Canadians watching “The Big Game” last night on U.S. network television were able to see the much-anticipated commercials from the American broadcast feed. But, that outcome was not guaranteed, nor is it a certainty for future years.
On January 24, 2018, Justice Brown of the Supreme Court of Canada dismissed, in part, a motion by Bell Canada Enterprises (“BCE”) and the National Football League (“NFL”). The motion was an attempt to stay an order of the Canadian Radio-television and Telecommunications Commission (“CRTC”) prohibiting a process known as simultaneous substitution (“sim-sub”) of commercials during the Super Bowl. Sim-sub occurs when television service providers replace the signal from one channel with the signal of another during the broadcast of the same event. For example, when American sporting events are broadcast in Canada, the American advertisements are usually replaced with Canadian commercials as the feed comes north. The CRTC generally allows sim-sub to protect the rights of broadcasters, to promote Canadian broadcasting and content creation and to keep advertising dollars within the Canadian market.
Super Bowl LI (2017)
Even though sim-sub is usually quite innocuous, the practice resulted in a great deal of dissatisfaction in recent years by Canadians who felt they were missing out on one of the game’s true highlights. Budgets for commercials have escalated well into the millions, celebrity cameos and outrageous plots are frequent, and the advertisements are often the subject of more water-cooler talk than the game.
After a period of consultation, the CRTC issued an order prohibiting sim-sub during the broadcast of the Super Bowl (Broadcasting Regulatory Policy CRTC 2016-334 and Broadcasting Order CRTC 2016-335, the “Order”). Although the Order was issued in 2016, it first applied to Super Bowl LI in 2017, prohibiting sim-sub from kick-off to the final play (but not during pre- or post-game shows).
2018 and Beyond
Despite the popularity of this decision with viewers, BCE, the current Canadian holder of Super Bowl broadcast rights, complained that the Order has reduced its audience by almost 40 percent and resulted in as much as $11 million in lost advertising revenue. BCE and the NFL were granted leave to appeal the Order before the Federal Court of Appeal, but in December 2017, the appeal was denied. The Court ultimately showed deference to the CRTC to “decide how best to balance competing policy objectives related to broadcasting in Canada.” The subsequent refusal of a stay on the CRTC Order by the Supreme Court meant that Canadians, for the second year, could see the U.S. commercials as sim-sub continued to be prohibited.
It may be third and long, but the outcome has yet to be decided. Even though Justice Brown refused to grant BCE and the NFL a stay of the CRTC Order, he did agree to expedite the appeal process. This should increase the chance of obtaining some certainty on the issue prior to the next Super Bowl in 2019.