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CBC & NHL To Make A Major Sports Announcement

The CBC has called a news conference today at noon EDT. concerning a significant development related to the CBC and the NHL.
Sounds like an agreement is in place.

update 10:30am, from the Globe and Mail,

The CBC and National Hockey League will announce a new television agreement today that will keep Hockey Night In Canada on the air well past the 2007-08 season.
The Globe and Mail has learned that the new rights is worth about $100-million a year, an increase from the $65-million that the CBC is now paying the NHL.

more

update 12:16pm, from the CBC,

The CBC and NHL announced a new television deal Monday that will keep Hockey Night in Canada on the air until 2014.

The six-year broadcast deal, which includes national English-language broadcast and multimedia rights to NHL games in Canada, will begin when the current agreement between the CBC and the league expires after the 2007-08 season.
The CBC will maintain exclusive Canadian coverage of NHL games on Saturday nights including traditional double-headers and more regional telecasts.

continued

added 3:45pm, added the press conference transcript…

Thank you for coming. I have on my immediate right Gary Bettman, NHL commissioner, and Richard Stursberg, executive vice president of CBC Television. They have a couple of comments. I’ll throw it over to Gary in a moment. Once they finish speaking, happy to open it up to questions from both the floor here and our callers on the teleconference line. Over to Gary.

COMMISSIONER BETTMAN: Thank you, everyone, for joining us here today either in Toronto or via conference call throughout the country.
Some parts of my job never grow old. One part obviously is having the honor of presenting this magnificent trophy each year to the captain of the team that wins the Stanley Cup championship, and another is being able to play a role in carrying on the tradition that is vitally important to Canadians, namely bringing Hockey Night in Canada to more than a million Canadians each Saturday night.
Hockey Night is the longest-running series in Canadian broadcast history, and the most popular weekly sports program in Canada. So it is remarkable to recall that the first Hockey Night broadcast was on November 1,1952. Prior to then the network had joined games in progress during the second period, and there was irregular coverage during the playoffs. Imagine at that time there was no Insider, there was no Coach’s Corner, no Ron and Don, no Satellite Hot Stove, no After Hours.
Indeed, we have truly come a long way in over 50 years and we have come a long way since the first broadcast which was the Bruins against the Leafs from Maple Leaf Gardens. We have gone on from partial games in the regular season and occasional games in the Stanley Cup playoffs to the grand moment coming this Saturday when Hockey Night in Canada will have both games of the doubleheader in high-definition television. That will obviously enhance what is already a terrific sports product.
The sounds, the visuals, everything surrounding the game, which CBC has always done such a remarkable job in covering, will now be enhanced through technology, namely high-definition television. This will take the viewer experience for our game yet another step higher.
Of course it is a delight, honor and privilege for me to announce we have reached an agreement with the CBC for a six-year extension of our current agreement. It begins in the 2008-09 season and extends through the 2013-14 season. This is a negotiation that has been in the works for almost a year, a testament to our tenacity, our desire to get it done, some tough negotiating from the CBC side. But in the end this is where we felt hockey should be and we’re delighted. Obviously, it’s also subject to the approval of the NHL Board of Governors. That’s something we’ll attend to at the June board meeting.
This is the fourth time in my 14 plus years as commissioner that I’ve been able to make such an announcement that we’re continuing our long-standing partnership with the CBC for Hockey Night in Canada. Over the course of our last agreement, ratings, viewership has increased by over 15%. Compared to five years ago, a quarter of a million more people are watching the Hockey Night Saturday early game.
Why are fans watching? Why do they continue to make this the extraordinarily popular program that it is? I think that’s in large measure due to CBC’s commitment to the game. With Saturday Night Doubleheaders since 1994, with innovative pre and postgame programming, with Hockey Day in Canada, with the suspenseful springtime ritual that is the Stanley Cup playoffs, the CBC and Hockey Night and Canada have solidified the generations-long connection between a great game and a great nation. It is a relationship that we cherish. I am overjoyed that it will continue.
This relationship would not be possible without the cooperation and the commitment of the CBC over all these years. I would like to thank executive vice president of CBC Television Richard Stursberg for all you and your organization have done for our game. We are looking forward to moving into the future. Thank you for all you’ve done again. I turn the podium over to you.

RICHARD STURSBERG: Thanks, Gary.
Well, the tradition certainly continues. This is the first day of a new and very exciting future for us and for the NHL. Hockey is our national passion. It’s part of our national fabric and a continuing part of Canadians’ shared cultural experience. For more than half a century, CBC TV is where Canadians have turned to indulge that passion. The CBC is hockey’s home, especially on Saturday nights. We’re very pleased and very proud we will continue to be the place Canadians turn for the very best in hockey entertainment.
As you know, the CBC’s relationship with hockey predates television itself. Foster Hewitt called the first coast-to-coast radio coverage in 1933, Red Wings against the Leafs. As Gary said, our first televised full-length English language NHL game was November 1st, 1952, Boston at Toronto. At that time Conn Smythe wasn’t sure anyone would be interested in televised hockey. That season we acquired the rights to the Leafs for a hundred bucks a game. Without providing any details, I can assure you times have changed.
Just to provide a quick overview before Gary speaks again and we answer some questions, the new deal means more games than ever for Canadian hockey fans. It includes live and on-demand video streaming on CBC.ca. We’re also planning more games in high-definition. Both the east and western games will be in high-def. We continue to have exclusive Saturday night coverage, including doubleheaders and regional telecasts. We’ll continue our extensive playoff coverage. We’ll continue building on the success of Hockey Day in Canada. We’ll be the exclusive Canadian broadcaster of the NHL All-Star Game and the NHL Awards. Of course, we’ll have exclusive Canadian coverage of the Stanley Cup final. A fantastic package overall.
I should add this agreement really helps point the way to the future in how we can use technology to bring the game to the fans virtually any way they want it. That’s something we’re just starting to explore in detail. The possibilities are nearly endless and very exciting. We think it’s good for us, good for the league, and most importantly it’s great for the Canadian fans.
Now I think, Gary, we can take any questions.

Q. Was there another network involved in the negotiations?
COMMISSIONER BETTMAN: In formal negotiations, no. We have an exclusive negotiating period under our current agreement with the CBC. But before we got serious, I was given an opportunity to see if there was interest in the marketplace from other parties without specifically negotiating. I satisfied myself that there was.
But on balance, as we concluded our negotiations, we were extremely comfortable and pleased with the arrangement that we were able to reach with the CBC.

Q. Is there any change in the playoff rights? Does CBC still have rights to all Canadian-based teams?
COMMISSIONER BETTMAN: Actually, the CBC is entitled to select in the first round the first, second, fourth and sixth series. So if we decide to do a national cable package, and obviously we’ll have negotiations on that, the third, fifth, seventh and eighth packages will be available for the other package, which means if there are more than two Canadian series, the Canadian series may be carried on the national cable outlet.

Q. I know you probably haven’t gotten around to what kind of games are going to be shown, but is there going to be a continuation of this year’s policy of having more regional games? Will more games, other than Toronto games, be shown nationally?
COMMISSIONER BETTMAN: That option is available to the CBC. It’s really a question as to how you want to schedule and you can answer the question.

RICHARD STURSBERG: We’re going to continue obviously to have an emphasis on Toronto games. We have an opportunity to be able to do more regional games. We’re looking forward to doing that as well.
Q. Do you feel that’s fair to, for example, Canadiens fans outside of Montréal?

RICHARD STURSBERG: Do I think it’s fair to Canadian fans outside of Montréal? I’m not sure I understand the question.
COMMISSIONER BETTMAN: Maybe I can answer the question differently.
We anticipate between the mix, between Leafs games and Canadiens games, the CBC on Hockey Night will be able to carry up to 23 Leafs games and up to 17 Canadiens games. There may be a tad fewer Leafs game and a tad more Canadiens games in the mix. With respect to the other Canadian teams, we have also provided for a couple of extra in each case as well. The mix may not quite be what it’s been in prior years. It may be varied a little bit.

Q. Here in the U.S. hockey is not a priority. The kind of TV the league may want down here may take serious compromising of the game itself. Mr. Bettman, can you say unequivocally that the NHL will not put the shootout into the playoffs during your tenure?
COMMISSIONER BETTMAN: Absolutely, we will not put the shootout in the playoffs during my tenure.

Q. When did serious negotiations begin? How long did they take?
RICHARD STURSBERG: Well, we started I guess it would be almost—I think our first meeting was April of last year. We had our first conversation in April of last year. Normally these negotiations were going to begin in July of this coming year. It’s what the contract called for. We had a chat in April, decided we’d settle down to it. I think it’s been almost a year, 10 and a half months, 11 months.

COMMISSIONER BETTMAN: The July that Richard is referring to is this coming July, not last July. As I said before, our current agreement provided for an exclusive negotiating period this coming summer with a year to go in the agreement, but we came together last spring and started having discussions. First we had to discuss how we were going to discuss, what we were going to discuss, whether or not we could go into the marketplace and see if there was other interest. So that process took a few months.
This is an important, extensive, complicated agreement, and it took us a long time to do it. We didn’t agree on everything at every point. So the negotiations from beginning to end took about a year.

Q. Will the CBC be able to make money or break even under this new contract?
RICHARD STURSBERG: Yeah. In fact, let me speak to that for one second. I know there’s been a lot of conversation in the past as to whether the CBC should use public money to bid on sports properties.
The important thing to bear in mind with respect to hockey is that there is no public money in this. This is financed completely out of private money. What I mean by that is that the advertising revenues associated with the property cover in their entirety obviously the rights, plus the production costs associated with the game, and they leave us a margin. That margin, you know, we’re not a profit-making company so what we do is take the margin we realize in terms of investing in other programs that don’t do as well, financially speaking.
But it’s very important to understand there is no public money in this. This is, in fact, financed completely out of the CBC’s private money. Indeed, one of the things I think sometimes people forget is that CBC Television now in terms of its financing is 55% private and 45% public. This comes from the private side.

Q. The answer is that you are going to make money?
RICHARD STURSBERG: The answer is we absolutely are going to make money on this property.

Q. Is there any difference in the regular season deal? You talked about the differences in the playoffs. Is this the same deal that exists now for the regular season?
COMMISSIONER BETTMAN: There are a couple of differences that I wouldn’t categorize as major, but they were important to us. We changed the mix, as I indicated before, of games. We reduced a few Leafs games; we increased the games of some of the other clubs that would be available during the regular season. The clubs that aren’t selected to play on Saturday night and play in the afternoons, we’ll be able to televise their games in their local markets.
But those are really the changes for the regular season. From before we indicated the selection process in the first round of the playoffs is a little bit different.

RICHARD STURSBERG: But at the same time the total number of Canadian games in the package—

COMMISSIONER BETTMAN:—are the same.

RICHARD STURSBERG: In fact, we’ve increased them slightly.

COMMISSIONER BETTMAN: The possibility for some midweek games. To the extent we can schedule some holiday games, like Thanksgiving, we agree to do that as well.

RICHARD STURSBERG: The total count of Canadian games as part and parcel of the total package is slightly higher than it was in the past.

Q. When you talk about online and streaming, what will that mean for viewers? If you’re on the West Coast, there’s a playoff game or regular-season game you want to see, can you choose that one regardless of what’s being broadcast? How will that work for viewers online?
RICHARD STURSBERG: Yeah, that’s the whole idea. It’s part and parcel of where we want to go with the service more generally which is to say we should make our content available to Canadians in whatever way, at whatever time, whatever manner they find most convenient. So what this new deal provides, it provides us with all of the ancillary rights associated with the hockey games that we have so that when we put the hockey game on, we can put it on exactly the same time we stream it on the web. If you’re in the west, you want to see the eastern game, you’re sitting somewhere where it’s more convenient for you to take it off your computer, that’s fine, that’s exactly what we’re going to do. It opens up opportunities for people to make it available on mobile devices or whatever kind of platform it is that Canadians want to use.

Q. There will be no restrictions like the MLB package where if you’re in certain places?
RICHARD STURSBERG: It’s going to be geo-fenced. Our rights are Canadian rights. We’ll geo-fence the rights to make sure we respect the nature of the rights we’ve acquired in the contract.
COMMISSIONER BETTMAN: The other thing is where there’s a difference in the baseball package, the CBC will have the right to distribute however it chooses to the games and the content that it has rights to. This doesn’t apply to what we may do with the Center Ice package separate and apart from this. Their rights are they own the Hockey Night games, for example, and they can distribute it through the traditional network, they can stream it online, they can do it on wireless. But it all relates to the content that they already own with respect to their exclusivity on Hockey Night.

Q. An end-user in Ontario could see the Ottawa/Montréal game?
COMMISSIONER BETTMAN: If they choose to stream it.

RICHARD STURSBERG: That’s exactly right.

Q. How important was it for the CBC to retain these rights in light of the sports properties it lost over the last couple years?
RICHARD STURSBERG: This is kind of an iconic property. This is a great franchise. As we said in our opening remarks, this is the longest relationship between a broadcaster and a league, as far as I know, anywhere in the world. This has obviously been a franchise property with the CBC for many, many years. It’s absolutely a crucially important property and we’re thrilled.
This is a property, I think it’s fair to say, that dwarfs in importance all of the other sports properties we have. To be able to maintain this property is obviously very key to us. We’re thrilled by the relationship with the league. Obviously, this is an extremely good relationship in the sense it has gone on for many, many, many years and it’s been a great win for both sides.

Q. The digital rights, Richard, how different will this look from what you did with the Olympics? Anything else you can do?
RICHARD STURSBERG: No, it’s very similar to the totality of the rights we have with the Olympics. When we did the Olympic Games in Torino, we streamed games, put up mobisodes on cell phones, 18 updates a day, a VOD offer, plus we had obviously all the television rights.
You know, given the current state of technology, certainly we anticipate we’ll be able to do many of the similar kinds of things.
I think it’s fair to say that the IOC was thrilled with what it was that we did by way of making the games on all those platforms. I think it was good for us and it was good for the Games themselves.
I think the same thing will be true with respect to hockey because the more different platforms we can occupy, the more convenient it is for Canadians to be able to get access to the games, the better it is for us and the better it is for the game, the better it is for the league, the better it is for the fans.

Q. In the past digital rights have been kind of talked about as a throw-in on a lot of deals. How much of a factor were they this time around in terms of value in the deal?
RICHARD STURSBERG: Digital rights are important. I think they will be more important going forward as you begin to see the shift that takes place in the way in which people consume media. It’s clear they’re consuming more and more of their media off alternative platforms, and that the pace of that shift in consumption will accelerate.

COMMISSIONER BETTMAN: From the league’s standpoint, we didn’t just throw them in. We think they’re valuable and we did place a value on them.

Q. What impact will this deal have on acquiring future sports products like the Olympics or baseball?
RICHARD STURSBERG: It doesn’t have any relationship to either. Actually the baseball season is a little bit different from the hockey season. The Olympics are wrapped up for 2010, 2012. If they become available again, we look forward to seeing what that opportunity looked like.

Q. One media outlet has put a hundred million dollar a year price tag on the rights associated with this deal. Can you confirm that?
RICHARD STURSBERG: We’re not going to comment obviously on the commercial details of the agreement. It’s a commercial confidence. What I can tell you is exactly what I was saying before. This is a good deal for the CBC. We’ll make money out of this deal. As I was mentioning, this is financed completely out of the advertising revenues we’re going to make as a result of it.

COMMISSIONER BETTMAN: For the record, this was a good deal for the NHL.
Q. Are you not up or down in terms of rights for licensing sports events from 2002 to now?
RICHARD STURSBERG: Well, with respect to this, I don’t think it will come as a surprise to say that the value of the NHL property is slightly higher now than it was when the last deal was done.

COMMISSIONER BETTMAN: I think that’s fair. I might quibble with the “slightly” (laughter).

Q. At any time during your negotiations or perhaps before they got started, did you have any personal concern that this deal might not get done? Ever a moment where you thought it might not happen?
RICHARD STURSBERG: You never know with a deal. Deals are deals. Deals not done till the deal’s done. Sure, of course, one is always concerned. On the one hand you want to get the deal done. On the other hand you want to get the deal done in the right way. You want to get it done at the right place with the right conditions.
Yeah, of course. But the deal’s done now and I’m thrilled that it’s done.

Q. Can you elaborate on how long ago that might have been or when that changed, when you started to feel better about this day coming?
RICHARD STURSBERG: Well, I felt pretty good about it all along actually. I had moments when I wasn’t altogether clear we were going to get there. Same as any deal.

COMMISSIONER BETTMAN: Those were intentional moments we gave you (laughter).

RICHARD STURSBERG: I appreciated that, Gary.

COMMISSIONER BETTMAN: The least I could do.

Q. When was the deal concluded? How long has it been since you actually got the deal done?
RICHARD STURSBERG: Well, actually by the end of—what had happened was Gary and I had kind of concluded really week before last. We turned it over to the lawyers, which was a great mistake. Our lawyers are very good but inevitably they had other issues they raised. We had to sort through a couple of those. We sent it off on Friday night. We all had a last read of it. Came back Monday. We were pretty well done.
I recall actually it was funny because when we kind of concluded, I think we signed the deal on Wednesday morning, right?

COMMISSIONER BETTMAN: When was your board meeting?

RICHARD STURSBERG: It was Wednesday. I had signed the deal to you, sent it to you, you signed it back to me an hour later.

COMMISSIONER BETTMAN: 10:00 Wednesday morning. So the CBC board approved it last Wednesday.

RICHARD STURSBERG: That’s right.

COMMISSIONER BETTMAN: The NHL board, our next meeting isn’t scheduled until June. That’s when I’ll have the board approve that, maybe in the context of some other television arrangements as well. But we didn’t think obviously this would hold for another two months so that’s why we were sharing the news with you now.
There were a lot of sessions we had negotiating. I remember in particular when we were in Nova Scotia for Kraft Hockeyville, the exhibition game, we actually went for a walk for an hour as part of a negotiation. This has been ongoing. It wasn’t really done until it was done.

RICHARD STURSBERG: I would say actually, back to the question of when did I think the deal was over a hump, was when we met at the Kraft Hockeyville thing. We walked around. When we finally had to sit down, we sat down in a car so nobody could hear us and closed the door. I think it was at that point that you thought and I thought that we had taken it to the point where we could conclude it.

Q. When exactly was the Kraft Hockeyville meeting?
COMMISSIONER BETTMAN: That was the end of September. That was when it got to the point that it looked like we could make a deal, but it still took us from the end of September until last week to conclude it because there were a lot of issues and a lot of moving parts.
From our standpoint, just to put it in context, it’s not just a negotiation that we have with the CBC, which is obviously of paramount importance; we also wanted to take into account what might be available for a national cable package. I also have to take into account what content we’re going to have to provide from our Canadian teams as well. This is a negotiation that has to be put together in layers. So we’re dealing with a lot of moving parts at the same time. That’s one of the reasons it took us as long as it did.

Q. Will the online streaming be free of charge to the consumer?
RICHARD STURSBERG: That’s what I anticipate now.

Q. You talked about geo-fencing. Would that mean a consumer in Toronto would not be able to watch a game that’s on in Montréal, for example?
RICHARD STURSBERG: No. What I mean by ‘geo-fencing,’ the rights are for the Canadian market. We would fence the Canadian market to make sure that our rights that spill out into other markets where we haven’t bought the rights.

Q. What about other packages? When do the negotiations start on that? What’s the process from here for cable and such?
COMMISSIONER BETTMAN: That’s an ongoing discussion. I’m not going to put a timetable on it. The good news is one of my moving pieces has stopped moving and we now know what’s available with the cable package. Those are discussions I expect to have, although we do have a lot of time because the cable deal, like the CBC deal, in its current form doesn’t expire for another full season. But that’s something I think we’ll get to sooner rather than later.
RICHARD STURSBERG: It’s important to bear in mind when we say it’s a six-year deal, it’s six years after next season. So from here forward, it’s actually a seven-year deal.

Q. When we’re talking about online, rights on additional platforms, is there a mobile component?
RICHARD STURSBERG: Yeah, that’s right. These rights are rights for all platforms, whether they’re television rights, wireless rights, online rights. Whatever kind of rights they are, we have all the rights.

Q. You plan on using them all, I take it?
RICHARD STURSBERG: Yes, we do.

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