Super Bowl: Game, Trump, NAFTA

WHY HAVE NAFTA, TRUMP MIGHT SAY, IF BROADCAST RIGHTS ARE BOWLED OVER BY CANADA’S REGULATOR?

Nobody wants to hear this, least of all sports fans, but I have bad news: There’s a NAFTA and Trump angle to the Feb. 5 Super Bowl. Too much, I know. But here’s the background. First, it is now clear the time clock has run out on the Trudeau cabinet’s ability to rescue CTV’s Super Bowl broadcast from the CRTC’s decision to run its regulatory steamroller over the network’s legal and entrenched property rights. This will cost CTV millions. But it could also become another twitch in Canada-U.S. trade relations.

With no help from the government, CTV is fighting back with aggressive game coverage over three Canadian networks and 12 hours of non-stop game-related content. In an announcement Thursday, CTV said Nissan Canada is returning as a major sponsor for what the network calls “the biggest event in Canadian broadcasting.”

This year’s Super Bowl extravaganza certainly seems destined to be one of the greatest of them all. The National Football League championship has been the biggest media show on earth for decades, but injections of Trump political fevers threaten to blow this year’s battle into the ratings stratosphere.

The New England Patriots facing the Atlanta Falcons on the field are reason enough to watch the Super Bowl. But this year the game will be accompanied by sideline infusions of hype from the greatest political show on earth, the Presidency of Donald J. Trump.

Tens of millions will tune in to see whether half-time megastar Lady Gaga makes it through her show without taking shots at Trump and what the reaction might be among the 72,000 fans in Houston’s NRG Stadium. Then there’s Patriots’ veteran quarterback Tom Brady. Will his friendship with Trump mess with the psyches of fans or his teammates — or with his opponents? Maybe Falcons’ quarterback Matt Ryan can taunt Brady with a few Trump heckles. “I’m gonna make the Falcons great, Brady!” It will all be great. But thanks to Jean-Pierre Blais and his CRTC, Canada’s CTV network will not be able to fully benefit from this year’s elevated Bowl buzz. The CRTC, arbitrarily and possibly in breach of broadcasting law, and NAFTA, has denied CTV its legally acquired exclusive rights to the game in Canada. In return for those rights, CTV is allowed by law and by the NFL to simultaneously substitute Canadian commercials in place of the U.S. commercials.

The practice, known as sim-sub, has been part of Canadian broadcasting for decades. But not for this year’s Super Bowl. During next Sunday’s game, the CRTC has ruled the U.S. version of the Super Bowl, with U.S. commercials, will be allowed into Canada via Fox. As a result, CTV will see millions of viewers switching away from CTV.

The 2015 Canadian Super Bowl audience peaked at 9.23 million, with about 20 million tuning in at some point to watch. How many Canadians this year will turn to Fox instead, depriving CTV of its contractual and copyright ownership of Canadian rights to the game? One source predicted CTV’s audience slippage will run to double digits, although likely less than 50 per cent. At 30 per cent, CTV — which is owned by BellMedia — could see its audience slide below 7 million.

The monetary loss to CTV will be calculated after the game. The rates it charges for commercials are based on pre-game estimates, but the values will be adjusted afterward based on actual audience levels.

The lost audience means less money for the NFL. The league has taken the CRTC to court claiming the regulator exceeded its powers, breached the league’s exclusive contracted agreement with CTV, and contravened Canadian law protecting the NFL/CTV copyright arrangements.

One key claim is that the CRTC acted to subvert one specific program, the Super Bowl, using a provision that only allows the regulator to make decisions regarding “programming services.” The NFL court case also notes that sim-sub exists within the context of the Canadian-U.S. Free Trade Agreement and “was granted on the assumption that simultaneous substitution would remain in place for all retransmitted programming to protect the interests of foreign copyright holders.”

Which brings us to NAFTA, where the same provision remains in place under Article 2006. One clause says that “retransmission to the public of program signals not intended … for free, over the air reception by the general public shall be permitted only with the authorization of the holder of copyright in the program.”

NAFTA, in short, serves as some protection for the NFL. But the CRTC has arbitrarily overturned the NAFTA sim-sub regime for the Super Bowl.

Will the president (an avid follower of football and friend of quarterbacks) get wind of the fact that Canada’s broadcast regulator has arbitrarily stripped the NFL of its Canadian broadcast rights, thereby reducing revenues to the owners of America’s football industry and its American workers?

What’s the point of NAFTA, Trump might say, if clauses that protect the rights of an American company and its Canadian broadcaster can be bowled over by a runaway regulator?

Even Barack Obama’s trade rep fired off a letter to Ottawa, asking the Trudeau cabinet to overturn the CRTC decision, in part on NAFTA grounds. The cabinet failed to block the CRTC decision, and time has run out on the clock.

The future of Canada-U.S. trade relations will not ride on the Super Bowl. But it will not make them any smoother. Stay tuned. This game is far from over.