CBC vs. NHL goes into overtime

In his new memoir, Richard Stursberg recalls endless negotiations with Gary Bettman

CBC vs. NHL goes into overtime

Adrian Wyld/CP

In 2004, despite the advice of friends and family—including his father Peter, the celebrated Second World War CBC correspondent—Richard Stursberg accepted the position of head of CBC English television. As part of his strategy to revitalize the corporation’s cratering audiences, he was determined to keep CBC sports alive and profitable. After the dispiriting losses of the 2010 Vancouver Winter Olympics bid, the curling championships and CFL coverage to the deep pockets of Ivan Fecan’s CTV and TSN, maintaining a viable sports department meant above all preserving the rights to the most iconic (and lucrative) sports show in Canadian history, Hockey Night in Canada. As set out in Stursberg’s take-no-prisoners memoir of his stormy six-year stint at the corporation, The Tower of Babble: Sins, Secrets and Successes Inside the CBC, that meant negotiating with NHL commissioner Gary Bettman.

In April 2006, CBC president Robert Rabinovitch and I flew to New York to have dinner with the NHL commissioner. Bettman is a small, intense, extremely clever businessman, so disliked in Canada that he was lampooned in one of the country’s most successful films, Bon Cop, Bad Cop, where he appears as a malevolent midget named Harry Buttman. We first met him at Nobu, an overpriced sushi restaurant in New York. Bettman was with Bill Daly, the deputy commissioner of the NHL. They were sitting in the middle of the loud room, stargazing. As we sat down, Bettman pointed out Sugar Ray Leonard, the world champion boxer, and Barry Diller, the media mogul. Last week, he assured us, Bruce Willis had been there, along with some other people whose names elude me now.

Bill Daly is the physical opposite of Bettman. He is large and completely bald. He looks like a menacing professional wrestler. His background is in competition law. Like Bettman, he likes to negotiate, indeed lives to negotiate. When they are together alone, I assume they spend their time practising their negotiating skills. Who will pick up lunch? Who will go first into the elevator? Who will be meaner to the public broadcaster? Daly is often described in the press as the kinder and gentler of the two.

That evening we laid out our concerns about being excluded from bidding and proposed that we pursue an accelerated timetable to a new contract. “Hmm,” Bettman replied noncommittally. “Hmm,” he said again, his voice almost lost in the cacophony of the celebrity crowd. Bill Daly passed us more sushi. He stared at me balefully. Sugar Ray Leonard wandered by, shadow boxing, throwing little lefts and rights into the expensive restaurant air.

“Hmmm,” Bettman said once more. He ordered the cheque, smiled menacingly and promised to get back to us.

So what is a contract with the league for Hockey Night in Canada worth? How much should we offer? We knew that wherever we landed, the contract would be the largest in Canadian history. This was no surprise, since the contract would cover the most valuable games for the most valuable sport on the most valuable sports show in the country.

At the same time, we needed to maintain many of the contractual arrangements we already had. For example, the current contract focused on the Canadian teams. The reason for this was simple: Canadians overwhelmingly prefer Canadian teams. No matter how many Canadians are playing on the Phoenix Coyotes, nobody in Canada cares about them. And no matter how few Canadians are playing on the Montreal Canadiens, they are still followed with obsessive interest. The Toronto Maple Leafs are something else again; regardless of their dismal performance over the last 40 years, they attract bigger Canadian television audiences than any other team. The challenge going into the discussions with Bettman, then, was to preserve as much as possible both the conditions and the price of the old contract.

Weeks drifted by. The league dithered. Meanwhile the CBC sports department was becoming restive.

As spring gave way to summer, nothing much happened. Finally, in July, I called Bettman and said we would make him an offer to get the ball rolling. “I am happy to receive an offer,” Bettman said. He always appears happy, no matter what is going on. “But,” he continued, “you understand that I would like to continue to sniff around.”

“Sniff around?”

“Sure. Just to see what else might be out there, besides you.”

“I understand,” I said.

I hung up with visions of Bettman and Ivan Fecan, the CEO of CTV, enthusiastically sniffing each other. We were preoccupied at this point with whether CTV would bid. It seemed implausible. CTV usually reserved Saturday nights for the Canadian shows they were obligated to provide as a condition of their licence, and they reserved the more lucrative weekday nights for their bread-and-butter American programs.

Nevertheless, we were still worried. It was not just that Fecan had happily overpaid for the Olympics, but he had recently begun buying more U.S. programs than he could ever schedule, to keep them out of the hands of his rivals at Global. It was an enormously expensive strategy but it demonstrated the lengths he would go to achieve national domination. The prospect of Bettman and Fecan not just sniffing each other but actually consummating something was too awful to contemplate.

On July 19, in Montreal, we presented Bettman and Daly with a formal offer. Less than two weeks later, we met again in New York. This time Bettman tabled his revenue model, which had been prepared by an outside group of consultants. The numbers looked absurd to us. They were another world from what we were actually achieving. Bettman, however, seemed quite happy with them.

“So,” he asked, “now that you see how well you should be doing, how much more can you put on the table?”

“These numbers are crazy,” I said. “Your projections are way too aggressive.”

“Maybe you just have a lousy sales force,” he countered.

“We have a good sales force. They have been selling Hockey Night in Canada since the dawn of history. They know the market better than anyone.”

“Our consultants say you are priced too low,” Gary went on. He smiled cheerfully.

At last we agreed that his man, Steven Hatze-Petros, would meet with our head of sales, David Scapillati, to see whether there was a common ground. And in fact they did agree. By the end of the month they had produced a common revenue number, which was much closer to our own.

The next day, I called Bettman. He was his usual sunny self.

“Now,” I said, “since we have agreed on the revenues, we should be able to close.”

“Nope,” he replied.

“Nope?”

“There is no agreement on the revenue number,” he said.

“That can’t be! Scapillati told me that he and Hatze-Petros had agreed.”

“Well, I didn’t.”

In hopes of breaking the log jam, we went back to New York in early September. There was, however, little movement. We argued for about 2½ hours, until we ran out of things to say. Then we shook hands and parted. We were tens of millions of dollars apart. For the first time, I began to think we might not be able to conclude a deal.

It appeared that I would end up presiding over a disaster. Having already lost the Olympic bid, the CFL and curling, I would now lose Hockey Night in Canada, 75 iconic years of the greatest sportscasters and the greatest games. The ghosts of Howie Meeker, Foster Hewitt and Danny Gallivan frowned upon me. The living presence of Don Cherry scowled.

And of course the loss of Hockey Night in Canada meant we could fall into an even bigger catastrophe. We did not have the money to make up those hundreds of hours of Canadian programming, unless we showed endless repeats of The Fifth Estate and Rick Mercer Report. Our viewers would scream with boredom and abandon us in droves. Our share would plunge from its already enfeebled levels. It would be the greatest calamity in CBC’s history, and I would be blamed.

We determined to make one last push. I would meet Bettman in Truro, N.S., on Sept. 25 for the Hockeyville festivities. Hockeyville is a program sponsored by Kraft, where little towns all over Canada apply to be named “Hockeyville,” the Canadian town that most loves and celebrates hockey. Each competing town explains why it should be chosen, and a national vote is held. The winner has its rink rebuilt, and two NHL teams play an exhibition game there. The winner was Salmon River, N.S., a community so small that the celebrations had to be held in Truro. Everyone showed up. Don Cherry arrived on an antique fire engine. The Ottawa Senators and Montreal Canadiens came for the game. The premier of Nova Scotia, much of his cabinet and the local mayors appeared. It was clearly the largest event in the history of Truro.

Tents had been erected outside the rink. The tables in the tents were covered in food; it felt like a church fundraiser. There were sliced meats and coleslaw, three-bean salads and chips, lashings of soda pop, strangely dried-out hamburgers and weird, multicoloured aspics. I found Bettman cautiously examining an implausible food object. He was his usual cheerful self, although he looked a little odd in his immaculate suit and tie, with everyone else wearing jeans and plaids.

We repaired to his car and sat down together. I sketched out a proposal that was a little richer than our previous one, but which was raked, so that CBC’s payments would increase in later years. We felt this was manageable because inflation would assist us, and although we would never admit it to Gary, our advertising rates were underpriced. He wrote down the numbers I proposed for each of the years of the new contract. He used a very expensive pen.

“It sounds good,” he said. “I think we are in the right ballpark. I will take it to my board.”

A wave of relief flooded over me. Finally it appeared that we would conclude the deal successfully at a reasonable price. A chunk of concrete moved out of my stomach. We got out of the car and shook hands. Gary smiled his endlessly happy smile. We walked back to the tent. The three-bean salad looked delicious. The sliced meats and coleslaw tasted remarkably good.

Two months later, David Masse, the new head of CBC sports, and I went to meet Bettman and Daly at Rao’s, a restaurant in East Harlem. Bettman told us in advance that Rao’s had a reputation as a favourite restaurant of some mobsters. He noted with what seemed a strangely misplaced enthusiasm that someone had been killed there three years ago. Even so, the conversation began auspiciously enough, with Bettman saying the league was fine with the financial terms. But—there was always a “but” with Bettman—they needed more concessions, giving TSN more playoff games and two more Leafs games. It was like an endless trip to the dentist.

It seemed clear that if the league was prepared to close with TSN, then the threat of CTV bidding must not be there. “I guess that CTV’s not in the picture,” I mused.

Bettman smiled inscrutably. “Well, you never know,” he said, apparently implying that Ivan Fecan was somewhere in his back pocket and could be produced if necessary, like a bad rabbit from a malevolent hat.

“I never imagined they would consider it,” I went on, ignoring him. “They could never fit Hockey Night in Canada into their schedule.”

“As I say,” he continued, “you never know. But the best course is, of course, just to conclude.”

There it was. We should cough up the playoff concessions and two Leafs games, let him close with TSN and be happy. With Bettman one is afraid to have a drink. It’s wiser to stick to water. He is always negotiating. Often when he is just speculating or gossiping or asking after the weather report, he is really negotiating. It never stops.

After dinner we walked into the cold Harlem night. There were no taxis anywhere. Bettman noticed us looking around.

“No car?” he asked.

“No. How do we get a cab?”

“Oh, cabs never come up here. They’re afraid,” he replied.

“Can you give us a lift?”

“Sure. How about we make it three extra Maple Leaf games?”

We were now into the hardest part, since there was no agreement about time frames or the overall business case. We were down to saying no to each other until one side folded. It would be more poker than business. I liked Bettman’s hand better than ours.

The conversation with the NHL picked up again in early January 2007. Bettman reiterated the demands he’d made at Rao’s, and added new ones: more playoff games for TSN or more dollars from us. We said no. He said no. We were entering new territory, simply eyeballing each other, waiting for cracks to appear in the other side. It was turning into a contest of wills. Did we need them more than they needed us? Bettman ratcheted up the insouciance of his tone; his conversation became more confident and calmer. He affected a note of serenity, of Buddha-like calm. It was getting on my nerves.

January came and went. February dawned, with no movement. The NHL still wanted us to give up more playoff games and Leafs games. As well, they were stubborn on the digital rights for the Internet and wireless. February passed. Finally, on March 6, we had another long conversation with Daly and Bettman. We said no again on the playoffs, no again on the Leafs, no again on price increases, and we wanted all the digital rights. After three hours, they said yes. They dropped the remaining demands and we were done. A handshake deal was in place.

It was not as good a deal as the old one; in fact it was a very rich deal, but one that should—if everything worked out properly—make a small but important profit. We realized that there were dangers. We realized that unforeseen events might blow the economic underpinning out of the business case. If the economy collapsed, or the advertising markets went south, or the Leafs never made the playoffs, or the digital rights had no value, then we would face a loss. But the risks seemed remote—the economy was in the midst of a great boom, the Leafs could not lose forever, and the digital markets were growing faster than the economy as a whole. It seemed safe.

From the book The Tower of Babble: Sins, Secrets and Successes Inside the CBC, © 2012, by Richard Stursberg. Publishing April 21, 2012 by Douglas & McIntyre, an imprint of D&M Publishers Inc. Reprinted with permission of the publisher.




Browse

CBC vs. NHL goes into overtime

  1. “Oh, cabs never come up here. They’re afraid,” he replied.

    “Can you give us a lift?”

    “Sure. How about we make it three extra Maple Leaf games?”

    Talk about entering the den of the viper.  Bettman is a complete eel.  No wonder the owners renewed his contract worth millions.  He’s the best tool they have.

    • He`s very good at milking the existing markets for hockey.  Unfortunately, there is so much money in the NHL that starting a new team is almost prohibitively expensive.  The current owners are more interested in fighting for share of the existing pie than actually increasing NHL viewership beyond what it is now.  Otherwise we`d have two more teams in Canada & Winnipeg would have re-entered the NHL years earlier.

      • “Increasing NHL viewership beyond what it is now” would never be achieved with more Canadian teams. Hockey ratings are already sky-high in Canada. The solution is smart expansion/relocation in the US, and nudge the morose US-market viewership ratings.

  2. Bettman is great at what he is, and what he does.  If you don’t agree, you don’t understand the art of negotiation in business.

    • That is true. I do not understand the art of negotiation in business. I don’t really understand reptiles either.

  3. “everything has to run downhill toward us and then it works”-Buttman.
    This is an excellent article that tells me nothing  i wouldnt have guessed already. He is a man, although so secretive can not hide what he is

  4. The ghosts of Howie Meeker, Foster Hewitt and Danny Gallivan frowned upon me. The living presence of Don Cherry scowled.

    sorry.. Howie Meeker doesn’t have a ghost
    88 and still going strong

  5. turns out the leafs can lose forever

  6. Lol…..the leafs can’t lose forever…….man I hope not

  7. Seattle will buy up all the season tickets in a few weeks if the NHL would give us an dang expansion team! Vancouver’s been sold out for years and years, and Calif has more teams than it deserves. And TWO teams in Florida? Ya kidding?? Sheesh, the money is here, the 3rd new venue is fully funded for both NBA and NHL teams. We’re just waiting with cash in hand and a huge untapped market.

Your email address will not be published. Required fields are marked *