This Is Anything But Victory

I've never been an executive for a television or streaming company, but making one's offerings available to as many people as possible without charging exorbitant fees seems like a good place to start. Of course, those offerings would also need to be entertaining to keep people coming back, but that would be the challenge in filling a television lineup on a day-to-day basis. Sports networks seem less demanding as they seem to broadcast old games, talk shows, radio shows, highlight shows, and anything else they can before sports are played live in the evening. Apparently, though, that's not the case as Victory+ has officially closed its doors for broadcasts.

For those that aren't aware, Victory+ was an American streaming service owned by Calgary-based A Parent Media Company. It officially launched in September 2024, ahead of the 2024–25 NHL season, with the Dallas Stars as its first partner. From there, they'd add the Anaheim Ducks to their roster and select St. Louis Blues games before branching out to broadcast MLB's Texas Rangers, the NWSL, Major Arena Soccer League, and the Western Hockey League in Canada.

It seems like they had enough options to keep people watching, but their announcement today has thrown a number of teams' broadcasting schedules into disarray. The Dallas Stars announced on Monday that they were moving their broadcasts to Amazon Prime which made things look bleak for Victory+, and this comes on the heels of the Ducks telling Victory+ in June that they were dissolving their agreement after Victory+ missed payments to its partners.

Again, I fail to understand how that was possible when Victory+ was supposed to be making money off advertising. A net negative cashflow would have been evident as they added more and more teams to their roster, so why would they allow that negative revenue stream to grow and continue? I'm baffled by the lack of simple accounting knowledge shown here by people with business degrees.

These upstart streaming services are proving to suffer from the same problem that a lot of other broadcasting businesses are showing, and that problem is that the sports they're broadcasting simply don't bring in the promised return that people forecast. With Rogers Communications bleeding money and selling off national rights to anyone who shows mild interest and, now, with Victory+ disappearing as quickly as Bally Sports did, the NHL is running out of places where their product will be seen. With both cable and streaming subscriptions down in US households, justifying the cost of overpaying for hockey will be impossible. That should worry everyone.

It's hard to understand how the NHL can justify its outrageous broadcasting fees when a single rating point represents exactly 1% of the total target population in a specific geographic market. If the NHL boasts about having "the most-watched on record in the U.S." last season "with an average of 1.8 million viewers," they're not being seen by a lot of people. A network calculates its potential advertising income by using two calculations: Cost Per Point (CPP) that looks at the cost for each rating point, and Estimated Ad Rate which takes the CPP and multiplies it by the ratings scores delivered by Nielsen.

For example, if Rogers charges $2000 for a 30-second spot during hockey broadcasts, Rogers would be looking for a massive audience to help drive their advertising revenue up. Game One of last year's Stanley Cup Final drew 1.3 million viewers, that's not a huge chunk of Canada watching Vegas and Carolina. For calculations sake, though, let's say that it's 5% of Canada that watched, and that means that Rogers can charge $10,000 for a 30-second spot on its broadcast.

If Rogers shows 25 different commericals on its broadcasts, they make $250,000 per broadcast. Knowing that they broadcast "more than 500 national NHL games per season," let's grab the midpoint and say it's 550 games per year. That means that they only make $137,500,000 in advertising revenue per year, falling massively short of the nearly-billion dollars it needs to cover the NHL's broadcast fees alone. Add in all the staffing, travel, and other costs that come with having hockey on TV, and you're well over a billion dollars of revenue needed to cover Rogers' costs annually. That's a lot of red ink.

At the end of the day, Rogers will not make money on this deal despite being the sole Canadian broadcaster with NHL rights, and their new twevle-year agreement with the NHL doesn't start until October. With Victory+ having much smaller access to games, their advertising revenue stream wouldn't come close to covering their costs either. And with the NHL entering the picture for four teams, I'd expect that one will see very few advertisers signing on to have their ads on this new service outside of oline gambling sites and NHL-produced advertisements. If Victory+ couldn't get the ratings with their roster of teams, the NHL certainly won't achieve them either.

Expect your cable bills, subscription fees, and ticket prices for Toronto pro sports teams to continue to climb as Rogers looks to curb the flow of red ink, but it's too late for anyone on a Victory+ subscription. That money is likely gone with creditors now needing to be paid, and Victory+ will now just be another footnote in the NHL's broadcasting history. And until the NHL realizes that it doesn't have the pull that the NFL or NBA does on television in the US market, more and more broadcasters will lose money until they go broke.

Now you know why the NHL is expanding into Houston and Atlanta, and not Quebec City and Hartford. Those two television markets will artificially boost the NHL's numbers again so they can continue to try and force the spreadsheet arrows upward rather than moving into hockey markets where the passion for the game is real. Of course, they may already be priced out of Quebec City and Hartford with the outrageous ticket prices that fans are foced to pay, so it almost points to the NHL's financial model being broken entirely.

Until next time, keep your sticks on the ice!