Considering the first broadcast deal for Hockey Night In Canada was concluded over nine holes of golf in 1929, and saw advertising man Jack MacLaren agree to pay $500 to Toronto Maple Leafs owner Conn Smythe for radio rights to Leaf games, the $5.232-billion Rogers Communications will pay the NHL over 12 seasons is a seismic shock for the league’s economic landscape.
Actually, forget that first Hockey Night deal, which was for Foster Hewitt’s broadcasts for one season. The new deal is a seismic shock even compared to the NHL’s current Canadian TV rights agreements, which bring in about $190-million from long-time partners CBC, TSN and RDS. Next season, TSN and RDS will fade from the national-broadcast picture.
At present, the NHL brings in $200-million (U.S.) per season in its 10-year U.S. TV contract with NBC, bringing the total to $390-million in combined currency. That breaks down to about $13-million per year for each of the league’s 30 teams. But next season, each team will get $14.5-million (Canadian) from the Rogers deal, plus $6.6-million (U.S.) from NBC, for an annual total of $21.1-million. That is a blessed windfall for perpetually struggling teams such as the Phoenix Coyotes and Florida Panthers.
So, NHL commissioner Gary Bettman, just what are you and the team owners going to do with all that money? “We’re going to pay half of it to the players,” he said Tuesday with a smile.
That’s because NHL players get 50 per cent of all hockey-related league revenue through the salary cap in their collective agreement, so they get to share the riches with the owners. Fans, meanwhile, may face increases in their cable television and Internet bills to help Rogers pay for the deal.
While Rogers promises that Canadian hockey fans will be able to see more games on more channels and devices than ever before, with no regional blackouts, those in Quebec may get an added benefit. The prospects of the NHL adding another team in the province, with a return to Quebec City, grew brighter with this deal, even if Bettman danced away from subject.
“It’s not something we are embarking on in a formal process,” Bettman said, which is his stock response to any question about expansion or relocating failing franchises
But Pierre Karl Péladeau, the Quebecor tycoon who owns the TVA network that landed the French-language rights in a sub-contract from Rogers, just happens to hold the lease on the new arena that is under construction in Quebec City.
And since much business gets done in the NHL on a you-scratch-my-back basis, it doesn’t hurt to have Peladeau indirectly forking over $200-million or so annually to the league for TV rights.
This deal is yet another home run for Bettman, continuing a hot streak that started last summer when he finally settled the ownership situation in Phoenix and then found owners for two other financial sinkholes, the New Jersey Devils and the Panthers. This takes the league, which earned $3.3-billion (U.S.) in its last full season before the 2012-13 lockout, much closer to its goal of $4-billion annually, which Bettman told the owners last spring he hoped to achieve within three years.
John Collins, the chief operating officer of the NHL, said the new Canadian TV deal emphasizes “the strength of the league.” And Bettman thinks there is a lot more money out there for the NHL. “I have understood what I believe to be the potential of this great game,” he said. “I think we still have tons of runway in front of us.”
The first opportunity will be cashing in on the French-language regional TV rights for the Canadiens. The contract currently belongs to BCE’s RDS, but it is finished at the end of this season. If BCE wants to salvage something from the bomb Bettman dropped on TSN and RDS, it may start a bidding war with Peladeau that would add yet more to the NHL’s growing coffers.
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