The state of the Canadian media isn’t good, and the latest cuts have strong connections to sports coverage. Rogers Media announced Monday they plan to cut 200 jobs across their TV, radio, and publishing divisions, with a union rep telling CTV’s Katie Simpson that the layoffs will happen in February and are expected to focus on TV. This follows last week’s news of newsroom consolidation and up to 90 jobs lost at Canadian newspaper chain Postmedia, and it also comes in the wake of 110 jobs cut by Rogers last year, 380 cut by rival Bell Media in November, 167 cut by Hamilton’s CHCH TV amidst bankruptcy in December (with 71 offered jobs at a new company), and 30 cut by Shaw Media last year. The Guelph Mercury also announced Monday it’s ending its print edition, which will lead to the loss of 26 jobs.
Rogers is most known in the sports world for their Sportsnet TV, radio, magazine and online properties (plus their ownership of the Toronto Blue Jays and their 37.5 per cent stake in Maple Leaf Sports and Entertainment, which owns the Leafs, Raptors and Toronto FC), but the company’s media division also owns the City and OMNI TV networks, over 50 radio stations, and over 40 magazine titles. It’s also part of the much larger Rogers Communications, which offers cable, internet and phone services. Thus, while these cuts are definitely going to impact Rogers’ sports coverage, this isn’t completely a sports story. However, one of the major reasons for these cuts comes directly from the sports world, as many are attributing this to the massive NHL deal Rogers is locked into.
(Update: Rogers spokesperson Andrea Goldstein denies the NHL deal had an effect here, telling Awful Announcing, “Today’s announcement at Rogers Media has nothing to do with hockey. The NHL is a driver for us and has contributed positively to our bottom line.“)
Saddled with a boondoggle $5.2 billion NHL broadcast rights deal, Rogers announces its laying off 200 people…https://t.co/qXLIoieZIb
— Paul Wiecek (@PaulWiecek) January 25, 2016
The NHL contract certainly wasn’t the only factor in this situation, but it’s worth discussing its impacts regardless (and it’s worth noting that Rogers’ contract fee in 2014-15 was the lowest it will be over the deal, as it rises by 5 per cent each year; that’s part of the positive contribution to the bottom line). Rogers spent $5.2 billion over 12 years in 2013 to lock up those national rights in an attempt to shift the Canadian media landscape and best rival TSN (owned by Bell Media). On some levels, they’ve succeeded; they’ve managed to make “Canada’s most-watched sports network” an actual argument (and one that wound up in Sportsnet’s favor for 2015 as a whole thanks to the success they found with the Blue Jays’ fall playoff push and playoff performances), and they’re on a much more level playing field with TSN than they ever were pre-NHL deal, with both now competing over statuses like “first 4K broadcast.” The NHL ratings haven’t been what Rogers hoped for, though, dropping substantially year-over-year in both the regular season and the playoffs in 2014-15 (the first season of this new deal), and they haven’t wiped out TSN, which has found some significant success with other properties (but is still facing its own challenges).
While Rogers is making much more money off the Jays and their audiences than they expected, they haven’t pulled in what they targeted from the NHL. Their long-term, highly-expensive contract (by comparison, NBC paid $2 billion for 10 years of American NHL rights in 2011; yes, that’s in U.S. dollars, but it’s still much cheaper even after the conversion, and they’re reaching much higher audiences for the Stanley Cup Final) may be hurting their bottom line. The expensive rights and subsequent job cuts storyline is very similar to what we’ve seen in the U.S., especially with ESPN, and it’s a reflection of the new world order for sports. Live sports programming is still incredibly valuable both for its ratings and for its DVR-proof status, but certain live sports programming isn’t worth obtaining at all costs, especially in a tough advertising climate. Rogers paid a premium to lock down the NHL and to take total control of its national broadcasts in Canada (some Saturday night games still air on CBC under a sub-licensing agreement, but Sportsnet has editorial control of those and keeps the ad revenue), and it’s possible that could pay off in the long run, but it doesn’t look like a great investment so far. It’s possible Rogers is making some money off the NHL, but that likely depends on how you attribute the various revenues and expenses, and it’s clear the deal hasn’t worked out as well as they would have hoped.
It’s far too simplistic to say “The NHL deal caused these cuts,” though, and many of these cuts may not be made in sports. Goldstein said in a statement that “The media industry continues to experience significant pressures from a softening advertising market, fierce competition from global players, and shifting audience consumption habits,” and she’s right; it’s a rough time in general for print, radio, TV, and digital media, and Rogers has significant outposts in all of those mediums. In fact, the sports properties are probably performing better than most; the company bragged about their 2015 success across TV, radio, print and online sports coverage in a release earlier this month. That certainly won’t make them immune from cuts, but given what we know about the struggles of local non-sports TV (the subject of ongoing hearings from the Canadian Radio-Television and Telecommunications Commission, which heard Monday that half the country’s local TV stations might be off the air by 2020 under the current funding model), this can’t all be blamed on sports. Some of those struggles are thanks to cord-cutters, though, which will have their own impact on Sportsnet’s bottom line.
It’s going to be interesting to see just what direction Rogers goes with these cuts and how heavily they impact sports. The company’s already cut back some of its sports operations, and it may cut them further; if these cuts are in fact TV-focused, there will undoubtedly be cuts at the City and OMNI TV networks, but Sportsnet may see them too. We’ll also see if these extend to radio (where Sportsnet has big stations in both Toronto and Calgary) and print/online. Rogers Media’s facing the declining subscriber and rising rights fees challenges we’ve seen in the U.S. sports TV landscape, and they’re also facing the general challenges that seem to be hitting all forms of Canadian media. How they address these issues will make a substantial mark on the Canadian media landscape.