Friday, September 6, 2019

CFL & TSN Reportedly Have New Contract

It appears the Canadian Football League and TSN have been huddling up at the highest levels and will be announcing a new, long-term partnership before the end of this season.

Well-placed sources say the league and the all-sports television network have agreed on a six-year deal that runs through the 2025 season and should be worth about $50 million annually to the CFL, though that number could grow significantly as there will be incentives, ratings-based and otherwise, written into the contract.

A TSN spokesperson said in an email that the company does not comment on rights negotiations, while a CFL spokesperson did not immediately respond to Postmedia’s request for comment on Friday.

The current agreement was scheduled to run through 2021 but there was apparently impetus from both the league and TSN to hammer out a long-term arrangement that functions more as a partnership than a rights deal, so it is believed the final two years were reworked and four more were added.

Revenue certainty is obviously preferable to the alternative, so it makes nothing but sense for the CFL to seek an extension, particularly one that will offer a healthy base amount that each of the nine franchises can rely upon, and also leave top-end room if ratings trend upward, as both the CFL and TSN would hope and expect.

It’s especially important if and when the CFL adds an expansion franchise in Halifax. Principals with the Atlantic Schooners are now hopeful of a 2021 kickoff, most likely in an existing stadium in Moncton, before switching to an as-yet-unbuilt venue in Halifax after a season or two.

The CFL will be charging the Schooners’ owners an expansion fee, of course, and a lucrative, long-term TV deal will surely bolster the value of a 10th franchise.

Under Commissioner Randy Ambrosie, the league continues to shift perception and pursue new revenue streams all over the world, as part of his ambitious CFL 2.0 initiative. The CFL signed a TV deal with a Mexico City company and is due to announce a streaming deal with another Mexican media outlet. In time, there should also be streaming deals in Europe, as global players start to populate CFL rosters.

If the deal with TSN represents a new approach to domestic television rights, and includes previously untapped sources of revenue, it would stand as another example of Ambrosie’s innovative leadership and stated intention to strengthen the league’s bottom line.

An even more interesting aspect of the new deal would be TSN’s motivation to rework the existing terms. They had the CFL locked up for two more years, apparently at a somewhat lower rate, and by all accounts were satisfied with the ratings and what the product was doing for them in terms of driving ad revenue.

So why extend a favourable deal? Well, without hearing it from anyone at TSN who was directly involved in the negotiations, how can this not be about the very real threat that global streaming companies pose to more traditional TV networks?

Think specifically about the landscape in Canada. The CFL is partially aligned with the new Canadian Premier League that has brought another professional soccer loop to Canada, with teams in Hamilton, Edmonton, Winnipeg, Calgary, Halifax, Victoria and York. The Winnipeg Blue Bombers own Valour FC, while the Tiger-Cats’ so-called caretaker Bob Young owns the Hamilton Forge.

The CPL kicked off its debut season last spring by signing a 10-year streaming deal with Mediapro, a Spanish media conglomerate that generated revenues equal to $2.7 billion CDN in 2017.

It has been reported, but not confirmed by anyone with the CPL or Mediapro, that the deal is worth $200 million, so $20 million per year. For a fledgling, domestic soccer start-up, that’s really good money.

Mediapro is a major player on the global soccer scene and wanted a foothold in the North American sports landscape, with an eye on moving into the United States from Canada. So they apparently paid dearly for the rights to all CPL games, as well as all Canadian National Team games, for both men and women. Content will be available on desktop, mobile and Smart TV platforms.

It doesn’t require much imagination to envision Mediapro officials spending some time in Canada and taking a long, hard look at the prospects of a streaming deal with the CFL, a well-established sports property that would demand far more than $20 million per year.

As one source said Friday, there is “incredible upheaval” in the broadcast market these days and TSN would surely have been looking for long-term stability with a major partner like the CFL.

(Dan Barnes/Postmedia)

1 comment:

Anonymous said...

This new contract should immediately put an end to all the doomsayers saying the CFL will be dead before we know it.