CPL TV Contract

[yellowsweatygorilla]

27 minutes ago, zen said:

Rooted in what? As I said in a previous post. MediaPros interest are not the same as the league's. They will license to whichever broadcaster bids the highest, and that may not be the broadcaster that's best for providing the league with exposure.

I am not certain this will be the case. With the Mediapro tied down to the league for the long-term, in order to recoup its money, they need the league to succeed. If the league fails because Mediapro's practices lead to obscurity, Mediapro does not benefit. 

[Guest]

26 minutes ago, zen said:

Rooted in what? As I said in a previous post. MediaPros interest are not the same as the league's. They will license to whichever broadcaster bids the highest, and that may not be the broadcaster that's best for providing the league with exposure. Without mainstream exposure, it is likely that the only people that will watch this will be diehards. Additionally, to be mainstream the league needs to be on Sportsnet or TSN, but they have a vested interest in MLS. So if there is no mainstream appeal, the only people watching the league in 10 years are diehards, and mainstream media has no incentive to broadcast the league, how do they plan on getting a better deal? How will this league grow?

I honestly think they've humstrung themselves going down this path by selling off the rights to MediaPro. How much control will the really have on where the content is distributed? If they do have some control over these negotiations maybe there is hope yet, otherwise I do not understand this decision.

Rooted in Canada. In other words, with a large population of interested Canadians who will be the basis for revenue and growth.

You seem to be saying that Canadians won't be interested but other countries will be and will thus make higher bids. That seems extremely unlikely. They will be producing Canadian content and it is Canadians who will be most interested. Whilst your point about mis-alignment of interests could be true in theory, I just can't see it being true in practice.

[BringBackTheBlizzard]

10 minutes ago, yellowsweatygorilla said:

...If the league fails because Mediapro's practices lead to obscurity, Mediapro does not benefit. 

On the flipside, Mediapro needs people to sign up and pay for its content through apps etc, so there's a limit to how many games can ever be shown through mainstream cable either locally or nationally before that ceases to be viable. It will be interesting to see how the league launch is handled. One off broadcast of Forge vs York 9 on mainstream cable for maximum exposure or fans have to sign up for the app?

[BuzzAndSting]

1 minute ago, BringBackTheBlizzard said:

On the flipside, Mediapro needs people to sign up and pay for its content through apps etc, so there's a limit to how many games can ever be shown through mainstream cable either locally or nationally before that ceases to be viable. It will be interesting to see how the league launch is handled. One off broadcast of Forge vs York 9 on mainstream cable for maximum exposure or fans have to sign up for the app?

What’s preventing mediaPRO from selling the entirety of games to a mainstream cable company?

[BringBackTheBlizzard]

Nothing. It's at their discretion apparently. That's why what happens on the league launch will be interesting to watch. Will they go that route or will they keep it in house?

[Watchmen]

1 hour ago, yellowsweatygorilla said:

I am not certain this will be the case. With the Mediapro tied down to the league for the long-term, in order to recoup its money, they need the league to succeed. If the league fails because Mediapro's practices lead to obscurity, Mediapro does not benefit. 

While I understand what you're saying and I'm not saying that Mediapro isn't going to try, but there's also possibly only so much they're actually willing to do.  NBC is paying the NHL a billion dollars over 10 years and they're coverage and production is shit.  They might know they have a cult following in Canadian soccer they can get by on and aren't necessarily willing to invest enough to push it in to the mainstream.

[Watchmen]

1 hour ago, BuzzAndSting said:

What’s preventing mediaPRO from selling the entirety of games to a mainstream cable company?

Why would a mainstream cable company buy the entirety of games from a third party at a higher rate than just producing it in house?

[BringBackTheBlizzard]

If this article is accurate, it looks like it will be all in house on the app initially, but they have a never say never posture on having a cable deal at some point during the ten years:

https://www.vancourier.com/canadian-premier-league-joins-forces-with-spain-based-media-partner-1.23640212

...The initial plan is to have all CPL games available via the league's app/soccer streaming channel, with some matches for free. Viewers will have to pay to get more.

But Mediapro is open to anything, looking for partners on any platform. Mitchell says there has been a "serious appetite" from Canadian domestic partners...

[masster]

8 hours ago, Gopherbashi said:

Can someone who's good at math tell me how much of this $200m is going to the Ottawa Fury due to their preferred place as a season one start-up investor?

I want to Haha, Thanks and Like this post. Somebody tell me how to do that!

[Unnamed Trialist]

If I were an investor or in a potential ownership group, I would think that this tv deal would be a major selling point for getting new partners, ensuring public investment on stadiums, getting sponsors to come in early. It might be enough to get a group over the edge and into the league, and also sooner rather than later. 

If you look at the press release calculating 2000 games, right now we are looking at something like 150 games a year in CPL (I have not done the exact numbers). So they are calculating that on the basis of more teams, effectively an average of over 12 teams . Unless Ontario L10 is part of that, because MNT would only be a dozen a year if that.  

The fact that we are talking 10 years is huge as it gives clubs a longer term perspective and enables part of the initial outlay to be amortized over a longer period: you are not under the pressure to do so in 2-3 years, which is what we thought was the current perspective (if folks are looking at tickets sold and salary cap, and looking at break-even points from day one, that is not very long term). 

I suspect that this deal is going to help the league sponsor to fall into place more readily (I understand that we should be the XXXX CPL).

[masster]

3 hours ago, zen said:

Rooted in what? As I said in a previous post. MediaPros interest are not the same as the league's. They will license to whichever broadcaster bids the highest, and that may not be the broadcaster that's best for providing the league with exposure. Without mainstream exposure, it is likely that the only people that will watch this will be diehards. Additionally, to be mainstream the league needs to be on Sportsnet or TSN, but they have a vested interest in MLS. So if there is no mainstream appeal, the only people watching the league in 10 years are diehards, and mainstream media has no incentive to broadcast the league, how do they plan on getting a better deal? How will this league grow?

I honestly think they've humstrung themselves going down this path by selling off the rights to MediaPro. How much control will the really have on where the content is distributed? If they do have some control over these negotiations maybe there is hope yet, otherwise I do not understand this decision.

I've seen you make this point a few times now, but you are missing a very key factor. These deals contain clauses with guarantees and thresholds for minimum reach and exposure. I am very aware of this from following the Serie A broadcast negotiations.

CSB would/could have included requirements for a minimum number of nationally televised games, broadcast partners that reach a certain percentage of the population, broadcasts in x number of countries, etc. Clauses such as these would be standard.

Now how much leverage CSB had in negotiating these clauses is a fair question, but nobody knows for sure until we see how this plays out.

So while Mediapro's interests are not exactly the same as the CPL's, there is a lot of overlap. Which is why a long 10 year agreement makes so much sense. Mediapro arent going to receive a return on their investment in year 1 or 2. There is very little value in a league that has no brand equity. So it is now Mediapro's financial incentive to get the league as much exposure as possible to build the value of the properties they have just invested in, so they can hopefully see a return in the future.

[Unnamed Trialist]

This has made the Spanish economic press today, in Expansión, which is one of the two leading economic dailies. 

http://www.expansion.com/directivos/deporte-negocio/2019/02/21/5c6d75f6468aebb94e8b45fe.html

A few things that perhaps were not clear in the other articles.

One is that that they will open up a Toronto office, and that CSB sold the rights through ThePostGame (their article is here: http://www.thepostgame.com/canadian-soccer-business-premier-league-mediapro ), who were the brokers of the deal. They were hired by CSB last August.

Second, that they have the rights to the NTs, male and female, for home games, so I imagine they will actually start to encourage them to be organised (maybe we can get some minimums beyond official matches) .

The set-up is predicted to be OTT, over-the-top, which is full media offer, usually free access, through the internet. They are going to produced regular programmes on the sport and documentaries, which is one of Media PRO's specialities. 

One of the key points is the intention to fully professionalise football broadcasting in Canada, I suppose they are talking about production values. 

It also mentions that they currently have the league rights in relatively small markets, if that were a doubt, like Slovenia, Kenya, Angola, Bolivia, so they seem to be willing to work with more modest scales along with heftier ones. 

Edited February 21, 2019 by Unnamed Trialist

[BuzzAndSting]

2 hours ago, Watchmen said:

Why would a mainstream cable company buy the entirety of games from a third party at a higher rate than just producing it in house?

Because mediaPRO now owns the rights to all CPL, national team and V Cup games?!

They’re going to produce the games and prepare complete broadcasts which they can then air on the CanPL app, another streaming service or sell to cable or TV broadcasters domestically or internationally. I also assume they they will produce highlight packages that they can sell to the like of TSN or Sportsnet for news shows. And it sounds like they will be producing content like panel shows, documentaries and news shows which again they can air themselves or sell.

Edited February 21, 2019 by BuzzAndSting

[1996]

The only thing I’m wondering here is , like I think Kent posted , are the CPL teams actually getting part of the 200 million or is that money the amount Mediapro is spending on production of games and other content. Even if this figure is for production costs it still is a good deal for a new league just starting off, moreover , just being associated with such a major player in world soccer like these guys seem to be has to be a good thing for the league .

[Winnipeg Fury]

44 minutes ago, 1996 said:

The only thing I’m wondering here is , like I think Kent posted , are the CPL teams actually getting part of the 200 million or is that money the amount Mediapro is spending on production of games and other content. Even if this figure is for production costs it still is a good deal for a new league just starting off, moreover , just being associated with such a major player in world soccer like these guys seem to be has to be a good thing for the league .

This is a fantastic deal for CPL and it's clubs.  As Ted pointed out, the league/clubs should be in for $150 million over the 10 years.

This deal insures CPL is going be in business for a very long time.

 

[BringBackTheBlizzard]

1 hour ago, 1996 said:

The only thing I’m wondering here is , like I think Kent posted , are the CPL teams actually getting part of the 200 million or is that money the amount Mediapro is spending on production of games and other content....

If it is 50k a pop for a mainstream cable quality  live broadcast, you are looking at over $5 million per season with 7 teams just for that expense item alone before you get into the Voyageurs Cup and the national teams. If they expect to expand to 16 by 2026, it's not difficult to start generating some very large numbers on projected money "invested".

Now if you eventually need $20 million to cover costs and start generating a net profit to justify a rights fee you need in back of an envelope terms more than 100,000 subscribers paying $200 plus tax each per year. Commercials revenue would help put a dent in that obviously, but the bottom line is that there better be a lot of people out there, who are willing to pay a significant monthly fee for the content if an app based streaming channel is going to be viable.

Edited February 21, 2019 by BringBackTheBlizzard

[Cheeta]

Short answer.

If the guaranteed club revenue from this deal is exactly zero dollars ($0), but I very much doubt that it is, the league would still be insane not to have taken this deal.   

[Stouffvillain]

I understand where some of the concern comes from.  The league is locked in for a long time, at a set rate, with no further say in how their product gets distributed.

The positives outweigh the negatives though.  The league has partnered with a big time media player with experience producing high quality video.  Mediapro wouldn't get involved for that length of time, for that much money and not have the growth/exposure of the league as a priority. 

Since Mediapro will be taking responsibility for all production costs any other distributor (say TSN/SN etc.) would only have to pay the fee to show the games.  In theory they would also be able to buy as much or a little as they want.  TSN/SN may only be interested in a game a week right now, this deal in theory, gives them more flexibility that way.  Bell/Rogers would now be in negotiations with Mediapro who could pursue other legitimate avenues, rather than a newbie league trying to get a foothold. 

The bottom line is that the deal means that the league will be around in 10 years.  As many on-lookers were worried about the viability over the first few years, if you could guarantee the first 10 years to owners and fans a year ago I don't think anyone turns that down. 

[Unnamed Trialist]

No tv rights deal is ever signed that does not have an impact on clubs, so we can discard this idea of no payback at all: there has to be some. If it were half a million each the first year, that would be something like 10% of a total budget, so it is not a lot.

On top of that, MediaPRO may ask clubs to improve facilities for press, and broadcasting, as well as unify colour of stands, so there could be a cost to clubs to adjust to a tv contract.

Usually the league would decide on what clubs get. There would, first, be a minimum for each, annually. Then, in function of what viewer ratings are, they could be scaled, as happens in all leagues in the world (except maybe a place like China, though I do not know). But that may take until a second year to determine who rates higher and gets a higher coefficient in tv rights payments. Right now, what club would be the biggest tv draw? I believe this: if there were a team in Montreal/Laval next year, that team would likely be #1, as it would most clearly corner a large, specifically defined market. 

Otherwise, if a club wants a bigger share of tv rights, it would have to do any of a few things: be a winner; have some higher profile players; have a great home atmosphere; create narratives that attract audiences (the old Cinderella story, for example). Those things may also cost more to a team, as it tries to merit a greater tv right cut.

Remember that as the league adds teams, the relative % going to any one club would actually decrease over the years, so that if you don't want to do that, you have to reserve for later years. 

Given the total sum, I would conclude then that MediaPRO would not be spending 20 million yearly. Though there does appear to be initial outlays, like an office, and setting up mobile units, you would still imagine that in a few years, when there are 12 teams, the amount spent would be greater, there will be a curve. 

In Spain, on BeIN, we get Australia soccer league, and I don't think it is watched much. It is there as filler. MLS is on Eurosport, that I think is followed a bit more, as some players have recognition, but it still must be in the tens of thousands. So the question: what other countries might be interested in watching CPL?

 

[zen]

8 hours ago, dsqpr said:

Rooted in Canada. In other words, with a large population of interested Canadians who will be the basis for revenue and growth.

You seem to be saying that Canadians won't be interested but other countries will be and will thus make higher bids. That seems extremely unlikely. They will be producing Canadian content and it is Canadians who will be most interested. Whilst your point about mis-alignment of interests could be true in theory, I just can't see it being true in practice.

Not what I am saying. I'm saying one die hard Canadian fans will be interested in a niche product if it continues to be so over the length of the contract.

[Watchmen]

4 hours ago, BuzzAndSting said:

Because mediaPRO now owns the rights to all CPL, national team and V Cup games?!

They’re going to produce the games and prepare complete broadcasts which they can then air on the CanPL app, another streaming service or sell to cable or TV broadcasters domestically or internationally. I also assume they they will produce highlight packages that they can sell to the like of TSN or Sportsnet for news shows. And it sounds like they will be producing content like panel shows, documentaries and news shows which again they can air themselves or sell.

But they weren't really that interested in doing that before.  And now they'd have to pay more to do so, as mediaPRO would have to sell the rights to them at a profit for themselves.  So while they may be interested in buying the occasional game, I don't see any network buying the entirety of the games.  

[zen]

5 hours ago, masster said:

I've seen you make this point a few times now, but you are missing a very key factor. These deals contain clauses with guarantees and thresholds for minimum reach and exposure. I am very aware of this from following the Serie A broadcast negotiations.

CSB would/could have included requirements for a minimum number of nationally televised games, broadcast partners that reach a certain percentage of the population, broadcasts in x number of countries, etc. Clauses such as these would be standard.

Now how much leverage CSB had in negotiating these clauses is a fair question, but nobody knows for sure until we see how this plays out.

So while Mediapro's interests are not exactly the same as the CPL's, there is a lot of overlap. Which is why a long 10 year agreement makes so much sense. Mediapro arent going to receive a return on their investment in year 1 or 2. There is very little value in a league that has no brand equity. So it is now Mediapro's financial incentive to get the league as much exposure as possible to build the value of the properties they have just invested in, so they can hopefully see a return in the future.

I am hoping that's the case. If there is no growth, MediaPro can simply walk away after the 10 years are up.

I'm assuming World Cup rights are not tied to this?

[youllneverwalkalone]

Just guessing the each club gets some minimum cash flow, and CSB will share some level of profit after the $200m is recouped. Like an old school record deal, just without the artists getting fucked in the end (hopefully).

[Stouffvillain]

1 minute ago, Watchmen said:

But they weren't really that interested in doing that before.  And now they'd have to pay more to do so, as mediaPRO would have to sell the rights to them at a profit for themselves.  So while they may be interested in buying the occasional game, I don't see any network buying the entirety of the games.  

Unless you have some inside knowledge I wouldn't say that TSN/SN weren't interested before.  They weren't interested in a 10 year deal yes but this allows them to get the product with significantly less risk.  

[BuzzAndSting]

21 minutes ago, Watchmen said:

But they weren't really that interested in doing that before.  And now they'd have to pay more to do so, as mediaPRO would have to sell the rights to them at a profit for themselves.  So while they may be interested in buying the occasional game, I don't see any network buying the entirety of the games.  

That’s all speculation and opinion, who knows what will happen down the road.