CBC Goes Large to Keep HNIC
Did the CBC pull a rabbit out of the hat or did it simply make such a high bid for the broadcast rights for Hockey Night in Canada that it scared away the competition? There’s bound to be lots of scrutiny happening after the CBC and the NHL signed a six-year, $550-million deal for HNIC, which has been the CBC’s flagship property for decades as well as a huge cash cow for the publicly-owned broadcaster. At $90-million a year, the contract is almost worth double than the previous deal. The big challenge for the CBC is figuring out how to maintain the profit margins on HNIC or at least keep profit margins healthy. Do not be surprised if the CBC starts to offer more ways to access “content” using the Web, video-on-demand and wireless devices - all for a fee, of course.
While the HNIC deal is rich, CBC had no choice but to pony up if it wants to keep the franchise and, as important, send a statement that it wasn’t prepared to get out of the sports broadcasting business after losing the rights to the 2010 and 2012 Olympics to CTV and Rogers. The question for Canadian tax payers is whether CBC should be spending so much money on the rights for professional sports. After all, the CBC does a great job moaning and groaning about the size of the grant it receieves from the federal government every each. Obviously, CBC has conceded the HNIC is a property it has to have even if it’s a less profitable entity.
One other comment: It really talks to how hockey and HNIC is an integral part of Canadian culture when the CBC has to pay so much while the NHL continues to struggle to get a TV deal in the U.S. The NHL’s current deal with NBC, for example, generates little or no revenue.
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