TSN and the Hockey Canada House of Cards

It finally happened this morning.  Hockey Canada CEO Scott Smith has left the organization and the entire Board of Directors has resigned.

We'll find out in the coming days what this means to this year's world juniors. TSN already has announced there could be major changes in the way it covers this year's event, which somehow hasn't turned into a major news story in Canada.

TSN Backtracks

If there’s a company that hopes Hockey Canada comes out of its crisis with a soft landing, it’s TSN.

The World Junior Hockey Championship is a big money-maker for TSN. Already hurting from low ratings and having to basically give away advertising for the world juniors event in August, it was looking forward to getting back on track with the traditional Christmas start to this year’s tournament in Halifax, NS and Moncton, NB.

Even though Hockey Canada was fumbling the ball when it met with government by then, it still looked like everything might be back to normal in just a few months. At least, TSN was hoping so. But it did say it would soon "confirm its broadcast plans" for the tournament this Christmas.

What?  Wait a minute. What do you mean “will confirm our broadcast plans”? Just a few weeks ago everything was confirmed – you would be showing every game.

What changed?

Oh right, the sponsors bailed on Hockey Canada.

"Straight Cash Homie"

Tim Hortons led the hit parade off last week, followed by TELUS and Canadian Tire and then Nike finally announced it was out too. I found Nike’s departure interesting because it was the one big sponsor that didn’t bail on Tiger Woods. Different situations though and much different times. No two crisis events are the same.

Sponsorship brings in over 40% of Hockey Canada’s total revenue. Houston, we have a problem.

When these “corporate partners” (I love that term. It sounds much bigger than sponsors) bailed on Hockey Canada, they effectively bailed on TSN too.

TSN sells advertising to the big Hockey Canada sponsors, which is an indirect way of helping Hockey Canada. The more TSN can get from advertising revenue, the more Hockey Canada can get for television rights.

This is why TSN was again planning to show every game of the tournament. If you’re wondering who would watch a Wednesday afternoon game between Latvia and Switzerland, that’s not really the question. If TSN can make money by selling advertising, or tossing games like that into packages that include games with Team Canada, then everyone’s happy. It really doesn’t matter how many people watch a game like that, as long as there are big ratings for the Canada games, because that’s what drives advertising.

The traditional big sponsors of Hockey Canada have bailed and they won’t be buying advertising on TSN because that would be seen as supporting a corrupt organization. I’m sure TSN is now scrambling for advertisers to fill the gap, but who wants to touch a Hockey Canada product these days?

That’s why TSN is suddenly saying it will confirm its broadcast plans later. It wants to see what happens with Hockey Canada, what the mood of the country is and mainly, how much advertising it can sell.

The mass resignations today from Hockey Canada produces some good news for TSN, which wants this over as quickly as possible..

There’s no question right now much of the television coverage of the world juniors is in trouble. I’m surprised the media hasn’t jumped all over the TSN story. We are talking about a potential major disruption to a holiday tradition in Canada because of the Hockey Canada scandal that had gas poured on the fire last week.

A Crisis Comms Disaster

TSN has been in a real tough spot on the Hockey Canada story for months. I give TSN credit for allowing its reporter Rick Westhead to break bad news stories about Hockey Canada. The Globe and Mail and a few others have done some great reporting too, but the reality is every time TSN runs a negative story about Hockey Canada, it’s hurting the product it’s trying to sell at Christmas.

Of course, Hockey Canada might not be in this situation if it hadn’t handled the crisis as poorly as it has.

People, including Prime Minister Trudeau, have said Hockey Canada doesn’t seem to understand that what it did was wrong, and Hockey Canada doesn’t look at its situation the same as most Canadians.

That’s not true. This isn’t a perception problem on Hockey Canada’s part. It knows damn well what it did was wrong. Trust me on that. It’s been doing everything it can to try to prevent all the many, many skeletons in its closest from becoming public. The problem is, it’s handled the crisis so badly, that’s what eventually will happen.

It hired the big communications firm Navigator to help it handle the crisis. I don’t know what Navigator advised Hockey Canada, or if its leaders refused to take the advice. Whatever the case, the walls are closing in and it’s just a matter of time before everyone is shown the door and the careers of many people take a major hit.

If they would have asked me how to handle it months ago I would have told them to come clean, senior leaders should resign and they might be able to keep some of the skeletons in the closet. Not now though.

The other thing I would have told the Hockey Canada people was to be apologetic and humble and not make stupid statements. That’s exactly what its now former Interim Board Chair Andrea Skinner did last week. She wondered aloud “Will the lights stay on in the rink?” if her and a bunch of suits at Hockey Canada lost their jobs. She wasn’t sure they would.

That one’s right up with former BP CEO Tony Hayward’s “I’d like my life back” when BP couldn’t cap the Deepwater Horizon well in 2010. Both resigned not long after those comments.

When people put together case studies on how not to handle a crisis in 20 years from now, Chapter One will be about Hockey Canada.