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Rogers Communications Scores 12-Year, $4.9B NHL Rights Deal

Multimedia Pact Freezes Rogers Sportsnet Rival TSN Out of National Canadian Telecasts 11/26/2013 2:38 PM Eastern

 

Rogers Communications Inc., Canada’s largest cable and wireless operator and owner of Rogers Sportsnet, has netted a 12-year, $4.9 billion ($5.2 billion Canadian) multimedia rights deal in that nation with the National Hockey League, icing rival BCE Inc.'s The Sports Network out of the action in the process.

The national pact, subject to an approval vote at an NHL board of governors meeting on Dec. 9 and 10, begins with the 2014-15 campaign and extends through the 2025-26 season. The deal, which encompasses regular-season games, playoffs contests and the Stanley Cup Final for its Sportsnet linear services, also gives Rogers rights across TV Everywhere, wireless, tablet, terrestrial and satellite radio, and Internet streaming platforms. Sportnet previously held NHL national TV rights from 1998-2002.

Reflective of Canadians' passion for hockey, the deal is the largest ever signed by the NHL, averaging about $408 million ($433 million Canadian) annually. That's up from the $160 million (Canadian) the incumbent NHL national carriers Canadian Broadcast Corporation, TSN and French-language RDS are allocating annually under their six-year pacts that conclude with the end of the 2013-14 season.

Morever, the Rogers' deal dwarfs the $2 billion that the NBC Sports Group is paying the league in a 10-year, U.S. rights pact that is now in its third season. Rogers' Canadian rights contract should also help the NHL push closer to its goal of generating some $4 billion in annual revenue, within the next three years with one-quarter coming from national streams.

Under the pact, Canadians will receive more NHL games than ever before through Rogers' wireless and cable assets, promotional vehicles, and diverse media assets, including its City and all Sportsnet vehicles. The agreement guarantees there will be no further regionalization of games or local blackouts. Rogers has three exclusive windows to broadcast any game involving a Canadian team on Wednesday, Saturday and Sunday nights. Fans will have the ability to watch any of those contests regardless of geographical location within the country.

The deal freezes TSN, the venture between BCE's Bell Media unit and ESPN, from national NHL rights that have been a centerpiece of the service since 2002. TSN and TSN2 are scheduled to air 150 NHL regular-season games in the 2013-14 campaign. TSN's extant regional deals to air games of the Montreal Canadiens, Winnipeg Jets, Toronto Maple Leafs and Ottawa Senators remain intact.

Rogers has also reached a four-year sublicensing deal with the CBC, which will retain its “Hockey Night in Canada” franchise, albeit with competition from Rogers properties, as well as playoff action, including the Stanley Cup Final. The CBC has been airing Hockey Night since 1952.

"The plan is to have the Stanley Cup Final on CBC. Our goal is to get maximum reach to Canadians," said Rogers Media president Keith Pelley. "That's obviously the way that is best for consumers as well as for us to drive revenue. If, in fact, a Canadian team was to make it to the Stanley Cup Final, it wouldn't be out of the question that similar to what happened with the gold-medal game in Vancouver in 2010, when we simulcast that game on 11 different networks and broadcast it in 22 different languages; we would certainly look at that option. But our plan is to have the Final on CBC."

Rogers has also inked a sublicensing deal with TVA for all national French-language multimedia rights, which will provide content for parent Quebecor’s cable and wireless systems throughout Quebec. BCE’s RDS French-language service will also be out of the national NHL mix, when the rights agreement goes into effect next season.

The values of the sublicensing pacts were not disclosed, but Canaccord Genuity analyst Dvai Ghose estimated they would offset 60% to 80% of Rogers’ NHL rights fees.

"Our fans always want to explore deeper and more emotional connections to NHL hockey, and that is precisely what Rogers has promised to deliver over the next 12 years -- channeling the reach of its platforms and the intensity of its passion for the game into an unparalleled viewing experience," said NHL commissioner Gary Bettman."The NHL is extremely excited about the power and potential of this groundbreaking partnership."

Noted Nadir Mohamed, president and CEO of Rogers Communications: "Sports content is a key strategic asset and we've been investing significantly to strengthen our sports offering to Canadians. Canadians are passionate about hockey, and through this landmark partnership with the NHL we'll be able to bring hockey fans more games and more content on their platform of choice."

Rogers and BCE each hold a 37.5% share in Maple Leaf Sports and Entertainment, which owns the Leafs, the NBA’s Toronto Raptors and MLS’s Toronto FC.

BCE issued the following statement: “We congratulate the NHL on this announcement. We submitted a bid we believed was valuable for the NHL and appropriate for our business, but were ultimately outbid. In hockey, our partnerships with the Leafs, Jets, Canadiens, Sens, and Hockey Canada (including the World Juniors) remain core to our TSN and RDS TV, radio and digital properties. With an on-air broadcast team unmatched in terms of talent and experience and our extensive array of pro sports content, we’re committed to TSN remaining Canada’s sports leader."

Rogers said it will provide multiple game coverage on up to nine TV channels, plus digital and radio on any given night. Also on tap: expanded pre- and post-game coverage, behind-the-scenes access, profiles of the league's top 50 stars, first-to-market production technology, and a state-of-the-art high-tech studio.

Rogers’ deal also affords it out-of-market rights for all regional games; ownership of all linear and digital highlights, including condensed games and video archives; the rights to operate the NHL Centre Ice and NHL Game Centre Live packages; sponsorship rights to the NHL Shield logo as an official partner of the circuit; and Canadian representation of ad sales for NHL.com.

The expansive and expansive agreement builds on Rogers’ ties to the NHL. In addition to its equity position in MLSE, Sportsnet is the regional broadcaster of the Calgary Flames, Edmonton Oilers, Vancouver Canucks, Senators and Leafs, and has strategic partnerships with the Canucks and Oilers franchises.

Rogers' sports portfolio also includes complete ownership of MLB’s Toronto Blue Jays and Rogers Centre stadium, plus long-term media agreements with baseball, the NFL, NBA, MLS, NCAA, Rogers Cup, UFC and international soccer, among other properties.

The company said it expects the deal to accretive to Rogers Media’s operating profit from the outset and will yield additional benefits to the cable and wireless operations.

In the first year, Rogers will pay just over $300 million in rights, with expenditures increasing annually to the mid-$500 million range in the contract’s final season. As part of the agreement, the company is making an upfront payment of $150 million that will be spread out over the first two years of the deal.

(pictured: Nadir Mohamed, president and CEO of Rogers Communications and NHL commissioner Gary Bettman)

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