Thursday, August 2, 2012

Rogers Media and the Boo Jays

Blue Jays and Rogers Media: a connection you can't ignore

Many years ago, media companies began merging into oligarchies. In the United States, for example, General Electric bought NBC. AOL became AOL Time Warner. MicroSoft teamed up with NBC to form MSNBC. Viacom, who owned CBS, bought Paramount, which owned Canada's Wonderland, and for a while, you would watch commercials for Viacom properties while you waited 45 minutes to get on the Bat. Alas, I digress.

Rogers Communications inc. started in the early 1960s as a radio company based in Toronto, starting with CHFI (98.1 FM) and CFTR (680 News). By the late 60s, they expanded to television, and in the early 80s they expanded to Wireless (remember Cantel?).

Then, in the 90s, Rogers bought MacLean-Hunter, and finally, in 2000, they bought the Toronto Blue Jays.

The Blue Jays haven't made the playoffs in the past 11 years.

Today, Rogers has really three divisions that are all tightly related: a wireless division (we all know Rogers Wireless and Fido), a cable division, and finally Rogers Media. Based on last year's results, Rogers Wireless is extremely profitable, with 3 billion in operating profits on 7.1 billion dollars of revenue based on 9.3 million subsctibers. Those of you who say your wireless bill is too expensive are right. The problem is that Bell and Telus won't lower their prices either (the oligarchy). Rogers Cable is pretty profitable too, with 1.6 billion of profit on 3.8 billion in revenue (of course, the competitors won't compete in Canada either) based on 3.75 million subscribers. And finally, there is the Media area, which has just 180 million dollars of operating profit on 1.6 billion dollars in revenue,

What is Rogers Media?

Well, they own and operate CityTV and OMNI (which is why you see commercials for CityTV while watching the Jays). They own 9 specialty channels (including SportsNet) and own pieces of four other TV stations. Television produces 41% of operating revenue in 2011. The Shopping Channel produces 16% of operating revenue as well.

They also produce 54 consumer, trade and professional publications including of course Chatelaine and MacLeans. Publications produced 17% of operating revenue in 2011.

And there's radio with 50+ radio stations across the country, including the beloved Fan590 and the rest of the Fan Radio network, but also 680 news in Toronto.

And finally, there is a division called Sports Entertainment, which are the Blue Jays and Rogers Centre which produced the final 10% of operating revenue.

So as a whole, the Blue Jays and Rogers Centre had about 160 million dollars of revenue of the total of 14.5 billion dollars of revenue, a little bit over 1% of the entire Rogers empire.

One point of all of this is that the Blue Jays operate as part of the great whole of Rogers, and the goal of Rogers, and therefore the Blue Jays, are to be profitable. The Jays are not going to operate at a loss. In fact, they are probably expected to have a profit margin similar to other divisions at Rogers Media. That precludes management from spending big bucks like the Yankees and Red Sox. In fact, the only other corporations that owns an MLB club is Nintendo's majority ownership of the Seattle Mariners and Lerner Enterprises' ownership of the Nationals. What this means is that the people responsible for the pursestrings of the Jays are not really connected to the Jays. The Jays report to Rogers Media. Rogers Media reports to Rogers Communications, and the Jays are really a small part (1%) of the entire picture.

The other point of this is the synergy that exists uniquely within the Blue Jays. The Jays broadcast on the Fan Radio network and on SportsNet exclusively, both Rogers properties. Opinions on the Jays are broadcast primarily on Jays owned media outlets. This stifles the independent voices of the club. Radio analyst Mike Wilner was censored for a weekend for criticizing Cito Gaston. For all other clubs, radio rights are given to a radio network who are free to make comments without fear of censure. The same is true for television rights with the exceptions of YES (Yankees). As a result, the Jays broadcasters are encouraged, whether directly or indirectly, to stay on message, and if they aren't, there is always the suspicion that they are. The Blue Jays radio network and SportsNet will prop up the Jays, as a positive outlook gets more customers, and more customers mean more advertising revenue for Rogers Media, which is the company's mission. Once again, the goal of the Toronto Blue Jays is not to win a World Series. It is to be profitable. Shi Davidi, Mike Wilner, and Scott Carson are paid shills of Rogers, as are the Blue Jays themselves. They're all part of the same club, with the same goal.

For myself, that means that I take everything that comes out of, the Fan 590, or Sportsnet TV with a very critical eye.

Once you realize that the goal of the Blue Jays are to win profitably and that most of the opinions that you hear on radio and TV are just part of the Rogers empire messages, you might understand the workings of the Jays more. Alex Anthopoulos won't buy big talent because it isn't profitable in the short term to do so. The Jays will always sound better than they actually are because the television and radio outlets prop them up.

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