Hey there, time traveller!
This article was published 1/1/2014 (854 days ago), so information in it may no longer be current.
TORONTO -- Few things get to the heart of Canadians like hockey, so when Rogers Communications scored a multibillion-dollar deal that will shake up how the sport is broadcast, the country paid attention.
The ink was hardly dry on the 12-year contact, in which Rogers locked up National Hockey League television and multimedia broadcast rights, when fans began asking how Hockey Night in Canada would be affected.
But reverberations from the $5.2-billion sports deal will be felt beyond the rinks in 2014 as Canada's biggest media companies grapple with a world that's turning off real-time TV broadcasts.
The savvy hockey partnership, which begins next season, eclipsed other major headlines in a survey of editors and broadcasters for The Canadian Press Business News Story of the Year.
The November deal was chosen by 48 per cent of respondents, more than double the votes for BlackBerry's latest swing at a recovery, which received 23 per cent. The battle over the Keystone XL and Northern Gateway pipelines took 22 per cent.
"Rogers has delivered an American-style, big-money TV deal, certainly a first for a Canadian network," said Christopher Pride of CJRW in Summerside, P.E.I. "This may be the beginning of a major cultural shift in how this country views hockey."
Even if you don't watch sports, chances are the Rogers-NHL partnership will change how you view cable TV and, potentially, how much you pay for it.
Sports entertainment is the Holy Grail for broadcasters because it's one of the few places where advertisers will still pay top dollar for a 30-second spot in an era of Netflix, PVRs and on-demand programs.
"Sports programming is the last bastion of appointment viewing," said Vijay Setlur, a sports marketing instructor in Toronto. "The NHL is a big piece in the puzzle for Rogers."
Sports became a priority for Rogers after it acquired the Toronto Blue Jays more than a decade ago. Rogers has been in the game ever since and most recently acquired The Score channel, rebranding it Sportsnet 360 to fit into its sports TV and radio assets.
All of these deals have come at a major price and if lessons from the United States are any sign, the bill will be paid for by more than just sports fans.
Networks such as ESPN pay massive amounts of money to leagues for rights to their games. Two years ago, the cable channel dished out $15.2 billion to extend an agreement with the NFL through 2021. Much of those expenses are pushed down to cable operators.
In the U.S., sports programming has been responsible for nearly doubling the price of the average monthly cable bill to US$78 between 2001 and 2011, research firm SNL Kagan says.
While the price climb has been less dramatic in Canada, cable packages became a centre of controversy in 2013 as the federal regulator pushed for more consumer choice and weighed the possibility of a pick-and-pay model.
It's unclear how Rogers plans to distribute the NHL content, raising the possibility the CRTC could intervene, said a report from Moody's.
"Despite the Canadian government's support of free markets, should Rogers' plans adversely affect consumers, regulators will respond," the ratings agency said in a note last month.
Digital streaming distribution is one area where Rogers has tested the water. It already sells digital access to its Sportsnet World programming, which includes international soccer, rugby and cricket, for about $275 a year.
Rogers has considered a streaming subscription for Toronto Blue Jays games or its Sportsnet channel, a senior vice-president said in early 2013.
So far, that package has yet to materialize, although a hockey bundle would almost certainly be offered as well.
To keep from looking like a predator, Rogers has invited competitors to secure their own mini-agreements for NHL content, although the offers are hardly ideal. One of the biggest losers is the Canadian Broadcasting Corp., which has been the television home of Hockey Night in Canada since 1952.
For the next four years, Rogers will allow the CBC to broadcast the same Saturday night hockey feed that will be shown on its own networks. But the CBC will have to rebroadcast the same commercials as the Rogers channels -- and CBC won't get any ad revenue.
This will slam the CBC's financials and the fallout will cause a decline in viewership, less money for show budgets and job losses.
-- The Canadian Press