SIMMONS: Rogers dropping NHL rights makes Ohtani deal possible for Blue Jays

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The wildly expensive pursuit of Shohei Ohtani is corporately planned by Rogers to coincide with the end of its 12-year, money-hemorrhaging deal with the National Hockey League.

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One negotiation may not be happening necessarily without the other expiring, veterans in the television business industry tell the Toronto Sun.

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Rogers is seeking to turn itself from the hockey network — which has been an enormous drain on the company’s economics — into a Blue Jays first network that would include a team challenging for the World Series, centred around the brilliance of Ohtani, with Rogers Sportsnet, the network, reducing costs and increasing revenue all at the same time.

The $5.2 billion NHL deal, which will cost Rogers in the $500 million a year range for each of the next two hockey seasons — a deal that escalated hugely over its final years — will expire at the end of the 2026 hockey season.

The Ohtani contract, if signed here, would be in the $500 to $600 million range U.S. over what’s likely to be a 10-year period. In other words, Rogers, owners of the Blue Jays, would be paying Ohtani at most but not much more than $60 million a season — depending on the bonus structure — while no longer paying the NHL some $500 million a season to be the exclusive rights holder in Canada.

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Under this plan, Sportsnet would retain its regional NHL rights which it has long-term deals on. It would continue to cover half of the Maple Leafs broadcasts and all of those regional games including the Edmonton Oilers, Vancouver Canucks and Calgary Flames.

Whether Rogers enters any future bidding on NHL national rights is a matter still to be determined, but what’s become clear is they will not go in with a large over-the-top offer the way they shocked the hockey world 10 years ago.

And have been losing large ever since.

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Centring the business around Ohtani is wise in more than one way for Rogers. No one will admit to just how much money Rogers has lost with its large NHL reach, but the figures are astronomical. The Ohtani look, coming at the same time that the Rogers Centre has been renovated at a price of $300 million, may seem overly expensive on the outside, but on the inside it’s rather quaint when compared with the dollars relinquished on hockey.

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What centring the network on the Blue Jays does for Rogers Sportsnet would bring down their overall costs involved with broadcasting baseball while no longer having to deal with the gigantic losses that have come with the over-estimates of what bringing NHL hockey to the network would reap. Rogers owns the rights to broadcast Blue Jays baseball, which means Rogers is ostensibly paying itself for that ability. That’s good for the company, bad for the team.

The Blue Jays are already a national brand in Canada. But with Ohtani signed, the brand would not just grow nationally but internationally as well. The ratings, undoubtedly, would grow substantially assuming Ohtani can hit and eventually pitch the way he has in the past with the Los Angeles Angels. From a club perspective, the ability to sell premium seating should increase with Ohtani — there is no proof of that yet — but what would definitely increase are sponsorship money that could come in from all over the world, but primarily from Japan.

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At the same time, as ratings increased, so would the advertising fees aligned with Blue Jays games on television. A 162-game season, with some post-season, with some exhibition season, could provide Rogers with more than 500 hours of televised sport from March to October. And that doesn’t include pre-game or post-game shows or any other programming related to Blue Jays baseball. That might mean a softer schedule from October to March but absolutely owning the market for half of the calendar year.

The first two years of the Ohtani deal, from a corporate point of view, would seem overly expensive because of the $1 billion that would need to be paid to the NHL for the final two seasons of the contract.

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But from years 3-10 — assuming the Ohtani deal goes that long — that would mean eight seasons of baseball without exclusive rights to hockey in Canada, which should be more than profitable without much risk at all for the giant corporation.

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Just what happens to the NHL rights in Canada is a matter of conjecture now. The large corporate structures, Rogers owning Sportsnet, Bell owning TSN, both as awkward partners as majority owners of Maple Leaf Sports and Entertainment Ltd., have not shown what the future brings next.

TSN was absolutely stunned when it lost out on the national package of NHL games. That was 10 years ago. What the network and the company has learned since is that it has done better economically without the rights than it would have done with them. And Rogers so overpaid that if it could get out of the deal today, it would run to do so.

You can’t make a deal as large as the Ohtani pursuit without cooperation of ownership. And ownership is aboard, while regularly silent on Blue Jays matters, and is waving hello to Ohtani while at the same time waving goodbye to the NHL.

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