Super Bowl ad ruling violated NAFTA: NFL
Drama over the Canadian broadcast regulator’s contentious Super Bowl advertising policy continues to run into overtime.
The National Football League testified at the U.S. Department of Commerce late Thursday — the same day the U.S. triggered renegotiations of the North American Free Trade Agreement — that the new rule violated copyright protections under NAFTA.
It was one of about 35 parties participating in a public hearing on U.S. President Donald Trump’s executive order on significant trade deficits. The testimony will be used to inform plans to “renegotiate harmful trade deals and more effectively deter and punish trade abuses when they occur,” according to the department.
The NFL takes issue with the Canadian Radio-television and Telecommunications Commission’s simultaneous substitution decision that, for the first time, enabled Canadians to watch high-budget American ads instead of substituting them for local commercials during the championship game. The NFL and BCE Inc. are fighting in federal court to overturn the policy, which came into effect last August.
NFL senior vice-president of public policy Jocelyn Moore testified that the policy, which only applies to the Super Bowl, severely restricted advertising revenue during the most-watched TV event in Canada, an important source of revenue for the league.
“This unexpected and arbitrary decision denies the NFL the ability to generate revenue from its Canadian copyright licence in the Super Bowl in the same ways as Canadian owners of copyright in other programs,” Moore said. “NAFTA guarantees that U.S. copyright-owners will be treated no less favourably than their Canadian counterparts. ... as such, Canada’s action is inconsistent with NAFTA’s national treatment requirement.”
She added that “Canada’s recent actions — directed at the Super Bowl and the Super Bowl alone — resulted in an immediate, direct and dramatic drop in audience for the NFL’s exclusive rights-holder in Canada in February 2017.” Audience dropped 40 per cent from 2016, although some credited the decline to the boring first half before the New England Patriots made a 25-point comeback.
Bell, which purchased the exclusive rights to broadcast the game in Canada for an undisclosed amount in the tens of millions, said it lost $11 million due to the CRTC policy. It also blamed the policy as a factor when it cut more than two dozen media jobs in January.
In court documents, Bell argues the CRTC had no jurisdiction to ban simultaneous substitution for a single program and that the final decision conflicts with existing regulations and retrospectively interferes with contractual rights.
The CRTC made the decision because of a small number of complaints from Canadians disappointed they couldn’t watch the buzz-worthy American ads. It noted that the Canadian ads were still available on Canadian stations.
But it seems Canadians jumped on the chance to watch the American broadcast on FOX, given the dip in ratings for Bell Media’s CTV, CTV Two and TSN. They attracted an average audience of 4.47 million viewers for the big game in 2017, down from 7.32 million on CTV in 2016, according to Bell.
The legal battle is expected to get its day in court this fall.