BUSINESS

Rogers NHL Deal Will Mean Higher Cable Bills: Prof

11/27/2013 11:23 EST

Rogers Communications' exclusive $5.2-billion deal with the National Hockey League is seen as a “strategic coup'' in the fight by telecom companies to stop the drift of customers away from traditional wireless and cable TV providers.

But the move could also mean higher cable bills for Canadians, industry observers warn.

We’ll see a lot of bundling or extra charges for premium channels,” UBC Sauder School of Business professor James Brander told the Vancouver Province.

“I’m sure Rogers will be pushing hard on all those buttons because they’ve got a lot of money to recoup. Whether it means having to buy stuff you don’t want or premium channels, your cable bill will be going up.”

Macquarie Securities Group analyst Greg MacDonald called it a “strategic coup,'' saying it's like an insurance policy for Rogers as it becomes more difficult to pull in cable TV and wireless subscribers.

“But more importantly it ensures control of the most valuable live content in the Canadian market for the long term, which benefits wireless economics,'' MacDonald said in a research note.

Sports marketing instructor Vijay Setlur said the deal is aimed at mobile device customers.

“For the sports fan who has got the full ensemble of television packages like digital cable, it's fine, they'll get everything,'' he said.

“But with Rogers controlling everything, perhaps, many people will have to restore their cable service to get that content on their mobile devices given that Rogers controls all of that,'' said Setlur, who teaches at York University's Schulich School of Business.

The deal begins with the 2014-2015 hockey season and leaves Bell's specialty sports channel TSN out of the mix.

“We submitted a bid we believed was valuable for the NHL and appropriate for our business, but were ultimately outbid,'' Bell Media spokesman Scott Henderson said in an email.

Henderson wouldn't say if there will be job losses at TSN as a result of the deal, but added Bell is open to Rogers selling some rights to broadcast playoff games.

“We've worked successfully with other broadcasters in the past in delivering hockey, Olympics and other sports content and would be open to doing so here,'' Henderson said.

Rogers' deal to acquire NHL hockey content comes about six months after competitor Bell won regulatory approval to buy up a number of Astral's Media's TV and radio stations in a $3.4-billion acquisition. Both big telecoms have no shortage of media content to put on TVs and mobile devices to attract customers.

Rogers will sublicence the rights to Hockey Night in Canada to the CBC and TVA, a private-sector francophone network in Quebec.

CBC president Hubert Lacroix said in an internal memo “while this deal will result in job losses, the staffing impact would have been much greater had we lost hockey entirely, as CBC is still producing hockey.''

“Rogers takes on all of the revenues from all of the properties,'' he added.

Canaccord Genuity analyst Dvai Ghose said the deal should be profitable for Rogers due to revenues from advertising and from the resale of games.

Ghose also said the deal could put Rogers in a better position if broadcasters are forced by the federal government to give consumers more choice in picking their channels, given the “must watch'' nature of the NHL for many Canadians.

Huffington Post Canada with files from The Canadian Press

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