When the next Winter Olympic Games begin in 2014, the action will be beamed to Canadian TV screens from Russia - but with no love from Rogers Communications Inc.
The company’s media division declared itself out of the race for the Canadian rights to the Games in 2014 and 2016, to be held in Sochi, Russia, and Rio de Janeiro, Brazil, respectively. That decision eliminates the country’s No. 2 cable sports broadcaster from contention for one of the sporting world’s biggest events, and also signals the end of the partnership between Rogers and BCE Inc.’s Bell Media unit, which joined forces to broadcast last year’s Winter games and next year’s Summer Olympics.
CTV’s former owner CTVglobemedia Inc. and Rogers bid a record $153-million (U.S.) for the rights to the Vancouver and London 2012 Summer Games, under a structure that makes Rogers a 20-per-cent shareholder, with CTV controlling the rest. But Canada’s Olympic Broadcast Consortium, as the partnership is called, has had to sell advertising in a difficult economy that has hammered corporate marketing budgets.
The larger part of that bid – $90-million – was for the Vancouver Games, since the prospect of an Olympics on home soil was so valuable for broadcasters here. But the broadcast partners actually lost money on the Games, and expect to lose money on the London broadcast as well.
“The business model was a factor going forward,” said Rogers Media president Keith Pelley in an interview Thursday.
This is a change of strategy for Rogers, which had previously planned to bid alongside CTV for the next two Games. Mr. Pelley was the head of the consortium during the Vancouver Games before joining CTV, and then jumping to Rogers.
Not investing in the Games also frees up Rogers’ budget to spend on TV rights to other sports events in an environment where the price of those rights is mounting. Rogers will be announcing more sports rights acquisitions in the coming days, Mr. Pelley said.
“I had to look at it objectively and say what is the best to continue with our vision and our strategy to be Canada’s No. 1 sports media brand? When you look at all the other properties we want to do, and we continue to look at all the major properties … was that where we want to be? It’s just not a fit,” he said.
But there is another concern at play as well: With Rogers’ status as a minority partner in the consortium, its brand was not front-and-centre as the Olympic broadcaster the way CTV’s was. While competing specialty channels TSN and Rogers Sportsnet both aired Olympic programming, many of the big-ticket events went to the main broadcast network, CTV.
“The branding was more CTV-focused. It sure did seem like it,” said Alfred Dupuy, executive director of the brand consulting firm Interbrand Canada. With a big event like the Olympics, he said, “the drawback is, it lasts for such a short period of time. In this day and age, that brand halo effect goes away much more quickly.”
Mr. Pelley also cited scheduling conflicts that have come to light in the course of planning coverage of the London Games. Because of the time difference, the consortium wanted Rogers to broadcast Olympic programming on tape delay during prime-time hours, which created a conflict with the broadcast of Rogers Cup tennis matches and Toronto Blue Jays baseball games. (Rogers has the broadcast rights to those games and also owns the Blue Jays.)
The announcement on Thursday calls into question what Bell Media will do if it continues with its plans to bid again.
“All I can say is we're very committed to the Olympics,” Bell Media president Kevin Crull said. “We're looking at all the options.”
Members of the International Olympic Committee came to Canada this summer for an informal meeting with broadcasters that are potential bidders for the Games. Those who decide to bid will travel to IOC headquarters in Lausanne, Switzerland, later this year or early next year to submit their offers.