Fallout from new Canadian TV deal uncertain, but expect prices to rise

Jonathan Willis
November 27 2013 07:47AM

With the news yesterday that Rogers and the NHL had agreed on a 12-year, $5.232 billion Canadian television deal, the overwhelming reaction was uncertainty. We don’t know how this will effect TSN or CBC, we don’t know how Rogers will cover the game, and we don’t know if the hockey-watching experience will be better a year from now than it is today.

What we know for sure is that NHL hockey is going to be on Rogers. What we also know, with barely less certainty, is that it’s going to cost more to watch.

The Experts

Jim Jamieson of The Province talked to two business experts: UBC’s James Brander and SFU’s Linday Meredith. The full article is here (and well worth reading) but note the similarity in comments both made.

First, Brander:

The first thing I noticed is the big price tag, and obviously Rogers has to recoup that.

And Meredith:

We’ll see a lot of bundling or extra charges for premium channels. I’m sure Rogers will be pushing hard on all those buttons because they’ve got a lot of money to recoup. Whether it means having to buy stuff you don’t want or premium channels, your cable bill will be going up.

The Logic

It’s pretty straight forward. The NHL’s national television rights cost lots more now than they used to (Chris Botta of Sports Business Journal put the total value of the old deals at roughly $190 million); this new deal increases that to an average of over $400 million per year. Even assuming that NHL hockey was a cash cow for CBC and TSN (which seems likely, given the spike in price), it’s a pretty decent bet that a massive increase in the cost of the product for the provider is going to result in price increases for the consumer.

Commissioner Gary Bettman and the executives at Rogers Communications can pay lip service to the idea that, on some level, this deal was the best deal for fans but it would be a mistake to see it as more than lip service.

The NHL is focused on one thing: money. They’ve demonstrated it time and again, especially with their willingness to force labour stoppages to squeeze as much money as possible out of the sport. Rogers was willing to pay up for the television rights; consequently, the NHL was all too happy to do a deal with Rogers.

Likewise, Rogers is a business with the primary focus of making money. A lot of that money, doubtless, will come from expanding the amount of product available and milking advertisers for all that they are worth. But it would be silly to assume that every available revenue stream won’t be tapped, and that’s likely to include increased prices for the consumer.

A shiny new television deal is unquestionably good for the business of the NHL. It may yet prove to be good for fans, too, if Rogers can deliver a superior product. Right now there’s no way of knowing whether the product will be better or worse, only that it’s likely to cost more.

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Jonathan Willis is a freelance writer. He currently works for Oilers Nation, the Edmonton Journal and Bleacher Report. He's co-written three books and worked for myriad websites, including Grantland, ESPN, The Score, and Hockey Prospectus. He was previously the founder and managing editor of Copper & Blue.
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#1 They're $hittie
November 27 2013, 09:27AM
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Who would you rather cover

Props for TSN

Trash for Sportsnet

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#2 Jordan Nugent-Hallkins
November 27 2013, 08:08AM
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I already pay too much for the premium sports channels, this could be tiresome. Hopefully Sportsnet can step up its game, I always found the TSN panels and presentations a higher quality.

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#3 sec206
November 27 2013, 12:51PM
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5.2 billion to get rid of Mark Lee, Kevin Weekes, Glen Healy? Worth every penny.

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#4 Lawndemon
November 27 2013, 08:10AM
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If Dreger, McKenzie, and Duthie talk about hockey and nobody is there to hear them, do they still make a sound?

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#5 borisnikov
November 27 2013, 08:11AM
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For me, the honest to god truth is that I feel we pay far to much already to watch the NHL. I'm a fairly pragmatic guy, and if I don't see any personal value or gain in something, I just don't opt in and go along with it. Hockey is great but the gradual commercialization of it has definitely jaded my loyalty. I can live without professional sport if need be. I'm sure I fall in to a very small minority of readers here by sharing that thought. My 2¢.

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#6 Romulus' Apotheosis
November 27 2013, 08:21AM
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This comment:

“I think he has a big appeal, but Rogers is much more interested in the smooth, professional, modern sports image,” said Brander. “I’m sure they don’t know and they’re looking hard at it. I don’t think we’re going to see more of Don Cherry, but I would expect him to be phased out.”

Doesn't jibe with reality. HNIC with Cherry and all its flaws is a much more "smooth, professional, modern sports image" than anything SportsNet has ever produced.

SN productions always look like they are shot in the back of dimly lit full-sized van.

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#7 RexHolez
November 27 2013, 08:04AM
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Between the lockouts, my team not being even close to competitive for years, and now this... I'm pretty sure my NHL days are coming to an end

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#8 Shaker
November 27 2013, 08:15AM
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This was some of the worst news I could imagine. The fact gene principe and his (juvenile, tired, unfunny schtick) is going to be shoved down our throats for the considerable future, teamed up with the fact that, unarguably the best talent in hockey by a country mile is being shut out, is.............attrocious.

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#9 Dave
November 27 2013, 12:26PM
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I like Gene ... he lives in Edmonton and is one of us. He can tone it down a notch. Our broadcast crew is far better than Calgary's.

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#10 pkam
November 27 2013, 12:30PM
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It is an entertainment, not daily necessity, right?

So if it is good value for the price, then I am in. If it is not, I'll move to other entertainments.

So why do we even have to worry about the price going up? They are not pointing a gun at your head to force you to subscribe it, are they?

When there is not enough demand (consumer), the price will drop, won't it?

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#11 Gerald R. Ford
November 27 2013, 08:53AM
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I'm looking forward to TSN's year-end highlights show called: "Stuff We Used to Show You".

The Canadian Competition Bureau is forcing Sobey's to close the only grocery store in my neighborhood because of the Safeway takeover, but Rogers can, apparently, own the universe, and no one blinks.

Sometimes, Canada = no sense

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#12 vetinari
November 27 2013, 08:14AM
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I generally preferred the TSN coverage to the Sportsnet coverage, especially for special events like trade deadline day and draft day.

I like the idea of no blackouts and out of market games, but not if they get too silly on their (likely) price increase.

Also, from a cap standpoint, I guess that some GMs will breathe a little easier knowing that the cap will probably rise over the next few years with this guaranteed bump in revenue.

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#13 Ed in Edmonton
November 27 2013, 12:33PM
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I see this as not a big deal to hockey fans. It make no difference to me which channel I watch a game on, other than the varying production qualities. But some people just like to complain.

I hope the Rogers improves its production quality, as it is far behind TSN and HNIC. The local Oiler product borders on amateur hour.

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#14 Supernova
November 27 2013, 08:06AM
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Interested to see how Center ice / game pass will work with no local blackouts.

The only reason I keep cable is for sports. But if I could pay $x for a subscription to the oilers and watch the Games with no blackouts I would do that In a second.

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#15 freeze
November 27 2013, 08:21AM
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I bet we see a lot more of those distracting, superimposed ads on the glass during every game.

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#16 Rob...
November 27 2013, 08:30AM
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As is, I'm painfully aware of how much I pay to watch this dog's breakfast of a local hockey team. If the price goes up just to watch more garbage play I'll turf the channels, catch highlights online and be done with it.

I already skip through the intermissions and play stoppages, so I couldn't care less which network shows the games, but I won't pay more for the privilege.

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#17 Oiler Al
November 27 2013, 09:08AM
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kgo wrote:

This is awesome, I pray they fire all the dinosaurs at CBC except for Cherry!!!

Cherry is the biggest and oldest senile dino on the show. Time for the old fart to retire. He has been spewing the same lexicon for 20 years... nothing new from him.

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#18 Clarko
November 27 2013, 08:28AM
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kgo wrote:

This is awesome, I pray they fire all the dinosaurs at CBC except for Cherry!!!

Don Cherry is the definition of a dinosaur!

I like Maclean and Friedman for commentary and like the Hughson/Simpson duo for broadcasting, but not a big fan of the rest.

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#19 bleedblue
November 27 2013, 08:59AM
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I hear the cable provider is discounting Oiler games and are charging AHL rates.

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#20 borisnikov
November 27 2013, 08:24AM
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Another thought. Our Dads' and Granfathers' games of hockey, even the game we watched in childhood, is officially dead with this deal. The escalation of salaries will continue and the line between sport & business will grow ever more blurred.

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#21 They're $hittie
November 27 2013, 09:56AM
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Romulus' Apotheosis wrote:

Come now… Gene is hilarious and a side-show. It's the commentariat that deserves scrutiny here.

your right no problem with Gene, but it is so beyond terrible of a product and almost to the point of amateur and unprofessional.

Just Lame

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#22 Bryzarro World
November 27 2013, 09:57AM
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Rogers has been screwing us with cellphone bills for years and here's the proof. I left their garbage service and what little hocked I did watch I kind of lost an appetite for. I hate that company and everything it stands for...

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#23 BorisMironov2
November 27 2013, 01:39PM
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Allstar dream lineup for entertainment value:

Coax Rod Philips out of retirement for play-by-play, Gene Principe (with an unlimited supply of props) as his colour guy, Ily Bryzgalov as the "in the game analyst" (even if he's playing).

"Panel" comprised of Milbury, McGuire, and Cherry, but without any moderation. Cherry can bash those two guys as much as he wants. Throw in Biznasty too, I feel like him and Cherry would be friends.

Have an insider trader segment lead by Eklund, with special guests "every single person who includes the rights to Linus Omark in a Shea Weber trade proposal"

Production team that brings in the inventor of the FoxTrax puck, cooperalls, and every design team that has ever used yellow as a main jersey colour.

Just in case anyone from Rogers is reading, this is guaranteed to work. Bring me in as an advisor and pay me MILLIONS.

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#25 Spydyr
November 27 2013, 08:23AM
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The consumer will pay the end cost of the $5.232 billion and the profit Sportsnet will make on top of that.That is how business works.

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#26 Lowe Expectations
November 27 2013, 08:46AM
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Remember, a big part of this is the push for people to have rogers plans for smartphones, tablets etc in order to get the streaming of games. I think the streaming side is the untapped market Rogers will be going after. TV in it's current format is slowly dying.

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#27 Johnnydapunk
November 27 2013, 01:27PM
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I think something like this happened in the 90s with the English Premiership football and Sky sports when they won the rights to broadcast the football over BBC and ITV. BBC Had a Saturday show called match of the day which exactly like the CBC HNIC showed a match every Saturday and sometimes had doubleheaders. Gradually the football disappeared from BBC and they were reduced to a highlights show Saturday and Sunday Nights.

Gradually it because harder and harder to watch live matches on anything that wasn't Sky sports, and slowly the prices crept up and it cost more in every aspect as Sky found new ways to increase revenue, things like charging Pubs a premium rate to broadcast games and basically making it so that you had no choice but to watch the football on Sky.

I have a feeling this is going to be the beginning of a very long profitable run for Sportsnet and slowly all the sports you enjoy will be a Sportsnet broadcast and as there is going to be more and more exposure of the NHL, you will begin to see more and more advertising appear.

It's just a matter of time before the team logos appear smaller and the ads become bigger and all the while we will play more for the pleasure of watching 3 periods of commercials interspersed with hockey.

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#28 wtf
November 27 2013, 03:30PM
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Bryzarro World wrote:

If trudeau got in power I would move out of this country and become muslim. World would be lost at that point...

Keep the derogatory comments to a minimum please. Some of us actually are Muslim.

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#29 kgo
November 27 2013, 08:16AM
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This is awesome, I pray they fire all the dinosaurs at CBC except for Cherry!!!

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#30 bwar
November 27 2013, 12:17PM
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I hope Rogers saved enough money to hire a replacement for Gene Principe.

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#31 Fresh Mess
November 27 2013, 12:59PM
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I see there are several people who don't understand a few things:

1) The announcing crew for the regional Oiler telecasts are hired by the Oilers. Rogers has little to do with it. If you dislike Principe, write the Oilers.

2) I just talked to a well known former TSN employee. He confirmed what I already knew, that there would be a lot of people moving over from TSN to Sportsnet. So whichever network hockey presentation you prefer is irrelevant. Rogers now has all the content and will therefore have their pick of TV talent. Their broadcast will improve over time.

3) It's true that the government is exploring a la carte channel unbundling. If this happens, TSN and Sportsnet would no longer be subsidized by all cable subscribers and would likely cost between $30 and $40 per month on their own. Obviously the channel with the most desired content would win out in that scenario.

4) I also cut the chord about three years ago as I became frustrated with price increases every 6 months on my already hefty cable bill. With a good outdoor antenna you can receive all the local over the air channels in clean HD. So now that will include HNIC double header on CBC as well as a Saturday game on City TV and perhaps OMNI. City TV will also have a sunday night game apparently. UnblockUs does work well as has already been mentioned.

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#32 kgo
November 27 2013, 08:35AM
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Clarko wrote:

Don Cherry is the definition of a dinosaur!

I like Maclean and Friedman for commentary and like the Hughson/Simpson duo for broadcasting, but not a big fan of the rest.

Friedman is gold for sure....but I would pay 1 billion $ personally just to Fire Scott Oake

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#33 Spydyr
November 27 2013, 10:02AM
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The bottom line is the 5.2 Billion and Rogers profits will come out of the pocket of Canadians.

They never even kissed us first.

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#34 book¡e
November 27 2013, 10:30AM
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Spydyr wrote:

The bottom line is the 5.2 Billion and Rogers profits will come out of the pocket of Canadians.

They never even kissed us first.

Yeah, stupid profit. Profit is terrible. Without profit and trade and markets we would be so much better off. Now let's go hunt some deer with our sharp sticks.

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#35 Rocket
November 27 2013, 12:30PM
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I stopped using cable years ago and now just use the interwebs for errything. Thanks to the multiple lockouts and terrible local NHL team, I don't (fully) financially support hockey. I don't buy merch anymore either and I'm squarely in the NHL's target demographic. I still watch Oilers games on the Internet through uh... Other means but I won't be going back to cable anymore.

I don't blame people for being upset with this deal. It seems like every new deal Bettman does screws over the hard working fans. What's up with that?

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#36 Todd
November 27 2013, 10:27AM
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Man I don't get it... Why are people complaining? Its so typically Canadian to feel entitled. But sports? Really? People feel entitled to their NHL hockey...

If it costs too much, don't watch. If you don't like the product, don't watch. If you do like it, and its worth the cost for you, great! That's how the real world works.

Maybe some of the lefties out there can get involved here. Regulate it, unionize it, cap it, watchdog it. Send ideas to a policy think tank and figure out how to socially engineer the optimal NHL TV deal that is accessible, honest, fair and FREE for everyone! Maybe get those fat cat executives at Rogers to subsidize it for us.

OR - it could be run like the NFL. A league who has focused on making money and having an amazing product and the end result is THE BEST sports product on the planet.

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#37 book¡e
November 27 2013, 10:29AM
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Bryzarro World wrote:

Like hell I'm going to burn through my data and pay up the ass to watch this turd of a team and product...

You should check out something called wi-fi.

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#38 Dipstick
November 27 2013, 11:33AM
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Spydyr wrote:

Yes, billionaires and millionaires get more money on the back of the working class.

The discrepancy between the rich and the rest of us continues to grow.

They didn't get rich by sitting on their asses complaining.

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#39 CHRIS
November 27 2013, 01:07PM
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I HATE ROGERS, TSN is so much better. I cried when I heard I have to listen to Louie Debrusk explain the game of hockey to his audience like we are all children for the next 12years. May bad things happen to you Louie...... So that my suffering will end.

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#40 They're $hittie
November 27 2013, 09:28AM
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Hockey is now ruined, more Gene Principe

GOOD GRIEF

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#41 Romulus' Apotheosis
November 27 2013, 09:36AM
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They're $hittie wrote:

Hockey is now ruined, more Gene Principe

GOOD GRIEF

Come now… Gene is hilarious and a side-show. It's the commentariat that deserves scrutiny here.

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#42 Bryzarro World
November 27 2013, 10:09AM
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ADIOS RISHAUG!!!!

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#43 book¡e
November 27 2013, 11:38AM
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Dipstick wrote:

They didn't get rich by sitting on their asses complaining.

To be fair to Spydyr, our system has done a pretty good job of being biased towards certain groups of wealthy individuals and companies while not always providing an opportunity for individuals from less fortunate backgrounds to succeed. I love the market system for directing many aspects of the economy, but I would double the amount currently invested in public schools and programs targeted towards young individuals in general.

Having a society where economic 'winners' prosper is great, but it needs to provide everyone with a chance to succeed. Then, its up to them if they take it or not.

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#44 Dobbler
November 27 2013, 02:02PM
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HNIC has gotten worse over the years IMO. Don Cherry went from being an actual credible hockey commentator/analyst to a "sports entertainment personality". People tune in to coach's corner see what the blow-hard dinosaur is going to do, not to get any insight on the game.

I don't mind the sportsnet product. I'm glad that they'll be able to get better people and improve it, but I watch most of my games on SN already and have no major complaints (minor compaint -> Gene Principe)

On a side note...The white snow background makes the page numbers and "next" and "back" really hard to see.

Okay, whining done!

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#45 bleedblue
November 27 2013, 09:26AM
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Its time for the Communist Broadcasting Corp to go away. And drop Cherry off at the Tyrell Museum for display.

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#46 Bryzarro World
November 27 2013, 10:08AM
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The best thing that the NHL did for me was the lockout before this last one. It showed me that I didn't need hockey and opened my eyes to all the other things I could do with my time and money. I called it quits over this last lockout. I still follow the oilers from time to time but I don't go out of my way to watch and don't give katz a dime of my money. He wants to turn this team into a joke...well... the joke will be on him soon enough, the sheep just need to wake up and pull their heads out of their backsides

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#47 Spydyr
November 27 2013, 10:56AM
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book¡e wrote:

Yeah, stupid profit. Profit is terrible. Without profit and trade and markets we would be so much better off. Now let's go hunt some deer with our sharp sticks.

Yes, billionaires and millionaires get more money on the back of the working class.

The discrepancy between the rich and the rest of us continues to grow.

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#48 book¡e
November 27 2013, 11:31AM
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The Benevolent Orca wrote:

I don't see increase's coming. If this means more hockey on TV to watch, I'm all for it. TSN has dreadful commentary anyways, so good riddance.

One question from me. What happens to TSN now? Their viewership in Canada is going to plummet. Maybe they can work a stronger CFL deal. I'd be all over that.

I think we will finally get back to the great coverage of World Strongman Competitions that we were provided with in the 1990s.

It used to be that you could find a good caber tossing competition just by flipping through the channels, now even finding people carrying fridges in a 50 meter dash is difficult.

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#49 Joel
November 27 2013, 02:53PM
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Bryzarro World wrote:

Buddy... you don't and won't have to pay for all the turd channels you don't watch. Most likely save money and if you're glued to the tv, well, get a life.

Ok, you seem to be making assumptions.

Mainly, that if they unbundle channels, that it will only cost a fraction of your current cable bill to get the channels you actually watch.

What you don't seem to be taking into account is the nature of the monopoly, and you are assuming the benevolence of the cable companies (and Rogers specifically)

Sure, if you evenly divide what I pay for cable each month by the number of channels, it comes to less than a buck per channel.

But if you think for a minute that all channels will be priced evenly at that low low price, you are crazy.

Rogers will charge whatever the market will bear. This is their past practice in every other aspect of their businesss, they are a publicly traded corp that needs profits to placate shareholders, and they now have a monopoly on the most valuable TV content in Canada.

So how much is watching Oilers games worth to someone in Edmonton? Or watching the Leafs, or Habs, etc.

Expect to pay more for the sports channels necessary to watch the games than you are actually paying now for the bundle that includes TSN+Sportsnet+crap like OLN and the Speed network.

You'll have less channels, albeit probably losing the ones you didn't watch in the first place. And you'll be paying more.

If you think I'm wrong, please provide an example in modern history of a large public corporation gaining a long term, guaranteed monopoly over a valuable commodity by crushing its competitors and then lowering prices to the benefit of consumers.

I'll be waiting, because you won't find one.

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#50 book¡e
November 27 2013, 08:24AM
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I'm not convinced that it will cost the consumer more. The cost of advertising on sports events has increased significantly. This is because it's one of the very few opportunities to actually capture Viewers. Most other advertising opportunity on TV have been challenged by PVR's. People watch sports live so advertising is much more effective on live a broadcasts. I think this new deal represents the fact that sports market advertising is become very lucrative. We will see but I wouldn't agree that price increases are inevitable.

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