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Bruce Dowbiggin

Will Cable Cord Cutting Shock Pro Sports Back To Its Senses?

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If there’s one constant in modern sports it’s bewilderment at how high salaries have risen for elite athletes. Where a million dollars a year was once the “unheard-of” threshold for salaries, today’s stars are easily taking home 20, 40, even 50 million a year under the new economy in sports. Even college athletes, once forbidden to accept remuneration, are cashing in millions for their name, image or likeness.

When people complain about overpaid athletes to IDLM we simply say the money is in the business, who else do you think should get the cash? Ditto for franchise values, where the Denver Broncos recently sold for a staggering $4.65 B. and the Washington Commanders might fetch $6B.

Largely the infusion of riches in pro sports has come from TV and digital-rights contracts between leagues and regional sports networks (RSN). Those RSNs are the carriers of the local and regional teams. Packaged through cable or satellite carriers they deliver valuable programming dollars to leagues. And for smaller media markets they are a vital source of revenue to keep up with the big boys whose ancillary revenues are pumped by many more customers.

As just one example, the MLB St. Louis Cardinals are currently earning about $66 million a year from their 15-year, $1B deal they signed with Fox Sports in 2015. There are 18 other teams on Sinclair/Diamond local TV deals, all of whom rely on RSNs to play New York salaries in Pittsburgh or Kansas City.

In Canada, as opposed to the American model, regional sports contracts are held directly by either TSN or Sportsnet, national carriers. The monopoly status has suppressed revenues to Canadian NHL, MLB or NBA teams relative to the deals cut in large markets such as New York’s tri-state area, southern California or Chicago.

Recently TV rights packages values were boosted by the arrival of Amazon, YouTube and Google which began to compete with traditional networks for U.S. broadcast rights. But now RSNs are threatened by the cord-cutting trend that sees American and Canadian consumers dumping their traditional bundlers of services to go à la carte digital directly with the producers of programming. ( In Canada the DAZN network has gone head-to-head with TSN for NFL games on a digital deal with the league.)

This past week the American cable giant Comcast reported a year-over-year 11 percent loss in its customer base. That’s about two million Americans saying “I can do without the middle men and the useless channels. I want to subscribe directly to the producers of the material I want to see.” From a peak of 110.5 million customers in 2013 the Comcast market is estimated to drop as low as 65 million customers by 2025.

In part this is consumers shedding programming bundles they never watch and bloated subscription fees as they tighten their belts. It’s also a reflection on the Netflix streaming revolution sparked by Covid-19 lockdowns that saw locked-down consumers get used to the convenience of directly streaming programming from Netflix or Amazon Prime or Disney without paying for a raft of useless channels.

Advertisers have noticed, too. They are headed to streaming services, where their messages can be more targeted to desired audiences than cable TVs scattershot approach.

The impact is being seen in the U.S. where Diamond Sports Group, which controls a huge portion of the pro sports RSNs, is said to be headed to bankruptcy court to restructure its $8.6B in debt. “There are a lot of business and financial terms and policies to work through,” says Deadspin, “but the long and short of it is that DSG is likely going to skip an interest payment it owes, which should be enough for them to get to the bankruptcy claim they’ve been rumored to be after for a while now.”

Bloomberg reported that if they file for bankruptcy it could “potentially put at risk crucial broadcasting rights revenues” for major North American sports networks. Greg Boris, a sports management professor at Adelphi University summed up the looming disaster for pro sports. He told The Score that RSNs have “been a golden goose. You remove cable TV from the scenario, and franchises are worth a fraction of what they are today, players make a fraction of their salaries today… the boom has been going on for almost 30 years. But the vast majority of the people that pay never watch (services they purchase). That’s been the model.”

Leagues are now investigating what to do if the RSN model collapses. Currently the leagues operate direct streaming services for customers wishing to watch out-of-town games not involving their local team. They could simply add the RSN rights too these streams.But direct-to-consumer can be very costly. The Disney+ operation was thought to be a slam dunk, but now management at Disney admits it will be a few years before the operation gets out of the red. American carrier Comcast launched the Peacock network as an outlet for NBC content. It lost $2.5B in 2022 and projects to lose another $2B in 2023. Similar startups such as CBC Gem have been flops.

Direct-to-consumer is also not the easy money machine that RSNs were. If a league or a team operates a direct customer service it takes on the responsibility of signing up and maintaining its customer base. That means dealing with the fickle fans who might drop his/ her package to an NHL, NFL, MLB or NBA team for a few years till the club improves.

That could be a disaster for underperforming teams like MLB’s Pirates or NHL Vancouver Canucks who had the assurance that, while their programming sucked, the other offerings on the cable package were worth customers retaining the service. Direct-to-consumer could, however, be a ray of hope for fans of bad teams that force clubs to finally get serious about producing a winning product.

This potential financial shortfall is probably one of the reason pro sports has so fervently embraced sports betting— to the annoyance of many fans. If the TV money goes, they’ll need every dollar they can find to pay out the contracts they’ve been issuing with impunity the past decade.

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Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. Inexact Science: The Six Most Compelling Draft Years In NHL History, his new book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via http://brucedowbigginbooks.ca/book-personalaccount.aspx

BRUCE DOWBIGGIN Award-winning Author and Broadcaster Bruce Dowbiggin's career is unmatched in Canada for its diversity and breadth of experience . He is currently the editor and publisher of Not The Public Broadcaster website and is also a contributor to SiriusXM Canada Talks. His new book Cap In Hand was released in the fall of 2018. Bruce's career has included successful stints in television, radio and print. A two-time winner of the Gemini Award as Canada's top television sports broadcaster for his work with CBC-TV, Mr. Dowbiggin is also the best-selling author of "Money Players" (finalist for the 2004 National Business Book Award) and two new books-- Ice Storm: The Rise and Fall of the Greatest Vancouver Canucks Team Ever for Greystone Press and Grant Fuhr: Portrait of a Champion for Random House. His ground-breaking investigations into the life and times of Alan Eagleson led to his selection as the winner of the Gemini for Canada's top sportscaster in 1993 and again in 1996. This work earned him the reputation as one of Canada's top investigative journalists in any field. He was a featured columnist for the Calgary Herald (1998-2009) and the Globe & Mail (2009-2013) where his incisive style and wit on sports media and business won him many readers.

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Bruce Dowbiggin

Coyotes Ugly: The Sad Obsession Of Gary Bettman

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It came to this. Playing in the 6,000 seat Mullet Arena on the campus of Arizona State. Owned by a luckless guy who eschewed the public spotlight. Out of the playoffs, their bags packed for who knows where, the Arizona (née Phoenix) Coyotes gave an appreciative wave to the tiny crowd gathered to say  Thanks For The Memories.

With that they were history. Although NHL commissioner-for-life Gary Bettman has promised the last in a set of hapless owners that he can revive the franchise for a cool billion should he build the rink that no one was willing to build for the Yotes the past 20 years.

The Arizona Republic said good riddance. “Metro Phoenix lost the Coyotes because we are an oversaturated professional and college sports market with an endless supply of sunshine and recreational choices. Arizona may have dodged a slapshot:

We have the NFL Cardinals, the MLB Diamondbacks, the NBA Suns, MLB spring training, the WM Phoenix Open, the Phoenix Rising, the WNBA Mercury, the Indoor Football League Rattlers and the Arizona State Sun Devils. There hasn’t been a household name on the Coyotes since Shane Doan, and half of Phoenix probably doesn’t know who he was”.

Likely they’ll be a financial success in Salt Lake City where there’s a viable owner, lots of money and a will to make it work. They’ll need a will because— stop me if you’ve heard this before about the Coyotes—  the rink they’ll play in this fall has only 12,500 unobstructed views for hockey.

Watching this farce we recalled getting a call from Blackberry co-founder Jim Balsillie in 2008, shortly after our book Money Players was a finalist for the Canadian Business Book of The Year. We’d written a fair bit about the Coyotes in our work and someone had told Balsillie we might be the ones to talk to about a plan he was concocting to buy the bankrupt Coyotes and eventually move them to Hamilton.

Balsillie was salty over the way he’d been used as a stalking horse in the financial troubles of the Pittsburgh Penguins in 1990s. Flush with money from the huge success of RIM, Balsillie offered to buy the Pens, with an eye to moving them to southern Ontario if Pittsburgh didn’t help build a new arena for the team.

In time, Balsillie saw that Bettman was only trying to protect the investment Mario Lemieux and others had in the Pens. Balsillie was the black hat who eventually spooked Pittsburgh into giving the current owners what they wanted. At the end of the day, Mario got his money and Balsillie was given a “thanks for trying”: parting gift of nebulous promises.

Still smarting, Balsille vowed not to be used again. in his desire to bring the NHL to southern Ontario. So when the Coyotes owner Jerry Moyes threw the keys to the team on Bettman’s desk, he saw an opening in the bankruptcy that followed. Seeing Bettman as the impediment, Balsillie decided to buy the team out of bankruptcy, a process the NHL could not legally prevent.

What Balsillie wanted to know was “What then? How would Bettman fight back?” We told him that no one flouts Bettman’s authority within the NHL. (All the current owners since 1993 have come aboard on his watch.)  And that he’d have to get the Board of Governors to approve his purchase. Odds: Nil.

That’s what happened. Rather than admit that the Valley of the Sun was poisoned for hockey, Bettman found another series of undercapitalized marks to front the franchise while the league quietly propped up the operation. No longer was the Coyotes’  failure about the fans of Arizona. It was about Gary Bettman’s pride.

Protestors stand outside a press conference in Tempe featuring Arizona Coyotes executives discussing propositions related to a new arena and entertainment district. (Photo by Brooklyn Hall/ Cronkite News)

Where he had meekly let Atlanta move to Winnipeg he fought like hell to save Arizona. And his power. (His obstinacy on U.S. network TV is another story.)

Fast forward to last week and the abject failure of that process. The Arizona Republic naively fawned on Bettman for his many attempts to save the team. In fact, they were just attempts to buttress his grip on the league. While the Coyotes may have been a mess, Bettman has succeeded in preserving the investments of most of the business people who bought his NHL business prospectus.

Sometimes it meant riding into Calgary to chastise the locals for their parsimony in not giving the Flames a new rink. Ditto for Edmonton. Ditto for Winnipeg  and other cities. Other times it was to shore up weak partners to protect the equity of other prosperous cities.  Sometimes it was to tell Quebec City, “Not gonna’ happen.”

For his loyalty to the owners and through some luck— Gretzky to the Kings— Bettman has made the NHL work in places no one might’ve imagined. Nashville. Raleigh. Tampa. Las Vegas. Dallas. Not at the level of the NFL, NBA or MLB, but at a comfortable equity-affirming status. Nothing happens without his say-so in the NHL. Or without him getting credit. Secondary NHL execs who wanted credit for their innovations were quietly punted.

When Houston finally gets a franchise from Gary they’ll part with $1.5 billion for the honour. While the commissioner has played down new franchises and expanded playoffs, you can bet your last dollar that he’s told owners they’re in line for more expansion cash— cash they don’t have to split with players in collective bargaining.

One more certainty. As long as Bettman rules the NHL you won’t see an NHL team back in Arizona.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. Inexact Science: The Six Most Compelling Draft Years In NHL History, his new book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

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Bruce Dowbiggin

Why Are Canadian Mayors So Far Left And Out Of Touch?

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‘The City of Edmonton pays for a 22-person climate team but doesn’t know who on that team is responsible for what, or what that team has accomplished. Meanwhile, Council takes a pay raise and bumps our property taxes by 8.6%”  @michaelistuart

We just returned from a long trip to discover that the City of Calgary wants to potentially re-zone our neighbourhood. Bridle Estates is a collection of 175 bungalow villas for people aged 55-plus. While some people still work most of the inhabitants are retirees. The city’s earnest idea is to create low-cost housing for the tens of thousands arriving here in the city from away.

You can see why a city hall obsessed with white privilege wants to democratize our neck of the south-west corner of the city. Enforced justice has a great tradition. 1970s American cities decided that bussing was the antidote to segregation. After a SCOTUS decision allowing the practice in 1971 (back when liberals owned the court) progressives pushed through an aggressive plan to bus kids from the inner city to the leafy suburbs. And vice versa.

It worked like a charm. For conservatives, that is. It radicalized a generation of voters who soon installed Ronald Reagan as president, and empty buses went back to the depot. The Democrats went from the party of the people to the party people in Hollywood. With time dulling memories, contemporary Woke folk are reviving the integration dream. This time the mostly white suburbs will bear the brunt of the government’s immigration fixation (400K-plus in the third quarter).

There are meetings planned where citizens will be able to address their elected officials— no doubt in a respectful voice. But anyone who’s dealt with Climate Crisis Barbie— Mayor Jyoti Gondek— has much optimism. This is a mayor who exploited a three-way split in centre-right voting here to declare a Climate Emergency on her first day in office.

Then she rolled out hate-speech laws to protect her from being razzed in public. For this and other fabulist blunders— her messing with the new arena project drove a worse deal and a two-year delay in a home for the Calgary Flames— she faced a recall project (which failed to collect over 400K voters’ signatures).

With a housing bubble expanding everyday, Her Tone Deafness has decided that owning a home is so passé. ”We are starting to see a segment of the population reject this idea of owning a home and they are moving towards rental, because it gives them more freedom.” She added that people have become “much more liberated around what housing looks like and what the tenure of housing looks like.”

As the Calgary’s schmozzles and Edmonton’s dabble in climate extravagance illustrate the municipal level of government in Canada is a few lobsters shy of a clambake. Across the country major cities are in the hands of radical NDP soldiers or virtue warriors who would rather have symbols than sewers to talk about.

In Toronto, Jack Layton’s widow Olivia Chow is leveraging her 37 percent mandate to make Toronto a kinder, Wok-er city. In Vancouver and Victoria, B.C., the open-air drug agendas of new mayors and city councils have sent capital fleeing elsewhere. Despite crime and construction chaos, Montreal mayor Valerie Plante won a second term, by emphasizing her gender.

In times when the coffers were full, this ESG theatre might have been a simple inconvenience. But since the federal and provincial governments began shoving responsibilities and costs downward to municipalities there is no wiggle room for grandstanding politicians at the city level. Or for hapless amateurs.

With the public incensed over residential property tax increases on one side and the blandishments of aggressive developers on the other, competent governance has never been more needed in the urban areas. While feds can (and have) printed money to escape their headaches and the provinces can offload costs onto the cities, the municipalities have no room for risk.

The time bomb in this equation is the debt load that the three levels can sustain. After this week’s budget, federal spending is up $238B, or 80 percent since 2015.  Coming off this free-spending budget the feds have pushed the federal debt to more than $1.2 trillion this year (in 2015, the debt was $616 billion.) None of the provinces has shown any appetite for the 1990s-style cuts to reduce their indebtedness. Leaving cities to crank the property-tax handle again.

So far, Canada’s cities have been able to use friendly municipal bonds to ease their fiscal problems. But if the Canadian economy continues its tepid performance with no reduction in debt, financial experts tell us that there could be a flight from Canadian municipal bonds— with a consequent spike in interest rates elsewhere.

The backlash on free-spending governments will be severe— and restricted municipalities will be hardest hit. None of this is resonating with Canadians still flush with cash from Covid. The stock markets are still buoyant and those living in cashbox houses are counting their dividends. Willful denial is the Trudeau legacy.

Which is why so many Canadian were shocked last week when American AntiTrump media star Bill Maher did an intervention on Canadian conceits. Using the True North as his warning to America, Maher ripped apart the gauzy leftist dream of Canada as the perfect society, the Sweden north of Estevan. By the time he was done, the single-payer myth was bleeding on the ground.

Maher knows that the bill is coming due for free-spending Canada and its climate charlatans. (The IMF is already warning of a global crisis over debt loads.) The question is: will Canadians come to the same conclusion before it’s too late to save the cities?

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

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