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Report On Business Competition Bureau gives green light to Rogers’ 12-year NHL rights deal

In late 2013, Rogers emerged the victor in a bidding war for national NHL broadcasts.

Fred Lum/The Globe and Mail

The Competition Bureau has given a green light to the 12-year hockey broadcast rights deal Rogers Communications Inc. signed with the NHL two years ago, saying it has not done competitive harm – at least, so far.

Because of its confidentiality rules, the Competition Bureau had not previously confirmed it was reviewing the deal. But in a decision released Wednesday, the regulator ruled that "the agreement has not, at this time, resulted in a substantial lessening or prevention of competition."

In late 2013, Rogers emerged the victor in a bidding war for national NHL broadcasts, edging out rival BCE Inc. and securing the near-exclusive right to air games until 2026. The deal shifted the balance of power in the lucrative television sports market, allowing Rogers's Sportsnet network to pull even with – and by some measures, ahead of – competitor TSN in the ratings race for the first time.

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But the bureau's stamp of approval is open-ended, noting that its decision was based on "the available evidence," after talking to advertisers, TV providers and distributors, as well as Rogers and the NHL.

"Should new and compelling evidence come to light that this or any other sports rights arrangement has harmed competition, the bureau will not hesitate to take action, as appropriate," the enforcement agency said.

The regulator says it chose to review the Rogers pact with the NHL because of its "duration, significance and exclusive nature," as well as the power Rogers wields thanks to its vertical integration – owning broadcast, distribution, Internet and wireless assets.

A spokesman for the bureau said the agency cannot confirm whether it received any complaints about the deal. The concerns it explored were whether Rogers could raise subscriber fees or advertising rates "above competitive levels," or whether it could shut out competitors by denying them access to "must-have" programming.

"We're pleased with the decision," said Aaron Lazarus, senior director of public affairs for Rogers, in an e-mail.

The decision notes that sports rights, as events that are almost always watched live, have taken on special status and value since the TV industry began facing challenges such as a growing thirst for on-demand content and expanded online streaming options.

Even so, the review found that viewers continue to see both Sportsnet and TSN as "must-have" channels, and that the ad rates paid are still "a function of ratings."

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That may be partly due to the fact that Rogers has yet to deliver the ratings bump needed to demand more money from advertisers. At the start of last season, the first under the new deal, Rogers was looking for a 20-per-cent increase in what it charges for ads during hockey games. As the Toronto Maple Leafs stumbled, ratings results were mixed. As a result, industry insiders expected Rogers would compensate its ad partners with "make-good" spots, and perhaps even lower what it charges for some ads this year.

"Our review indicates that post-agreement, advertisers do not feel captive to Rogers because, while space during NHL games is valuable, there are alternative ways to reach the 'hockey audience' through other programming," the bureau said.

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