Rogers says NHL’s profitable
Even without any Canadian teams in this year’s National Hockey League playoffs, Rogers Communications Inc. expects to make a 10 per cent return on its NHL rights investment this year.
Speaking to media following the company’s annual general meeting here Tuesday, chief executive Guy Laurence said that figure is an estimate that depends on how the playoffs go. However, he said this year’s spending on NHL rights “will absolutely, definitely, without any shadow of a doubt, make a profit, period,” although likely a slightly smaller one than last year.
Last year’s return on NHL rights was “in excess” of 10 per cent by a couple of percentage points, he said.
“Trust me. It makes money,” Laurence said. “We’re happy with it.”
Laurence’s comments came a day after Rogers reported a first-quarter profit that was 2.75 per cent lower than the previous year, despite increasing operating revenue thanks to growth in its wireless and business solutions divisions. Rogers blamed restructuring costs and a tough advertising environment affecting its television channels, radio stations and magazines.
During a conference call following Monday’s, Laurence downplayed the impact of the lack of Canadian teams in the NHL playoffs on ratings and advertising revenue, saying the good performance of the Rogers-owned Toronto Blue Jays is helping to even things out. Rogers spent $5.2 billion in 2013 to secure the exclusive rights to NHL broadcasts.
“It’s a 12-year deal. This is Year Two. The odds of there being no Canadian teams for the next 10 years are — well, I wouldn’t even like to predict the odds," he said. "We should see this in context.”
Gordon Hendren, president of the research firm Charlton Strategic Research Inc., which tracks hockey viewership, said a 10 per cent return on investment this season would be impressive, but not
Toronto drives hockey audiences on Hockey Night in Canada more than any other Canadian team. Hands down.
impossible if advertisers are locked into long-term contracts. He said he agrees with Laurence’s assessment that the possibility of more playoff seasons without Canadian teams is small — the last time there were no Canadian teams in the NHL playoffs was 1970.
“There’s no question it’s a risk,” he said. “But this is highly unusual. I would not expect this to happen again.”
Rogers Media accounts for about 15 per cent of the telecommunications giant’s total revenue, with sports making up more than half of that.
Laurence also dismissed speculation senior management at Rogers is unhappy with the performance of the revamped Hockey Night in Canada hosted by George Stromboulopoulos. This month, Rogers Media terminated senior vicepresident of NHL production Gord Cutler in the wake of a ratings drop.
Asked whether Rogers is unhappy with Hockey Night in Canada and considering making changes, Laurence responded with a flat “no.”
Hendren said ratings for Hockey Night in Canada mostly come down to one thing that has nothing to do with who’s hosting it: How well the Toronto Maple Leafs are doing.
“In terms of hockey viewing, Toronto drives hockey audiences on Hockey Night in Canada more than any other Canadian team. Hands down, no debate,” he said. “The fact the Leafs are in a rebuild has hurt, no question.”