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Bell Media, CBC abandon Olympics partnership

Tags: BCE, Bell Media

Unable to put a value on coming Olympic Games, the Canadian Broadcasting Corp. and Bell Media have walked away from their partnership rather than put together a new bid for exclusive Canadian television rights.

The broadcasters have been locked in negotiations for more than a year with the International Olympic Committee for the 2014 Sochi and 2016 Rio de Janeiro Olympics. The breakup raises the possibility that no domestic broadcaster will be willing to meet the financial terms demanded by the IOC.

While the Games have traditionally been ratings hits for Canadian broadcasters, they are expensive to secure and produce. Despite the success of the Vancouver 2010 Games, for example, the domestic broadcast consortium of Bell Media and Rogers Media lost money.

The loss prompted Rogers to withdraw from any further bids.

"This is a very high level of brinksmanship we're seeing," said Gord Hendren, a president at Charlton Strategic Research Inc., a market research group that has worked with the IOC in the past. "I can't imagine we won't see a broadcaster step forward at the right price at some point."

The partnership submitted two bids that were rejected by the IOC, including a first pitch of $70 million and a second one that was believed to be marginally higher. That was less than half of what the Canadian networks bid for the rights to the 2010 Vancouver and 2012 London Games.

But without the guarantee of NHL involvement in the Russian Games and time-zone complications, it's difficult for the broadcasters to gauge domestic interest. The NHL expects to make a decision on the Games some time this summer, when it begins to renegotiate its collective agreement with its players.

"If they are getting signals that the NHL is taking a pass on Sochi, then it's probably not worth it at any price," Hendren said. "There's a big game going on here, and that timing is clearly an issue."

There's another NHL wrinkle: The CBC, Bell Media and Rogers are all interested in bidding when the rights to Hockey Night in Canada come up for renewal in two years. Every penny spent on an Olympic bid is a penny not in the coffers when it comes time to outbid the rival broadcasters for a marquee Canadian sports property that could generate years of profits for the winning bidder.

While CBC said Monday it was willing to explore new partnerships, Bell Media said it was unequivocally out of the bidding. That mirrors the position taken by Rogers Media earlier this year, which said "financial priorities suggest that it's best for us not to be involved."

Rogers reiterated that position Monday, leaving CBC as the only Canadian broadcaster still standing that has expressed an interest in bidding.

There are other options, both for the IOC and the CBC. The IOC has struck innovative deals in other countries in which marketing companies and Internet service providers secure the rights, then sublicense them to television broadcasters on a piecemeal basis.

Earlier this year, The Globe and Mail reported that Yahoo Inc. was also interested in bidding for the Canadian rights.

Still, director of CBC sports properties Jeffrey Orridge said the broadcaster feels the Olympics are an essential part of its mandate to bring Canadian stories to Canadians as he left the door open for alternative partnerships.

"Showcasing homegrown athletes as they take on the world? That's critically important for us," Orridge said. "What we do is we help promote dreams, aspirations, inspirational stories. That's the framework in which we're operating in which we evaluate sports opportunities."

BNN is a division of Bell Media, which is full owned by BCE. 

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