Canadian fans will no longer be able to see American Super Bowl ads on TV if the new USMCA deal is approved, thanks to a provision in there requiring the overturning of a Canadian Radio-television and Telecommunications Commission ruling that banned simultaneous substitution, or simsub. That led to NFL commissioner Roger Goodell praising U.S. president Donald Trump;
“We greatly appreciate President Trump’s leadership and determination in bringing about a resolution to our intellectual property issue in Canada,” Goodell said in a written statement released by the NFL.
It’s definitely unusual to see a sports league’s commissioner specifically praising a head of state for a trade deal, and given the many controversies around President Trump, Goodell, and the NFL have taken some flak for that. It’s also interesting to see the NFL commissioner openly express support for a president who’s spent a lot of time bashing the NFL, whether over players kneeling in protest of social injustice or networks carrying on long-standing policies of not broadcasting the national anthem. That might lead to some backlash for Goodell from players and from Trump-critical owners, but the actual deal here is perhaps even more interesting, and it makes it understandable why Goodell sent this statement. The simsub provision in this deal looks like a significant win for the NFL and for Canada’s Bell Media (and one they were unable to achieve in court despite lengthy efforts there), but a loss for Canadian fans.
The CRTC ruling in question came in January 2015, but didn’t kick in until 2017. It meant that for the past two seasons, Canadian fans watching the Super Bowl on U.S. networks they get as part of their TV packages (most Canadian cable or satellite packages include ABC, CBS, NBC, and Fox affiliates from cities near the border) were able to see the U.S. ads actually shown on those networks. Before that ruling, Canadian Super Bowl broadcasters were able to use the simsub practice they use on other broadcasts shown on both U.S. and Canadian networks (NFL playoff games, scripted or reality TV series, and more), where viewers watching the U.S. network have the U.S. ads replaced by the ads shown on the simultaneous Canadian broadcast. (It actually involves switching out the entire broadcast, which is why Canadian viewers see Global watermarks on something like NBC’s The Good Place, even if they’re watching it on NBC.)
Simsub has been around in Canada since 1972, at the behest of Canadian broadcasters who wanted to make money off rebroadcasting American programming instead of creating their own programming, and by the late 1990s, it meant that most Canadian networks with rights to U.S. series aired them at exactly the same time as the U.S. networks so they could capitalize off simsub. Whether the larger idea of simsub is a good one or not is debatable (broadcasters argue that it lets them make money they can invest in Canadian content, but some viewers argue that it’s providing too much incentive for networks to just air U.S. programming and not develop enough of their own), but where it’s become the most controversial is around the Super Bowl.
Most ads, whether Canadian or American, aren’t programming that viewers actually want to watch, so there aren’t a whole lot of people outraged if the broadcast of Elementary they’re watching (remember, identical in every way except for the watermark and the ads) carries a Tim Hortons ad instead of a McDonalds one. But the high-budget, high-concept U.S. Super Bowl ads are a big part of the game and the cultural conversation around it for many viewers, and they’re even more important than the game for some.
And until 2017, there was no way for Canadians to legally watch those ads on TV as part of the broadcast; instead, they were stuck with the Canadian commercials, which saw a few higher-concept attempts but were largely still the same low-budget commercials seen during any other programming. There were websites and such for watching the U.S. ads after the fact, but that’s much different than seeing them live during the game on the screen you’re watching the game on, and that led to many complaints to the CRTC. And the proliferation of social media (and social media discussion of Super Bowl ads) in the last decade or so really intensified those complaints, and led to the 2015 ruling.
Of course, Bell (the parent company of CTV and TSN, which paid a lot of money for the NFL in 2013 before the simsub ruling and then again in June 2017 after it) hated this move, and understandably so. The Super Bowl’s annually one of the biggest broadcasts on Canadian TV, sometimes the biggest, and CTV was able to charge around $170,000 Canadian (around $132,000 U.S. at current rates) for a 30-second spot in 2014; that’s well below the $4 million U.S. for a U.S. spot of the same length that year (which has now risen to $5 million for a 30-second spot), but it was a big deal in Canadian broadcasting, and Bell cited projected Super Bowl losses in January 2017 layoffs, saw a 39 percent audience drop that year, and saw another audience drop in 2018, with an estimated loss of $11 million Canadian ($8.5 million U.S.) from that latter one (despite their various attempts to create actually-engaging ad content and even offer prizes to those who chose to watch the Canadian feed). So yeah, not great for them.
But what’s really interesting is the NFL involvement here. The end of Super Bowl simsub didn’t have a direct impact on the league, especially not at first, but it did presumably reduce the value of their rights in Canada. We don’t actually know how much Bell paid for NFL rights in June 2017 and whether the projected lower revenue for future Super Bowls came into that, or whether both Bell and the NFL figured they’d win in court and the CRTC ruling would be overturned, but a no-simsub Super Bowl is less valuable for Canadian broadcasters. And it’s also worth noting that the end of Super Bowl simsub led to essentially “lost” viewers, or viewers that didn’t count for ratings or advertising revenue; the Canadians who chose to watch on U.S. channels didn’t count in the Canadian ratings or the U.S. ratings, and that’s not good for broadcasters on either side of the border.
So it makes some sense that the NFL would oppose the end of simsub in an effort to maximize its rights value. And they’ve been doing so for a long time, applying for intervenor status (which they got) in Bell’s appeal back in 2015, lobbying Canadian PM Justin Trudeau back in 2017, and helping with the last-ditch court effort earlier this year to seek a stay of the CRTC ruling. And now, they’ve got what they weren’t able to achieve through Canadian courts or lobbying of Canadian officials by lobbying U.S. officials to make this a condition of the trade deal. And they’ve probably helped their future bottom line by doing so, boosting the value of their future rights.
But this move has led to the NFL annoying their Canadian fanbase by restricting their choice (they likely don’t care about that much, but still). And, more importantly, it’s led to them having to play nice with President Trump and congratulate him publicly, which has created more U.S. backlash for them. Is that worth whatever the league gained from this? Maybe, maybe not. But it certainly fits with the larger NFL strategy of making whatever decisions will squeeze out the most revenue, even if those decisions hurt the fan experience.