Rogers to leverage the Score for advertising, Pelley says

Rogers Communications Inc. will leverage the Score Television Network to deliver more sports programming on multiple platforms and seeks to sell advertising geared to younger Canadian sports viewers, said Keith Pelley, president of Rogers Media. In a release Saturday morning, Rogers said it reached a $167 million agreement to purchase Score Media Inc., gaining control of the Score specialty channel and its “related television assets.” The deal does not include the Score’s digital media assets such as its website and popular mobile applications but will grant Rogers “access to Score Media's digital technology to immediately enhance its mobile offerings,” the release said. Score Media's digital assets will be spun off as a separate company owned by its existing shareholders and with Rogers taking a 10 per cent equity interest. Pelley said in a phone interview that the acquisition “fits squarely” into Rogers’ strategy of delivering sports content on multiple platforms, which he said is one of the company’s “key pillars.” He said Rogers is not yet certain of its plans for the channel. The Score joins Sportsnet, Sportsnet One and Sportsnet World in Rogers' stable of sports channels and will ultimately be rebranded under the Sportsnet name, he said. “It’s early days, so we don’t have definitive plans, but what I can tell you is that theScore has built a very strong, niche programming service with a younger demographic,” Pelley said, adding that almost 70 per cent of the channel’s viewers are under 50 years old. “This is obviously appealing to advertisers and was one of the reason this deal was attractive to us.” Pelley said the Score’s “Fighting Series” mixed-martial arts and WWE professional wrestling are well received by younger Canadian viewers. He said the Score’s character has helped keep viewers coming back for years. “Their edgy style and opinionated way of delivering sports news has been something that’s synonymous with the Score and has been a part of their success,” he said. As a Category A specialty channel, the Score is a “must offer” channel ensuring it has a wide base of potential viewers, another aspect that appeals to advertisers, Pelley said. The channel had 6.6 million subscribers at the end of the 2011 broadcast year, a 2 per cent fall from 6.8 million a year earlier, according to CRTC data released in May. Brian Schecter, a media analyst and president of consulting firm Puddle Duck Productions, said in a phone interview that the Score was up for sale “for quite some time” prior to the acquisition and that the deal must gain the approval of Rogers and Score Media shareholders, as well as the CRTC. Schecter said the station gathered a following in the late 1990s and early 2000s as it was seen as a “poster child” for independent media companies and a successful sports-themed station that went head to head with larger rivals Sportsnet (owned by Rogers) and TSN (owned by BCE Inc.). He said the Score’s efforts to compete with larger broadcasters by taking on premium content like professional baseball games hurt the broadcaster over the past decade as the cost of sports programming rose. “They got into trouble when they started trying to do things that they weren’t capable of doing, either financially or from a rights point of view,” Schecter said. “A couple years ago they acquired the rights to Major League Baseball and they actually paid $12 million to get out of that deal. They couldn’t make a go of it.” Score Media said it had a net loss of $177,000 for the two-year period ending May 31, 2012. The company reported $1.3 million in losses in the second quarter of 2012 due to investments in sales and products, followed by a $1.6 million loss in its third quarter ending May 31. In its third-quarter 2012 financial statement, the company said its quarterly revenues fell slightly during the 2012 broadcast year, which began Aug. 31, 2011, following the company’s best year in 2011, in which it pulled in $43.6 million in revenues. The Score’s mobile applications continue to gain speed after the company launched its first U.S.-based sales office in New York last year. In its third-quarter financial statement, Score Media said its mobile applications averaged 3.5 million unique users per month over the three-month period ending May 31, representing a 46 per cent rise over the same period a year earlier. Pelley said Rogers will use the access to Score Media’s digital technology to “expedite and significantly improve” Sportsnet’s mobile offerings. He said new Sportsnet apps will become a priority as soon as the deal is finalized and that they will be tied into the company’s digital advertising network, which covers Rogers' websites and apps. Pelley said Rogers’ resources will help the Score “deliver an even stronger service to consumers” and declined to say whether Rogers will put new or different sports programming on the channel. Rogers owns the Toronto Blue Jays and last week completed a partnership deal, with Bell, to secure half ownership of a 75 per cent stake in MLSE, the parent company of the NHL’s Toronto Maple Leafs, the AHL’s Toronto Marlies, the NBA’s Toronto Raptors, and Major League Soccer’s Toronto FC. That deal also gave Rogers a joint-controlling stake in MLSE’s specialty channels, Leafs TV, NBA TV and Gol TV. Rogers is also partner in a consortium ad network for real-time digital ad buying called the Canadian Premium Audience Exchange, which was announced this month. Pelley said Rogers has not yet had “large strategic discussions” about how the Score will fit with its other broadcast assets because few people within the company knew about the intended acquisition until last Friday. Schecter said Rogers could migrate some of its existing content from the Sportsnet channels to theScore, such as television broadcasts of on-air personalities aired on Rogers’ sports radio stations. He said Rogers could also use the Score in conjunction with its other channels to offer more coverage of events and tournaments such as the FIFA World Cup or Olympics. This month, Rogers said it will partner with CBC/Radio-Canada to broadcast the 2014 FIFA World Cup in Brazil. Pelley said premium Olympics or World Cup coverage fills the “kind of the role that Sportsnet and Sportsnet One play … does have live events, there’s no question, but it’s predominantly a news and information service.” Schecter said the acquisition is a good move for the company because it eliminates a competitor and offers the company another platform to cross-promote sports teams, telecommunications services, and other products. In a research note released Monday, UBS Securities analyst Phillip Huang said the deal “is consistent with management’s focus to enhance its media portfolio with sports content.” He said that, given “the size of the deal, we do not expect any significant stock reaction for Rogers.” nkyonka@thewirereport.ca

Rogers to leverage the Score for advertising, Pelley says

Broadcast | August 27, 2012

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Rogers to leverage the Score for advertising, Pelley says

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