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CBC losses in the billions after HNIC fallout: Memo Sun Media
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CBC losses in the billions after HNIC fallout: Memo Sun Media

Published by
Toronto Sun
on
February 13th, 2020

The Canadian Broadcasting Corporation is hemorrhaging billions of dollars after losing the rights to Hockey Night In Canada, according to an internal federal memo.

The Canadian Broadcasting Corporation is hemorrhaging billions of dollars after losing the rights to Hockey Night In Canada, according to an internal federal memo.

According to Blacklock’s Reporter, the television network is out more than $2 billion after losing the 12-year licensing rights to Hockey Night In Canada. The memo, which was obtained via Access To Information, contradicts claims by network executive that the HNIC contract was only worth a “few dollars.”

In a confidential report, the CBC claims it remains “the cornerstone of culture and democracy” despite the large loss in ad revenue.

“CBC Television lost its long-standing flagship sports broadcast Hockey Night In Canada which had been part of the broadcaster’s programming lineup for fifty-five years,” CBC staff wrote in a 2019 briefing note to then-Heritage Minister Pablo Rodriguez.

In 2013, Rogers Communications Inc. paid $4.2 billion for the HNIC rights, which runs until 2026.

The note stated the CBC’s annual ad revenue dropped by about $175 million, which equates to $2.1 billion over a 12-year period. Rogers allows the CBC to license games but without the lucrative revenue generated by advertisements.

Drawing more than a million viewers weekly, HNIC was once CBC’s highest-rated program. At the time, CBC execs claimed the losses were insignificant when Rogers picked up the rights.

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“We have not lost hundreds of millions of dollars on the hockey contract,” then CBC head Hubert Lacroix said in 2015 testimony at the Senate communications committee. “We lost a few dollars.”

“When you look at the broadcasting rights and the cost to produce hockey, and the revenues on the other side, and when you look at it over six years, we didn’t make money on this contract,” Lacroix testified.

At the time, senators questioned Lacroix’s claim.

“If you can’t make money on hockey in Canada, I don’t know what you could make money on,” Senator Michael MacDonald (Conservative-N.S.) stated. “This was very poor management.”

Other ex-CBC executives saw the HNIC loss as disastrous.

“The loss of hockey is going to have serious financial consequences,” said ex-CBC exec vice-president Richard Stursberg while testifying to the Senate communications committee. “You not only lose the profits from hockey, you also lose your capacity to sell the rest of your advertising at reasonable prices.”

“The way you would do it is you’d say, ‘If you would like to have hockey, then you have to buy this dog over here that nobody wants.’ I would say, ‘But I don’t want the dog,’ and you would say: ‘I’m sorry, you have to take the dog if you want the hockey,’” Stursberg testified. “So, hockey is not only important in its own right, it’s important because it props up the rest of the advertising sales.”

CBC’s main revenue source is a $1.2 billion annual parliamentary grant. Last year, the network saw ad revenues drop by 37%, from $178 million to $112.5 million.

The briefing note to Rodriguez included a draft report from the CBC, which cited its “cornerstone of culture and democracy” claim.

“CBC continues to face financial pressures,” staff wrote.

© Toronto Sun

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