CFL extends TV/radio/digital contract with TSN/RDS through 2021: a good move?

The CFL's relationship with TSN and TSN parent Bell Media just got even closer, as the league announced Thursday night at its Inside The CFL event that it's extended its current TV/radio/digital broadcasting deal with TSN and RDS (also owned by Bell Media) through 2021. The current deal, which has brought an incredible amount of new revenue to the league, was set to expire after the 2018 season. It's not particularly surprising that the league has opted to continue its partnership with TSN now that Bell (together with MLSE chairman Larry Tanenbaum) has bought the Toronto Argonauts, but it is interesting to see these rights awarded so far in advance of the expiry of the current deal. That could carry both positives and negatives for the league.

Essentially, negotiating this extension at this point rather than closer to 2018 provides the CFL with some long-term stability and security. It also could be a useful hedge against declining ratings or a potential advertising bubble. The league will be under less immediate pressure to draw big numbers of viewers now, and if there's some major crash in the value of TV sports rights, the CFL won't be hurt by it until at least 2022. Moreover, this gives TSN yet more incentive (and they already had plenty) to work to promote the CFL and make it a pillar of their own long-term strategy. However, locking into a long-term deal now rather than near the contract's expiry, and doing so without any apparent negotiations with other broadcasters, may limit the financial upside for the CFL. In particular, if the game continues to grow and the values of sports rights continue to rise the way they have over the last decade, the decision to extend this deal now may look like a bargain for TSN.

Of course, the challenge in evaluating this deal right now is that we don't know the financial terms. We can make a guess, though. The previous deal was estimated to be between $30 and $36 million annually league-wide, so between $3 and $4 million per team, and the public financial statements we have seen from teams like Edmonton and Winnipeg appear to support that (especially if you factor in that some of the revenue has reportedly been kept for the league office). It seems highly unlikely that the CFL would agree to anything less than that given that they weren't under time pressure here, and the most likely probablity is that they managed to get at least some level of increase for these new three years. The question is if they were able to get enough of an increase to make locking in a deal now worthwhile.

It's notable that the CFL didn't necessarily have a lot of leverage even if they had waited, though, and a big part of that is thanks to that Argonauts' sale. That deal gave Bell (and thus TSN) even more incentive to work with and support the CFL. It also illustrated how little interest Rogers, their primary competitor with a national sports network, has in the league; the Argos' deal was initially supposed to involve them being bought by Maple Leaf Sports and Entertainment (owned by Bell, Rogers and Tanenbaum), but Rogers wanted nothing to do with the team. That situation's unlikely to change in the near future, too; while the CFL is a valuable TV property, Rogers has a competing summer one that they completely own (the Toronto Blue Jays), and they also now have national NHL rights through 2025. Under those circumstances, it's hard to see them outbidding TSN for the CFL.

The CBC also could theoretically have been involved, but the public broadcaster doesn't have enough money to make a strong play for the entire CFL, and it's unlikely that we'll see the league return to a split multi-network contract. We could perhaps have seen a play from Shaw/Global, but that would have carried challenges too, particularly the lack of a designated sports channel there. Global might love some CFL games, but they probably wouldn't want the whole schedule. Thus, TSN was just about the league's main viable option at this point.

Keep in mind that TSN has been a very good partner for the CFL to date as well. The network's still doing quite well in the ratings despite the loss of the NHL, and in particular, its Sportscentre broadcasts have continued to be a strong presence. The CFL gets a lot of promotion from TSN, through Sportscentre and other shows as well as outright advertisements of upcoming games, and TSN also generally does a strong job of broadcasting the CFL's games. There's also plenty of synergy with TSN's expanding radio presence across the country (including a new Hamilton station on its way); those TSN radio stations talk lots of CFL, and most of them broadcast their local team's games, boosting both radio and TV ratings. The CFL's one of the most important properties TSN has at this point, and the network appears to realize that. Thus, maintaining that relationship has benefits. Having that relationship established for the long term also helps; TSN can freely build up the CFL without worrying about helping a property that could potentially turn to one of their competitors.

As discussed earlier, TSN was the CFL's main option at this point, so the decision to extend isn't really surprising. The timing is what's really interesting, and whether the timing of this works out for the league hinges on what happens between now and 2018. If the CFL's popularity wanes or stays about the same, extending their deal while they were in a position of strength may be very beneficial for the league, especially considering that there wasn't likely to be a ton of competitive bidding. If the CFL manages to pull off substantial growth, though, this could be a big bargain for TSN. With this move, the CFL has given itself and its teams financial stability for years to come, but the question is if it's potentially limited its growth and profits by doing so.