OTTAWA — Senior management at the CBC doesn’t plan to ask for new federal funding and anticipates “minimal” impact on programming following a deal announced this week that leaves the public broadcaster without advertising revenue from professional hockey broadcasts.
As federal politicians expressed caution about questions on funding for the public broadcaster, the network’s acting executive vice-president, Neil McEneaney, downplayed financial impacts of the hockey deal, suggesting that profit margins for CBC had dwindled in recent years due to the high cost of getting exclusive rights from the National Hockey League.
Rogers Communications announced this week that its new 12-year exclusive deal would require about $5.2 billion in total payments to the NHL beginning with the 2014-2015 season.
[There is a video that cannot be displayed in this feed. Visit the blog entry to see the video.]The CBC’s McEneaney said the deal — which would allow the public broadcaster to carry some of the Rogers games over the next four years — will allow it to continue promoting its programming during NHL broadcasts, without any ad revenue, but also without the financial risks associated with paying billions of dollars for exclusive rights.
“The reality is (that) years and years ago, a number of contracts ago, Hockey Night in Canada did make a nice profit,” said McEneaney, who will return to his role as general manager of finance and strategy at the CBC in the next week.
But McEneaney said the fees for exclusive broadcast rights have risen dramatically in all professional sports in recent years and cut into profits, including the current CBC deal with the NHL that will expire at the end of this season.
“Through the life of this contract, we’ve faced a couple of recessions (and) the advertising market has softened a great deal, so that’s why those margins have thinned out,” said McEneaney. “I can’t give you the exact numbers or percentages, but they have really much thinned out.”
Rogers CEO Nadir Mohamed (left) shakes hands with NHL Commissioner Gary Bettman following a news conference in Toronto on Tuesday 26, 2013 as they announced a long term broadcast and multimedia agreement, which provides Rogers with all national rights. Also announced was a multi-year sub-licensing agreement with CBC and TVA sports for the NHL games. THE CANADIAN PRESS/Chris Young
As a result, he said the CBC wasn’t heavily relying on hockey broadcast revenues in recent years to finance other programming, but he said the public broadcaster needs to define its deal with Rogers — described by CBC’s president Hubert Lacroix as something that “may not be the ideal scenario” — before figuring out how the Crown corporation’s programming will change in the future.
“The CBC needs to adjust to a world where we’re no longer producing Hockey Night in Canada and then taking the financial opportunities and risks associated with that,” said McEneaney. “All of those details need to be worked out with Rogers as to what they need, how it’s going to be sold and (if) there is anything that they need from us as a result of that. Only once we get that kind of feasibility and understand their plans, can I then see what the true impact is on the CBC.”
The CBC said in its annual 2012-13 report that its revenues dropped by about $43 million and its expenses dropped by about $62 million in the previous fiscal year. It said the drop in revenues was mainly due to the absence of hockey broadcasts as a result of an NHL lockout, while the drop in spending, was partly due to the lockout as well as $115 million in cuts brought on by the Harper government’s 2012 budget.
When asked if it was contemplating a request for new federal funding, McEnaney briefly hesitated, before saying “no.”
The Crown corporation, which produces content for radio, television and the web, operating at arms length from government, received about $1.1 billion in federal funding for that year.
“The CBC already receives significant taxpayer funds, and we believe they can operate within their existing budget,” said Mike Storeshaw, director of communications for Canadian Heritage Minister Shelly Glover.
Storeshaw also said the government was happy that the Hockey Night in Canada tradition would continue for Canadians, with access to more hockey on different platforms without regional or local blackouts.
“However, until there is a clearer indication of the full impact of this agreement, it would be premature to speculate on any government action,” he said.
Both the opposition New Democrats and Liberals suggested that Parliament should study funding issues at the CBC further.
NDP heritage critic Pierre Nantel said he had already been approached by one Radio-Canada employee who expressed concerns about programming impacts of the new hockey deal, which could deprive the broadcaster of about 40 per cent of its existing advertising revenues.
“Obviously, this has a monstrous impact,” said Nantel. “We’ll be asking the (parliamentary) heritage committee to study this.”
The CBC’s French-language network, Radio-Canada, lost its own hockey broadcasts about 10 years ago, but continued to produce other popular local programs for its airwaves.
“I certainly believe, like most Canadians, that we need strong secure, stable funding for our national broadcaster,” said Liberal leader Justin Trudeau. “There are interesting and exciting conversations we need to have, particularly around new models, whether it’s moving toward more digital and various roles for our broadcaster and I know that the Liberal party is committed to continuing to work with Canadians and with the CBC to make sure that we have a strong public broadcaster.”
Ian Morrison, a spokesman for an advocacy group, Friends of Canadian Broadcasting, said the deal would give the CBC about four years to plan an “orderly strategy” to wean itself away from hockey into other programming.
