Justin Trudeau

Justin Trudeau lobbied by Marco Rubio and NFL to ban U.S. Super Bowl ads

In a couple of weeks, Canadians will be able to watch the U.S. Super Bowl feed with the U.S. commercials for the first time, but the NFL, Florida senator Marco Rubio, and an alliance of Canadian rightsholder Bell Media and several Canadian unions are involved in a last-ditch attempt to prevent that.

Back in July 2015, the NFL formally applied for intervenor status in Bell’s appeal of the initial January 2015 Canadian Radio-Telecommunications Commission (CRTC) decision against the practice of simultaneous substitution (simsub, which puts Canadian commercials on U.S. feeds for events being shown simultaneously on Canadian channels) during the Super Bowl. Under simsub, Canadians could go to Fox on their TV, but they’d be seeing the commercials shown on CTV (which just picks up the Fox broadcast but subs in its own ads). Under this new ruling, Canadians could watch the U.S Super Bowl commercials at the same time and on the same channel as Americans simply by tuning into Fox, which would significantly hurt CTV’s audience and revenue.

While that legal challenge is still being heard in Canada’s federal court of appeal, the league and its allies are now pursuing a different strategy as well; persuading Prime Minister Justin Trudeau to invoke Section 26 (2) of the Broadcasting Act for only the second time in Canadian history to dictate the continuation of simsub. The latest step there, as Bloomberg’s Josh Wingrove and Gerrit De Vynck report, is a letter to Trudeau that Rubio (R-Florida) and fellow senator Ron Johnson (R-Wisconsin) delivered to Canada’s ambassador to the U.S. on Dec. 20. It’s only part of the lobbying efforts, which are also coming from a variety of Canadian sources:

Rubio and Wisconsin Senator Ron Johnson wrote Trudeau’s ambassador in Washington on Dec. 20. The CRTC ruling “sends a troubling signal about the value Canada places on its largest trading partner, best customer and close friend,” the Republican senators said, urging a policy reversal.

Three of Trudeau’s own lawmakers have also spoken out against the ruling. They include the chairmen of two parliamentary committees on finance and foreign affairs, Wayne Easter and Bob Nault, as well as backbencher Ken Cardie.

“There is no doubt that the economic consequences of this flawed decision are significant,” Easter and Nault said in a letter to the regulator. “We are asking that the CRTC reverse its position immediately to ensure that our Canadian performers, producers, actors, and broadcasters are provided the same opportunity to showcase Canadian content in Canada.” 

In addition to the politicians, Bell is obviously against this, and they’re joined by Canadian union ACTRA (the Alliance of Canadian Cinema, Television and Radio Artists), the Association of Canadian Advertisers and more. Bell’s opposition is easy to understand; the Super Bowl is one of the most-watched Canadian television events each year, but if many viewers had the opportunity to watch on Fox (with the high-quality American ads rather than the more standard Canadian ones shown on CTV), they probably would.

That would hurt Bell’s bottom line substantially. A Bell-commissioned report obtained by Bloomberg estimated losing Super Bowl simsub would cost them $18 million Canadian ($13.6 million U.S.) annually. While a company-commissioned report should always be taken with a grain of salt, the losses would definitely be significant.

The other problem for Bell with this happening right now is that the diminished value of the Super Bowl would not be reflected in their contract. They signed a “multi-year deal” with the NFL back in 2013, and it’s unclear just how long that extends for, but it’s certainly through this year. That contract is about much more than the Super Bowl, but the Super Bowl is a big part of it, and if this change isn’t overturned, this year at least would see them paying what the Super Bowl was worth when simsub was allowed, not the much smaller amount it’s worth with simsub banned.

That speaks to why the NFL is so eager to intervene here. They want their global rights to be worth as much as possible, and simsub helps with that. Taking it out wouldn’t hurt them right now (as they’ve already made their money from Bell with the rights deal; Bell would be the one losing ad revenue), but it would hurt them when their Canadian TV contract next comes up for negotiations. That’s presumably why the U.S. politicians are involved as well; they’re looking to maximize the return for the U.S. business, the NFL.

Meanwhile, the Canadian politicians, actors and advertisers are involved because simsub revenues (from the Super Bowl and much more; the practice also extends to NFL regular season games, other sports, and broadcast networks’ scripted or reality shows) help to fund Canadian-made programming. They fear the loss of Super Bowl revenues, but their even bigger concern is that this would be the first step in taking out simsub altogether. If that happened, it would dramatically affect the Canadian television industry.

Both sides have somewhat of a point. The best argument the pro-simsub crowd has is that the CRTC’s decision is going to lead to actual lost value on both sides of the border. The audience that would be counted as watching Canadian ads is going to vanish; it’s not measured as watching Fox (although it is) because Canadian markets that get American signals don’t count towards the U.S. Nielsen ratings. That means the Canadian NFL broadcaster makes less, the Canadian NFL rights are worth less, and the NFL and its U.S. broadcaster don’t directly reap the rewards (although they really should, and they may eventually as viewership metrics evolve; if there’s a giant Canadian audience watching these ads, U.S. networks may eventually be able to demand they be included in pricing).

$13.6 million U.S. is not a trifling sum, and watching that money just vanish isn’t easy. The fears of a slippery slope and the overall end of simsub are somewhat reasonable to raise as well. This particular decision is specifically limited to the Super Bowl, but any expansion of the end of simsub would be a huge change (and without a replacement, a major blow) for Canadian television networks overall.

However, those calling for the end of simsub have solid points as well. It’s an old system, it’s one that doesn’t necessarily hold up in the age of Netflix and other streaming services, and arguments can be made that it’s held back Canadian TV. Simsub allows Canadian networks to buy U.S. programming rights cheaply, show it at the same time as the U.S. network, and reap the benefits; the CRTC forces them to invest some money in Canadian programming as a result, and they do show some Canadian shows (and a lot of U.S./Canada “co-productions”), but the Canadian primetime landscape on private, non-CBC networks is dominated by American imports, and simsub is a big reason why. Would different, Canadian content flop in those spots? The executives certainly think so, but simsub makes it exceptionally easy for them to pack primetime with U.S. shows. Without it, they’d have to take a different approach.

Of course, that’s discussing the idea of ending simsub overall, and that’s not even on the table right now. This is only for the Super Bowl, and there’s a solid case that the Super Bowl is different than any other simsub event and that ending Super Bowl simsub won’t necessarily create that slippery slope many fear. The difference is that Americans see Super Bowl ads that are content, not just ads; American companies deliver high-budget, high-concept ads that many look forward to watching as much or more than the game itself.

That’s not the case for advertising during any other program, and it’s not the case for the Canadian ads shown during the Super Bowl, which have usually been just the same ads you’d see at any other point during the year. The anti-simsub crowd has a strong case that it feels silly to prevent Canadians from watching U.S. Super Bowl ads on TV in real time. Yes, they can watch online on YouTube later, but that’s substantially different. Blocking people from TV content based solely on location feels odd in 2017, a year where you can generally see content regardless of borders (blackouts aside, but that’s a different issue).

It’s important to remember that this CRTC ruling was driven by the public, and driven by public complaints. Before the ruling, the agency estimated that 20 per cent of the 458 simsub complaints it received in 2013 were about the Super Bowl, and there’s much more prominent anti-simsub sentiment than just those who filed formal complaints (check Canadian Twitter sometime during a simsub the Super Bowl). The CRTC also doesn’t necessarily have to do what’s best for Bell, one of the telecoms it regulates, or for the NFL, an American business.

Moreover, dropping simsub wouldn’t necessarily completely bury Bell’s Super Bowl ratings, especially if the Canadian advertisers in question decided to start coming up with better, more content-like ads of their own. That’s not easy, especially given they’re working with smaller budgets than those who buy U.S. Super Bowl ads. However, Canadian Super Bowl ads have been less interesting for a long while thanks to simsub preventing a competitive marketplace. Removing it would make advertisers have to actually compete and appeal to viewers, and there could be some merits to that.

In the end, this may come down to Trudeau and whether he decides to invoke the Broadcasting Act or not. The only time that’s previously happened was in 1995, when Prime Minister Jean Chretien addressed the nation ahead of the Quebec separation referendum. This is a much lower-stakes situation, but it’s one that does still carry significant consequences for Canadian broadcasters and for the NFL. It seems unlikely that the court will rule in the favor of Bell and the NFL before the Super Bowl, or that Trudeau would decide to intervene on this front (pleasing the telecom and the U.S. politicians, but making a bunch of Canadian voters angry), but you never know. Bloomberg calls this lobbying effort a Hail Mary, and that feels about right. We’ll see where it lands.

[Bloomberg]

Andrew Bucholtz

About Andrew Bucholtz

Andrew Bucholtz is a staff writer for Awful Announcing. He also covers the CFL and other sports for Yahoo! Canada.

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