Rogers NHL Deal to Draw Government Scrutiny, Moody’s Says
(Corrects location of analyst in third-to-last paragraph of story that ran on Dec. 12.)
Rogers Communications Inc. (RCI/B)’s deal to lock up exclusive rights to broadcast hockey, Canada’s favorite sport, probably will make the government reconsider how it regulates TV programming, Moody’s Investors Service said.
The C$5.2 billion ($4.9 billion), 12-year agreement makes Rogers the sole distributor of National Hockey League games in Canada beginning in 2014. Rogers may distribute some content only to its subscribers, giving the government pause about the effect on hockey-hungry consumers, Moody’s said.
“Despite the Canadian government’s support of free markets, should Rogers’ plan adversely affect consumers, regulators will respond,” Moody’s analyst Bill Wolfe said in the report published today.
Last month’s agreement marks the first time the NHL has handed Canadian rights to a single broadcaster, Toronto-based Rogers said when the pact was announced.
The Canadian Radio-television and Telecommunications Commission, known as the CRTC, regulates communications and media markets to make sure they serve the Canadian public.
Guillaume Castonguay, a spokesman for the CRTC, said the agency won’t comment on the Moody’s report.
Digital media, such as smartphone and tablet distribution, aren’t covered by the same laws that govern traditional broadcasters, which are required to provide universal access, Moody’s said. If the government comes up with new rules to account for more recent developments in the industry, it could cut into profits, the credit-rating company said.
“You have at least the potential that they might not make as much money as they thought,” Wolfe said in a phone interview from Toronto. “By the same token, as I said, I don’t think the CRTC actively wants to destroy value.”
Rogers plans to broadcast games on several networks as well as through the Internet, Patricia Trott, a Rogers spokeswoman, said in an e-mail.
“This agreement will give Canadians access to more hockey games than ever before,” she said.
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