Late last week Rogers fired Gord Cutler, who was in charge of hockey programming at Sportsnet and, specifically, the Hockey Night In Canada franchise. According to a report from Dave “the Hammer” Shoalts of the Globe and Mail, the timing of the firing was unusual, given that the NHL playoffs are just about to begin — and notable, because with each Canadian team being done for the season, Rogers expects ratings will fail to meet expectations.
It’s not a good time in that particular little corner of the Rogers empire, says Shoalts (who I assume likes ham sandwiches, which I choose to believe he calls “hammers”). But what does that have to do with the Jays, you ask? Well…
I’d heard of Cutler’s firing back when it happened, but didn’t come across Shoalts’s rather in-depth piece until a tweet from BP Toronto’s Gideon Turk (who, I should note, also tweeted the crying Jordan Rogers logo I’ve totally swiped for the top of this post) brought it to attention of Blue Jays Twitter on Monday night. In response to Sportsnet PR’s crowing about the 1.77-million viewers who tuned in for the Jays’ home opener on Friday — a record audience for the event on Sportsnet — Gideon quipped that “It’s a shame the advertising is going for free to companies who paid for HNIC ads.”
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.
Well that certainly is rich.
Or it seems like something that must be egregious. Right?
But I suppose it depends on what, precisely, “some” means, and just how the Jays and Sportsnet are intertwined. How direct is the link between the club’s payroll and Sportsnet’s ability to generate revenue from the club? Do they really operate separately, like a traditional club and TV network, even though they’re both under the same parent company? Or is what’s bad for Rogers’ Media division bad for the Jays, even if the club is one of its big success stories?
At this point this is, of course, one of this franchise’s eternal questions. In other words: we basically have no idea.
We do know that normally you’d figure the Jays would be the beneficiaries of a lack of interest in the NHL playoffs, at least theoretically, as it means more fans giving the club more attention earlier in the season, and more media attention.
We also know, from Shoalts’s piece, that Jays broadcasts were the beneficiary of lagging interest in the NHL on the front end of this process:
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.
But that windfall doesn’t mean the Jays ought to be happy about what’s going on now with ad units on their broadcasts, especially if there’s an actual direct link in that to their own bottom line.
Or even if there isn’t.
In the abstract, one wonders about the incentive for Rogers to invest in the Blue Jays if a significant amount of the ad space on Sportsnet is going to offset underruns from hockey broadcasts. But the fact that we’re only talking, vaguely, about “some” ads on Jays broadcasts, which themselves are only one slice of the advertising revenue pie, makes the significance of the hit impossible to determine from here.
We do know that the Jays’ payroll stayed stagnant this winter, even though Rogers’ own Q4 2015 report lists growth from the Jays and Sportsnet as the primary driver of revenue increase for the Media division. But that’s perhaps more than anything because of the low Canadian dollar (though it should be noted that the Jays, through MLB’s US TV deals and MLBAM, take in a whole lot of US dollars as well) or the unwillingness of the club’s new president to overspend in his first few weeks on the job.
So just how much are the Jays subsidising some of the less currently viable properties under Media’s umbrella? I have no idea. And therefore I can’t say with any certainty whether these ugly times on the hockey side of things are going to end up bleeding the baseball team in any sort of significant or noticeable way.
You’d certainly hope not. You’d hope it might even strengthen the company’s resolve to keep the Jays their big success story, and that the Jays will benefit from the extra attention in the long run. But I fear getting hopeful of that kind of stuff might be just far too naive, as I’m pretty sure Rogers doesn’t own everything that it does — doesn’t own a baseball team and the TV network it provides content for — with the intention of running each entity like a completely standalone business. So I’m thinking none of this sounds particularly good for anybody.