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NHL-Rogers deal a positive for some advertisers – but pricing a concern

NHL commissioner Gary Bettman (left), Rogers Communications CEO Nadir Mohamed (centre) and Rogers Media president Keith Pelley during a conference announcing a 12-year national broadcast and multimedia agreement between Rogers Communications and the NHL.

Fernando Morales/The Globe and Mail

The new $5.2-billion deal Rogers has inked to snap up National Hockey League media rights in Canada was only finalized on Sunday – meaning that the company has not yet begun speaking to the advertisers and media buyers whose budgets it will be courting starting next season.

But many are already viewing the deal with cautious positivity.

Kraft Canada, an NHL sponsor, is launching its annual Hockeyville promotion on Wednesday that has involved complex media deals with the CBC and TSN to advertise itself to hockey families.

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Kraft is just starting negotiations to renew its contract as an NHL sponsor, and the company will be looking at how the Rogers deal affects its plans going forward.

"For a deal as big as this, that is record-setting for all parties … The one thing that it does say to me is that it reaffirms Canadians' love for the game of hockey," said Jack Hewitt, vice-president of marketing insight and services at Kraft Canada.

The company has expanded Hockeyville to include more online content over the years, and sees the possibility of a benefit in Rogers' push to sell advertising across many platforms at once – including mobile devices, online, print, radio and television.

"Any time you can integrate a program across multiple platforms it provides value for sure," Mr. Hewitt said.

Bank of Nova Scotia, another sponsor, also saw it as a positive move.

"We're excited to see how we can work with Rogers and the NHL to extend our reach and community hockey brand story," Scotiabank's senior vice-president of Canadian marketing, Duncan Hannay, said in an e-mail. "This deal positions NHL hockey for continued success in Canada, which bodes well for league sponsors like Scotiabank. We have enjoyed strong partnerships with all the participants, including the CBC, and expect to build on these relationships moving forward."

However, there was room for caution as well: While there is greater efficiency for advertisers in the ability to negotiate with one media partner for ads across many different platforms, it also could make some advertisers vulnerable to higher prices.

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"The bigger spenders will look at this opportunistically and say boy I can sense the rates going up already," said David Kincaid, president of Toronto marketing consultancy Level5 Strategy Group.

"What is important to remember is that both the CBC and TSN also were able to provide multiplatform activations, so this is not new," said Caroline Gianias, chief trading officer at media buying and planning agency Aegis Media Canada. "The one-stop shop is really about dealing with one vendor versus three."

Ms. Gianias said dealing with one vendor could mean more ability to work on integrated marketing that takes advertising beyond just banner ads and 30-second spots, but she is worried about pricing.

"My concern is that those advertisers who have long been partners with the CBC and TSN may be impacted negatively by this move," she said. "A $5-billion price tag over 12 years is a lot of money and no doubt Rogers will be looking for ways to have this cost mitigated. As advocates for our clients, our position is that any cost increases to participate in hockey needs to be very clearly justified and validated to demonstrate that this increase is bringing incremental value to our clients, otherwise, it's simply a move to make more money on a very premium property."

Nancy Surphlis, managing director at media buyer OMD, also expressed concern that big advertisers looking to have a presence in the highest-profile NHL events might be asked to essentially bundle their ad buys to drive revenue to less in-demand games.

"For big hockey clients, there may be a bit of sticker shock from what they're used to," Ms. Surphlis said. "… At the end of the day, there's only so many people who are going to watch hockey. The way it sounds, hockey could be on almost every night of the week. Some of the games are going to pull much greater audiences than others."

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However, she also saw a possibility for smaller advertisers, who have not had the budgets to place ads alongside hockey games in Canada, to get in on some of the lower-profile broadcasts as the ad inventory in NHL properties in Canada grows with the Rogers deal.

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