Olympic rights deal ‘fiscally responsible,’ CBC says

CBC/Radio-Canada says it will either break even or earn a profit on its acquisition of the broadcasting rights for the 2018 Olympics in South Korea and the 2020 Olympics in Japan. During a conference call with media following CBC’s announcement Tuesday that it was partnering with BCE Inc. and Rogers Communications Inc. to broadcast the Olympics, Jeffrey Orridge, executive director of sports properties and general manager of Olympics at the public broadcaster, said CBC “put together an extraordinarily viable business model that will be either a break-even or a revenue-positive model.” He would not specify how the costs will be split between the three partners under the agreement. The promise to not lose money on the Olympics was one the CBC also made for the 2014 and 2016 games. While he wouldn’t comment on figures involved in the deal, Orridge said: “We gave an offer to extend that was respectful to the stature of the Olympics but also fiscally responsible.” The comments followed a statement by Hubert Lacroix during the announcement that the Olympics are “a way to connect and to tell stories to Canadians from all across the country. And this ability to do this, in a context with partners, allows us to bring the best Olympic experience to Canadians, bar none.” He said the 2018 and 2020 Olympics will use the same model as the 2014 Sochi Olympics and the 2016 games in Rio de Janeiro. For the 2014 games, CBC also reached an agreement with Bell and Rogers to share coverage. “We completely reinvented the economic model with the Sochi and Rio games. This model allowed us to meet our objectives, to be fiscally responsible, so to respect the dollars that Canadians invest in their public broadcaster,” Lacroix said in French. “This is the same model that will be repeated for the Olympics that will take place in South Korea and Japan.” Lacroix added that the participation of Bell and Rogers “allows us to meet our objectives” both financially and in terms of the CBC’s mandate. Phil King, president of sports and entertainment for Bell Media’s CTV network, said during the conference call that “we worked with CBC to come up with, I guess, a financial plan as much as a production plan,” and added his company expects to “break even or make a bit of dough on it, too.” “The great news is we’re all going to share production resources, probably more then ever, because as we all know the CBC sports department has been downsized somewhat and we are happy to help the public broadcaster bring these games to Canada.” Rogers Media president Keith Pelley added that “from our perspective, the deal would be somewhat of a reversal of our NHL deal, where CBC takes the lead in production and they sell the inventory on Sportsnet, which is a complete reversal to what transpired with the NHL.” Under a $5.2 billion deal in which Rogers acquired NHL rights last year, the NHL sub-licenses the rights to some games to CBC, allowing it to continue to air its flagship Hockey Night in Canada program featuring regular season hockey games on Saturday nights as well as some playoff games, including the Stanley Cup Finals. Rogers collects the revenues from those broadcasts. “CBC is the lead as far as the editorial, but obviously with both Sportsnet and TSN, we will have significant input and help with that as CBC makes their decisions,” Pelley added. Orridge said the two parties would share the production costs of the deal, and would share “airwaves,” “technical resources,” “expertise” and “talent.” Barry Kiefl, president of Canadian Media Research Inc., said it's not surprising that CBC would win the rights to the Olympics in 2018 and 2020, and partner with private-sector players such as Bell and Rogers to mitigate its costs, as it did for the Sochi Games. He said the Olympics have become an "affordable property" for the public broadcaster, and added that after CTV (now part of Bell Media) and Rogers teamed up to pay $153 million US for the 2010 Olympics in Vancouver, the market rate for the Olympics has declined. "Rogers and CTV ended up just pricing it beyond anybody's imagination," he said in a phone interview. "And they weren't as successful ." Kiefl added that financial documents from CBC and the CRTC indicate the Olympics are not drawing dollars from advertisers they way they used to. "I think basically that the private sector found that they couldn't make any money out of it, and so they decided they would withdraw and not participate in a bidding process," Kiefl said. "So CBC stepped in and saw that there was a bargain to be had, I guess." The partnership is necessary in order to provide the kind of coverage viewers expect, Pelley said. “You need this many platforms to be able to satisfy the actual consumer demand for the Olympics. We saw that change in 2010 when the consortium brought 16 networks and broadcast the games in 22 different languages, and that became the standard,” he said. “I don’t think it would be possible now for one broadcaster to be able to quench the thirst of what is needed as far as consumer demand for Olympic broadcasting.” King added that Bell Media “probably had enough networks to go alone … but you have to realize we have other programming commitments as well.” “It was pretty clear to us we needed to have some kind of partnership. I think Keith’s right … one company doing it alone is virtually impossible now.” — With reporting and editing by Anja Karadeglija at akarad@thewirereport.ca and Derek Abma at dabma@thewirereport.ca

Olympic rights deal ‘fiscally responsible,’ CBC says

News | October 28, 2014

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Olympic rights deal ‘fiscally responsible,’ CBC says

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