Monday, July 13, 2015

Rick Brace New CEO of Rogers Communications

Chris Powell July 08, 2015

When he departed Bell Media at the end of 2013, seemingly closing the book on a nearly 40-year career in media, Rick Brace admitted he was apprehensive about being bored when he was no longer responsible for the day-to-day operations of a major media company.

“When you go from running flat out to stopping, there’s a real fear that it’s too quick a transition and that you’re going to be bored,” said Brace at the time.

Just 18 months later, it appears his misgivings were well founded. On Tuesday, Rogers Communications announced that Brace would be the next president of its $1.8 billion media unit, succeeding his former protégé Keith Pelley – who is leaving the company at the end of summer to take a role with the European Tour golf circuit.

Brace was not available for interviews, but said in a release that leading Rogers Media is “an opportunity I just couldn’t pass up.” His appointment is effective Aug. 10.

The veteran media executive cited the company’s collection of assets, the Rogers 3.0 strategy championed by Rogers Communications CEO Guy Laurence, and the “digital disruption” occurring within media as the primary reasons for abruptly stepping out of retirement.

Industry experts said Brace’s considerable sports pedigree, which includes several years as president of the sports specialty channel TSN, represents a “doubling down” on sports for Rogers, which in June wrapped up the first year of its 12-year NHL rights deal.

Solutions Research Group president Kaan Yigit said Brace’s hire is a clear signal to stakeholders that Rogers “means business” in sports, particularly after what he characterized as an inauspicious debut for hockey across its various properties.

“I see the NHL contract as priority number one, as well as other sports properties,” said Yigit. “It’s absolutely essential to deliver more on the NHL front, as this season delivered below expectations in terms of audience and growth.”

Yigit also said Brace’s hire could mean future deals to support the company’s steadfast commitment to sports.

“I would not be surprised if there weren’t other deals to support this direction in the next 18 months,” he said. “And someone like Mr. Brace knows the market, the players and every stakeholder intimately.”

Bob Stellick, president of Toronto sports marketing firm Stellick Marketing Communications, said NHL ratings and revenue could prove a “bit of a challenge” for Rogers in the near future, but said Brace is a “seasoned” sports media executive, adept at extracting value from existing properties.

Brace has 35 years of media experience, much of it spent within sports broadcasting. He helped found the sports specialty channel TSN, and served as its president from 1998 to 2000.

Stellick said Brace is a stark contrast to Pelley.

“Keith’s a high-energy type of guy, whereas Rick is more of a steady-hand-on-the-tiller kind of individual,” said Stellick. “That’s more of what [Rogers] needs now: Someone to digest the properties they’ve purchased and turn them into profitable entities.”

He said Brace could make a material difference in the Rogers Media culture, describing Pelley as “visionary” and “a deal-maker” and Brace as a person capable of leveraging full value from those deals. “He’s the guy who takes what someone else has purchased and develops it into the property they need it to be,” said Stellick.

The immediate priority for Brace, Stellick speculated, would be rationalizing Rogers’ $5.2 billion investment in hockey, particularly as media consumption continues to migrate online.

Rogers, which owns Marketing, reported an operating loss of $32 million on $464 million in revenue for the first quarter ended March 31. In its analysis, the company said higher programming and production costs of approximately $120 million – stemming from an increased number of NHL games – contributed to an anticipated operating loss for hockey of $14 million in the quarter.

Stellick said Rogers always faced a daunting task in making further inroads with hockey, because Canadian broadcasters have excelled at bringing the sport to audiences for decades. He said the idea that Sportsnet could recreate it was aggressive.

Rogers will release its second-quarter results later this month, but in the most recent quarterly report company officials said they expect hockey’s seasonal loss to be offset by the higher-value playoff season, during which it generates greater ad revenue while producing fewer games.

Veronica Holmes, president, digital for ZenithOptimedia in Toronto, said Brace is joining Rogers at a key juncture. “Rogers Media has an impressive set of assets and is positioned to grow its audiences across broadcast, print and digital,” said Holmes. “There’s still a big job to do monetizing all their properties and managing revenue as audiences shift to digital.”

Amusement Park Profit Margin

Amusement parks and arcades

The amusement parks and arcades industry recorded operating revenue of $465.3 million in 2013. The industry had operating expenses of $438.7 million, which resulted in an operating profit margin of 5.7%.

Salaries, wages, commissions and benefits were $150.5 million and accounted for 34.3% of all operating expenses. The next most significant operating expenses were cost of goods sold (13.3%) and amortization and depreciation (10.1%).

Other amusement and recreation industries

Operating revenue for the other amusement and recreation industries was $8.1 billion in 2013. The industry had operating expenses of $7.7 billion, which resulted in an operating profit margin of 4.9%.

Salaries, wages, commissions and benefits were $2.8 billion and accounted for 36.3% of all operating expenses. Other operating expenses included cost of goods sold (10.1%) and rental and leasing (8.6%).

Within this industry group, the fitness and recreational sports centres industry contributed the most to operating revenue in 2013 with $2.7 billion. The industry had operating expenses of $2.5 billion, which resulted in an operating profit margin of 6.5%. Salaries, wages, commissions and benefits were just over $1 billion, accounting for 40.0% of its operating expenses.

Cool summer weather in Eastern Canada had an effect on the golf industry. Operating revenue was marginally higher than the operating expenses of $2.5 billion, resulting in a 1.1% operating profit margin. Salaries, wages, commissions and benefits were $992.5 million, accounting for 39.6% of its operating expenses.

Skiing facilities had operating revenue of $786.3 million. The industry had operating expenses of $763.3 million, which resulted in an operating profit margin of 2.9%. Salaries, wages, commissions and benefits were $287.4 million, accounting for 37.6% of its operating expenses.

The "all other amusement and recreation industries," which is composed of marinas, bowling alleys, recreational sports teams, observation towers and all other related activities, generated operating revenue of $2.1 billion and operating expenses of $1.9 billion, which resulted in a operating profit margin of 8.3%. Salaries, wages, commissions and benefits were $501.0 million, accounting for 26.3% of its operating expenses.