BCE, Rogers Stand to Lose from NHL Lockout

by Jordan Richardson on September 28, 2012

As nearly every Canadian offers an opinion on where the blame lies in the current National Hockey League lockout, it pays to remember that some are affected more than others as this fiasco drags out. From entry level staff working at facilities to those whose income relies on the game, countless people will experience fiscal impact as long as the NHL lockout carries on and on.

BCE Inc. and Rogers Communications are also expected to feel the pinch, although I’m sure most will be hard-pressed to feel sorry for the two telecommunications giants.

As most know, the two companies recently picked up Maple Leaf Sports & Entertainment Ltd. to the tune of $1.32 billion. In owning the Toronto Maple Leafs franchise, BCE and Rogers find themselves owning the most profitable team in the NHL. Despite not winning many games, the Leafs continue to pull big revenue. The club made $193 million in revenue last year, posting an operating profit of $82 million – double its closest competitor, the New York Rangers.

With the lockout potentially eroding an entire season of play, that means BCE and Rogers can see profits like the aforementioned vanish.

“If all teams were like the Leafs, making stinking amounts of money, we wouldn’t have this problem, so certainly Rogers’ and BCE’s pain is greater than those owners whose teams are marginal,” said Iain Grant, president of the SeaBoard Group.

The season is still scheduled to start on October 11, with more negotiations set to take place Friday to deal with some of the non-economic issues of the game. The plan appears to be to solve the surrounding issues so that the main issue’s eventual solution, whatever that may be, will enable the NHL to get back to business as quickly as possible. That may not sound overly encouraging, but it’s far ahead of where the owners and players were at this time in 2004 when an entire season was lost.

If this does end up as a repeat of 2004-2005, BCE and Rogers will see lost ticket, merchandising and advertising numbers and that will sting. Experts say that the two companies could lose between $25 million and $50 million a quarter – each. The “good news” for the two companies is that the reduction in operating costs could help cushion the fall, but only for so long.

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Written by: Jordan Richardson. www.digitcom.ca. Follow TheTelecomBlog.com by: RSSTwitterFacebook, or YouTube.

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