Photographer: Ronald Martinez/Getty Images

NFL Blitzes Trudeau in Arcane Super Bowl Advertising Dispute

  • Recent telecom ruling allows U.S. spots to air north of border
  • But league, BCE Inc., actors and lawmakers are fighting it

The Super Bowl always comes with a dose of Canadian grumbling. The U.S. ads synonymous with television’s premiere event have long been blocked north of the border, riling viewers who are force-fed local ads instead. 

This year, that’s set to change after a populist ruling cleared the way for Budweiser Clydesdales to trot onto Canadian airwaves. The only problem? It also kicked off a Super Bowl-sized fight that landed at Prime Minister Justin Trudeau’s feet.

The rule change is opposed by a motley alliance led by the National Football League and Canadian telecommunications giant BCE Inc., whose Bell Media unit owns the broadcast rights. They’re joined by Florida Senator Marco Rubio, plus Canadian lawmakers, actors and unions. A court battle is underway, with the NFL essentially suing to keep its U.S. ads out of Canada, while stakeholders launch a publicity blitz.

“We’re all kind of strange bedfellows,” said Stephen Waddell, executive director of ACTRA, a union representing 23,000 Canadian performers that fears the move could ultimately trigger the end of a system the domestic arts sector relies on. “It’s the tip of the iceberg.”

The ruling is a test case for how Canadian broadcast regulations will evolve in an era of Netflix. Looming over the spat is Donald Trump -- a friend of the NFL and New England Patriots Quarterback Tom Brady -- and his pledge to renegotiate the North American Free Trade Agreement, on which the NFL court case will partially hinge. While Trudeau has so far dodged the issue, he may not be able to forever.

Broadcast ‘Addiction’

The Canada Radio-television Telecommunications Commission ruling, finalized in 2016, ever-so-slightly loosens the grip of simultaneous substitution, or simsub. The practice began in the 1970s so broadcasters who paid for rights to U.S. shows wouldn’t see their advertising base eroded by viewers watching American feeds readily available to viewers near the border.

Jean- Pierre Blais

Photographer: Fred Chartrand/AP Photo

When CRTC Chairman Jean-Pierre Blais announced the change -- which applies only to the Super Bowl -- he called the existing system an “addiction” broadcasters backed at the expense of viewers. It’s nonetheless a key pillar of Canada’s TV and film industry, along with rules requiring broadcasters to air a certain amount of made-in-Canada content. Forcing domestic ads onto U.S. shows in effect funds the production of Canadian shows. And no show, or ad time on it, is more popular in Canada than the Super Bowl.

But times are changing. Streaming services threaten to make Canadian-content rules irrelevant even without regulatory change. The migration from traditional cable to online content is already crimping ad revenue for Bell and its cable TV competitors, Rogers Communications Inc. and Shaw Communications Inc.

Rare Prerogative

“The changing technologies and the changes at the regulator are clearly pressuring the future of simsub,” Michael Geist, a communications and internet law professor at the University of Ottawa, said by phone. The CRTC’s move was a “shot across the bow” of Canada’s broadcasting industry and a first step in weaning them off the old model, he said. 

According to a person familiar with the dispute, Bell is urging Trudeau to intervene by using an executive power for only the second time in Canada’s history. Section 26 (2) of the Broadcasting Act allows cabinet to direct TV feeds in case of “urgent importance.” It has been invoked once, 22 years ago, to broadcast a live address by a prime minister when a separatist movement almost broke the country apart.

This time around, the stakes are somewhat lower: to force broadcasters to carry a Super Bowl feed with Canadian ads, in effect overruling the CRTC. The NFL also cites the clause in its legal challenge, which is being heard in Canada’s Federal Court of Appeal.

Opponents of the ruling argue it costs Bell money by devaluing the ads it sells, costs actors work by cutting funding for Canadian programming, and will cost the NFL money the next time Canadian rights are put up for sale. They also say complaints are overblown, especially since Canadians can just watch the special ads on YouTube. In 2013, the CRTC received 458 simsub complaints, estimating 20 percent were related to the Super Bowl -- or 92 complaints in a country of 36 million people.

Political Resistance

The Bell-NFL deal and its terms aren’t public, though a report commissioned by the company and obtained by Bloomberg estimates the cost of losing simsub on the Super Bowl at C$18 million ($13.6 million) a year. Doing away with simsub altogether would cost broadcasters C$250 million annually, the report said -- a number the CRTC has also used.

Rubio and Wisconsin Senator Ron Johnson wrote Trudeau’s ambassador in Washington on Dec. 20. The CRTC ruling “sends a troubling signal about the value Canada places on its largest trading partner, best customer and close friend,” the Republican senators said, urging a policy reversal.

Three of Trudeau’s own lawmakers have also spoken out against the ruling. They include the chairmen of two parliamentary committees on finance and foreign affairs, Wayne Easter and Bob Nault, as well as backbencher Ken Cardie.

“There is no doubt that the economic consequences of this flawed decision are significant,” Easter and Nault said in a letter to the regulator. “We are asking that the CRTC reverse its position immediately to ensure that our Canadian performers, producers, actors, and broadcasters are provided the same opportunity to showcase Canadian content in Canada.” 

Ministerial Reticence

There’s no signal that will happen. Heritage Minister Melanie Joly has no plans to intervene. “The CRTC is independent, and because the matter is in front of the federal courts right now under judicial review, I can’t comment,” she said in an interview. When pressed on whether the government would consider using the rare executive power, she replied: “I’ll make sure that I keep my comments for myself.”

Still, the alliance hopes its Hail Mary will land true, restoring full simsub and blocking live U.S. Super Bowl ads for at least one more season from Canadian airwaves.

“The message is: Do the right thing and rescind it,” said Ron Lund, president of the Association of Canadian Advertisers. “Toying with a system without having something to replace the system with is very dangerous.”

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE