. As a guy with dreams of working in sports, I can’t tell you how many hours I’ve spent immersed in this site getting my hockey fix. My hope is that I can provide a slightly different take on some of the news and events that concern hockey and our Toronto Maple Leafs. But make no mistake, I’m a fan of the game – and more specifically the Maple Leafs – first and foremost.
I know that the Michaels and I addressed the Rogers deal with the NHL earlier, but I thought I’d just provide a quick run-down for anyone that missed the Hangout, or who simply wants a quick reference.
The Rogers Deal: The Basics
The proposed deal is for 12 years and approximately $5.2 Billion, which averages out to more than the $400 million/ season that the Commissioner was reportedly seeking from a new Canadian broadcasting deal. The deal is one of the longest in sports broadcasting history, and is unprecedented in that it is the first time in North American sports that a major sports league has granted exclusive distribution rights to a single broadcast network. As a result of the deal Rogers gets exclusive rights to all Canadian hockey, across all media platforms (including television, digital, and mobile) until the end of the 2026 season (or roughly until Rick Dipietro’s deal with the Islanders was supposed to expire). Rogers will have the exclusive right to broadcast Canadian hockey on Wednesdays, Saturdays and Sundays.
As part of the deal, Rogers will sublicense two games a week to the CBC under the Hockey Night in Canada moniker over the next 4 years, while TVA will carry all French language broadcasts in la Belle Province. It’s not clear what will happen to the CBC’s affiliation with Hockey Night in Canada beyond four years. The CBC will also retain playoff games and Stanley Cup finals games that fall on a Saturday. Interestingly, because HNIC has now become part of the Rogers programming platform, editorial control over HNIC (including on-air content, talent and creative direction) now belongs to Rogers. In other words, if you’re tired of hearing Glenn Healy malign the Leafs call Nadir Mohamed (don’t actually) because the CBC can’t help you anymore.
Probably the single greatest impact of the deal is that is promises to mark the end of “regional games” and “blackouts.” So what does this all mean for us Leafs fans?
The Rogers Deal: Through a Blue and White Lens
Unequivocally, the end of “regional games” and “blackouts” is a good thing for Leaf fans living outside of the Leafs broadcast region who just want to watch hockey games featuring the Leafs. Regional games and blackouts occur as a result of agreements reached between the NHL, the national broadcaster (currently TSN and CBC), regional broadcasters (currently Sportsnet), and to some degree the hockey club. Take for example a poor Leaf fan stranded in Vancouver, far removed from his or her favourite team.
Under the current (expiring) deal, when a regional Leafs game is scheduled only those viewers residing in the Leafs broadcasting zone can see it. Making matters worse is that when a regional game is scheduled on a night when a national broadcaster is airing another game coast to coast, in order to prevent the games from competing for viewership the regional Leaf broadcast is limited to a 50 mile radius around the ACC.
Under the new deal, it would appear that even where the regional broadcaster (which will now be TSN as the station retains 10 regional Leafs games in 2014 and 26 in 2015) is broadcasting the Leafs game in Ontario, Rogers will have the right to broadcast the game outside of Ontario, so our Vancouver residing Leafs fan is now a happy camper. This is one of the major benefits of having a single media broadcaster because the concern over games competing against one another is a lot less pressing when you own the rights to all of the games anyway.
The concern for Leafs fans is that as part of the deal struck between Rogers and the CBC it may become necessary to subscribe to cable to see any Leafs games. The way the sub-license has been structured it’s not necessarily the case that the CBC will be carrying the Leafs on HNIC in Canada on a Saturday night. While Rogers owes the CBC two NHL games a week, the company retained control over on-air content and may simply decide that it would prefer to have the marquee Leafs matchup on CityTV rather than CBC. If that is in fact the case, then fans will not be able to tune in to the CBC’s free HD feed, and may need to start shelling out for games.
While the deal has not yet been ratified, the NHL Board of Governors is set to meet during the second week of December and will vote on the deal. That being said, anything less than resounding approval by the Board would be shocking at this point. In short, get ready for a whole-lot more Kypreos for the next 12 years.
Until next time,
The potential sports story of the decade for the city of Toronto, and more specifically, fans of the Toronto Maple Leafs is unfolding right before our eyes. Â The legitimacy of the potential sale of MLSE to Rogers should not be easily dismissed. Â The rumoured sale simply makes sense for all parties involved. Â The recent announcement of the pending retirement of MLSE CEO Richard Peddie now starts to bring the picture into focus and adds significant legitimacy to the Toronto Star report of MLSE share sales from the Ontario Teachers Pension Plan (OTPP) to Rogers Inc. Â The fact that the Richard Peddie retirement was announced just before this story broke, absolutely stinks of premeditated public transition planning. Â Personally, I must admit, I knew there was much more to the Mr. Peddie pending retirement announcement, but, I simply had no idea how deep this rabbit hole would go. Â Speculation and associated questions today, from all corners of the sports and business communities is running rampant. Â Why would the OTPP sell off their stake in this cash cow? Â What Return on Investment can Rogers Inc garner on a $1.3B purchase of an asset generating an approximate $160M in profit each year, especially considering that the real estate assets are thought to be excluded from the deal?