How Lacroix Bet The CBC And Lost

By Stephen Pate – Last week CBC President Hubert Lacroix traveled to Ottawa to plead with Senate of Canada for more money, or at least a line of credit. He told the Senators he needs to make up $200 million in annual advertising revenue lost when Rogers Communications won the NHL broadcast franchise.

Lacroix spent most of his presentation extolling the benefits of broadcasting the Sochi Olympics. While the CBC may possibly breaking even on Sochi, losing Hockey Night in Canada cost the corporation $2.5 billion over 12 years.

CBC could not successfully negotiate both Sochi and the NHL which is obvious from the outcome.  Lacroix bet the CBC, as it exists today, and lost. He risked an 80 year hockey broadcast franchise that defined the CBC on a trade for 17 days in Russia.  CBC management did a terrible job of risk analysis when they spent their time bidding and re-bidding the Olympics.

Losing an 80 year hockey franchise

First Lacroix lost the theme song for “Hockey Night in Canada” by mismanaging the song’s licensing.   In November 2013, Lacroix lost the hockey broadcast rights. To hockey loving Canadians, Lacroix is a disaster.  CBC loses control of ‘Hockey Night in Canada’ to Rogers in blockbuster deal

Hockey notwithstanding, President Lacroix’s loss of Hockey Night in Canada could be fatal to the CBC. He has no idea how the CBC is going to make up the lost $200 million in annual revenues other than begging the Government.

With the loss of NHL Hockey to Rogers for 12 years, CBC lost 66% of the their income from advertising in one careless move. $200 million in annual Hockey Night in Canada sales now go to Rogers. While CBC gets broadcast rights for the Saturday night game, all they can place in that time slot are what amount to public service ads for their own shows.

If you believe Lacroix’s “trickle down” theory, more people will want to watch Arctic Air, Rick Mercer and Dragon’s Den if you pound it into their brains during Hockey Night in Canada. I don’t think so. We already get enough CBC self-promotion to reach for the remote. Even Lacroix admitted the CBC is going to a dark place without any idea that his  strategy will make $1 towards the $200 million lost.

If CBC lost the Sochi Olympics bid, their line-up for 17 days in February 2014 may have been weak.  We would have watched Canada win gold in hockey on another network. Lacroix told the Senator Transportation and Communications Committee  he hopes to break even on Sochi broadcasting.

Lacroix should have assigned himself and some of the 530 people who worked for 18 months on Sochi to the Hockey Night in Canada deal. He might have kept the contract.  That would have protected the $200 million annual Hockey Night in Canada franchise. 

Lacroix told the Senators he could not bid that high against Rogers for the NHL but did he try a consortium with Bell who stand to lose TSN’s rights to NHL hockey? With high stakes for both CBC and Bell Media, they should have been able to win but I suspect Lacroix didn’t have his eye on the puck.

Another Canadian media corporation would have gotten the rights to Sochi but even that is irrelevant.  Lacroix’s job is not to bet the existence of the CBC on high profile projects that do not pay a profit.

Rogers and Bell both backed out after the first round of Sochi negotiations, Mr. Lacroix said.  That should have been a warning to him that the two larger Canadian networks were focusing on more important battles.

Is this King Richard of England who left the country to fight the Crusades only lose the crown to Prince John? Or is it Nero fiddling while Rome burns? My mind is flooded with historical examples of leaders who cast their eyes on foreign wars to lose the country they governed.

What ever weak justification Lacroix made to the Senate sub-committee, it was apparent that the Senators did not believe him. They asked questions about how much Sochi cost and how much did CBC earn. Forget medals, show me the money.

Senators asked how CBC expected to reverse their slide into last place in the hearts of Canadian viewers with the $1 billion they already get from Parliament.  Laccoix said he is working on a plan.

Lacroix’s Senate pitch was a waste of his time, except as a practice run before the Canadian Parliament for many reasons. The Senators don’t look kindly on the CBC which flooded daily newscasts for 10 months in 2013 with stories about Senate corruption.

Then Lacroix had to admit he fudged his own expenses, double-dipping on his per diems. He stick handled around hiding the story for 6 months, but the Senators saw through that story as well.

Some people think the CBC has a double standard about truth and transparency.

The fourth problem with Lacroix’s pitch is that the Senate has no power of appropriations and therefore cannot increase the CBC’s grant or give them a VISA card even if they were so inclined.

Canadians will still get Hockey Night in Canada without the CBC. Now the CBC has to scramble to downsize fast enough ahead of the buzzer.

Follow me on Twitter at @sdpate or on Facebook at NJN Network and OyeTimes.

By Stephen Pate, NJN Network