Top hockey producer’s firing before NHL playoffs hints at Rogers turmoil
DAVID SHOALTS The Globe and Mail Apr. 08, 2016
An Angus Reid Institute poll has driven an exclamation point into what executives at beleaguered Rogers Media already know – most Canadians will not be watching the NHL playoffs this spring.
But at Rogers, the blood was already on the floor thanks to the fact that none of the seven Canadian NHL teams will be in the playoffs for the first time since 1970. On Tuesday, the man in charge of hockey production at Sportsnet and Hockey Night in Canada, senior vice-president Gord Cutler, was fired. Before that, several staffers in the hockey department were laid off.
While company insiders said Cutler’s dismissal was a financial move since he was undoubtedly hired away from rival Bell Media’s TSN two years ago with a healthy salary, the timing was extraordinary. No one could remember a network firing its head of production with the NHL playoffs days away.
The move hinted at the turmoil in Rogers Media, which has seen even more ratings trouble in the second season of its $5.2-billion, 12-year contract with the NHL for the national Canadian broadcast rights. While Cutler cannot be held responsible for a 16-per-cent decline in Hockey Night In Canada ratings through late March, which follows a 16-per-cent decline in the first year of the deal from the 2013-14 season, CBC’s last year broadcasting the show, his departure is a sign there may be unhappiness with the on-air product at the highest level of Rogers, even above Sportsnet president Scott Moore and Rogers Media president Rick Brace.
A Rogers spokeswoman said Moore would not be available for comment until later this week.
When ratings do not reach the projections given to advertisers, broadcasters have to give their clients free commercial time as compensation, known as make-goods. The problem for Rogers is that the loss of viewers is so severe that it has to give out far more make-goods than was planned.
One source in the advertising industry and one in the broadcast industry say the free spots, two of which are being given for every paid ad, have eaten up a significant portion of Rogers’s playoff hockey inventory. This means there is much less to sell to paying clients, which further hurts revenue when Rogers usually would expect to sell playoff advertising at a significant premium. The company is putting some make-goods on its Toronto Blue Jays broadcasts and entertainment shows, and that, too, cuts into the sales of advertising time.
“It is kind of grim, but unlike the fairy tales, it is reality,” said the advertising source, who requested not to be identified because of a business relationship with Rogers.
Hockey fans’ unhappiness has been building since late January, when all seven Canadian teams started wobbling. Of the 1,522 Canadian adults Angus Reid surveyed from March 28 to 31, 54 per cent said they planned to watch either less of the NHL playoffs than they did a year ago or none.
Only 30 per cent of the respondents said they plan to watch the same amount they did in 2015. Nineteen per cent said they will watch no playoff hockey, while 35 per cent said they will watch less than a year ago. All of the respondents said they usually watch the playoffs. The full results of the survey, released on Thursday, are on Angus Reid’s web site.
The trouble signs for Sportsnet began at the start of the 2015-16 NHL season thanks to the network’s unexpected success story, the Toronto Blue Jays. According to multiple sources, some major advertisers took advantage of provisions in their contracts with Rogers that allowed them to switch their commercials from the hockey broadcasts to the Blue Jays as they went on their run through the baseball playoffs in October.
According to another advertising source (who also requested anonymity because of direct dealings with Rogers), some companies could do this, but they had to pay a premium, because the Jays were getting audiences of three million or more.
Another source said the audience numbers for hockey reached only 77 per cent of the projections Rogers gave advertisers in the fall of 2015.
Rogers was also hit by a drop in ratings for its conventional shows on its City channels and specialty networks such as OLN, the source said. This makes it difficult to satisfy advertisers who demand a certain audience level for make-goods on those channels. It also eats into the advertising inventory for those shows.
Broadcasting insiders have suggested Rogers could get some revenue relief by selling games from its national package to TSN. However, a source close to senior management at TSN said the network, which remains profitable, is not interested in buying any NHL games.
This is not surprising given the ratings tumble for Rogers. By late March, the average audience for the early game on Saturday’s Hockey Night In Canada was down to 1.66 million from more than 1.9 million in 2014-15. When the biggest driver of hockey ratings, the Toronto Maple Leafs, were competitive, audiences for those games routinely exceeded two million.
However, the largest audience for a Leafs game between Jan. 3 and April 2 was the 1.8 million who watched on Saturday, Jan. 23. That may look good compared with this season’s average, but it was against the Montreal Canadiens, a matchup that used to draw more than two million viewers. By April 2, the viewers were down to 826,500 on both the CBC and City for a game between the Leafs and another strong rival, the Detroit Red Wings.
Moore acknowledged the problems of poor ratings and falling advertising revenue caused by the Canadian teams’ lacklustre play in a recent memo to Sportsnet staff. He also mentioned layoffs, part of Rogers’s announcement a few months ago of 200 job losses, that hit the hockey department for the first time. But he did not draw a direct link between the Canadian teams and the layoffs.
However, Sportsnet staffers see the connection and it has not been good for morale. This was compounded by Cutler’s firing, which came long after Moore’s memo. There is much fear at the network about more layoffs once the hockey season is over.
“There’s tons of concern about that,” one Rogers employee said. “That’s all anybody talks about.”
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