Income · Stocks to Consider and Updates

NHL and Rogers Communications Announce Multimedia Rights Agreement

RCIRogers Communications, Inc. (NYSE: RCI – $44.46)  and the National Hockey League announced a landmark 12-year broadcast and multimedia agreement that includes all national rights to NHL games on all platforms in all languages. The agreement, the largest media rights deal in NHL history, begins with the 2014-15 season and continues through the 2025-26 season. This marks the first time a premium North American-wide sports league has granted all of its national (Canadian) rights to one company on a long-term basis. Rogers also announced it has selected broadcasters CBC for Saturday games and TVA for separate sub-licensing deals for English-language broadcasts of Hockey Night in Canada and all national French-language multimedia rights, respectively. The deal includes a C$150 million upfront payment and C$300 million per year for the content rights increasing to mid-C$500 million by the end of the contract and is expected to be accretive to Rogers’ earnings from sub-licensing and advertising. More importantly, such a deal increases RCI’s control over important sports content. The agreement will not impact regional NHL game rights (about 50 games per year per team), which are currently negotiated separately, although Rogers already has regional rights to all Canadian teams except the Winnipeg Jets and the Montreal Canadiens. With Canadian broadcasting vulnerable to Internet and unbundling threats, I believe Rogers’ focus on sports has a lot of potential and this deal is of strategic importance. The new hockey rights will support Rogers’ overall media platform and enhance consumer demand for its Sportsnet specialty channels, particularly in an a la carte pricing environment. The digital rights also provide better cross-platform integration opportunities for Rogers which has media, Internet, cable and wireless businesses. Toronto-based Rogers Communications, yielding 3.7%, is a solid holding for income oriented accounts.



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