The Rogers Sportsnet broadcast studio.Fred Lum/The Globe and Mail
Rogers Communications Inc. RCI-B-T is renewing its multibillion-dollar deal to broadcast NHL games in Canada, according to a source familiar with the negotiations.
The company and the league have reached a broadcast agreement that must still be approved by the NHL, the source said. The Globe is not identifying the source because they are not authorized to speak publicly about the agreement.
Rogers will pay US$7.7-billion, or roughly $11-billion, to renew its current 12-year deal for another 12 years, according to Sportico and the Associated Press. The new contract is worth more than double the $5.2-billion Rogers agreed to pay in 2013. Sportico was first to report Rogers and the NHL had reached a deal.
Rogers declined to comment for this story.
With the current deal set to expire at the end of the next NHL season, Rogers chief executive Tony Staffieri has been vocal about wanting to renew. “As we look to contract renewals, it’s something we’re very interested in and something we will chase and certainly expect to be at the table,” Mr. Staffieri said at a Canadian Club event in the spring of 2024.
However, investors and analysts have questioned how much value Rogers gets out of the contract. Some of that stems from the secrecy of the deal’s terms, but throughout the current 12-year deal, Canadian NHL teams have also often struggled to make deep runs in the playoffs, which is when TV rights are the most valuable because advertisers pay up when more people are watching.
Rogers’ share price has also struggled in recent years, falling 49 per cent from its record high in April, 2022. Rising interest rates initially hurt telecommunications stocks, because their yields looked less attractive relative to those offered by ultra-safe guaranteed investment certificates, and Rogers has since come under scrutiny for its large debt load, a good chunk of which came from acquiring Shaw Communications Inc. for $26-billion.
The Canadian telco also announced plans in September, 2024, to purchase BCE Inc.’s 37.5-per-cent share of Maple Leaf Sports & Entertainment (MLSE), a conglomerate that owns the Toronto Maple Leafs and the Toronto Raptors, among other sports teams, for $4.7-billion. Analysts have questioned how it will affect Rogers’ ability to pay down its debt load, but Mr. Staffieri has said the deal will not increase Rogers’ debt levels because the company has lined up wealthy individuals and institutional investors as potential backers of MLSE.
At the same time, Rogers also faces headwinds that have hit the entire telecommunication sector in Canada: much lower immigration, fierce wireless competition and the decline of the traditional cable television business.
With cord-cutting picking up, Mr. Staffieri told The Globe in September that live sports are a critical part of Rogers’s strategy of winning and retaining subscribers. Yet because live sports have remained popular, sports leagues have demanded higher prices for their TV rights in recent years.
In 2021, the NHL signed U.S. media-rights deals worth a reported US$625-million annually, with games split between ABC, ESPN, TNT and HBO Max. Its previous contract with NBC earned the league US$200-million annually.
Last year, the National Basketball Association signed an 11-year, US$76-billion deal for the U.S. rights to nationally broadcast its games with The Walt Disney Co., NBCUniversal and Amazon Prime Video, an increase of about 160 per cent from the US$2.7-billion a year it earned under its previous deal.
For Rogers, paying more for TV rights could boost the value of the Toronto Maple Leafs, but its impact on Sportsnet will depend on the details. Although cable and streaming customers have been willing to pay more for sports content, escalating rights values add to network costs.
Pre-tax profit for Rogers’ three Sportsnet services stayed flat over the 10-year period from 2013 to 2023, inching up to $88-million in 2023 from $87-million on 2013, according to filings with the Canadian Radio-television and Telecommunications Commission.
With reports from Simon Houpt and Andrew Willis