Sports now make up 50% of top 10 grossing channels: CRTC

Sportsnet One and TVA Sports are, for the first time, in the top 10 highest-grossing TV channels, according to the CRTC’s latest stats on Canadian programming—and of those top 10, five are sports channels. The commission released its 2015 financial results for specialty, pay, pay-per-view (PPV) and video-on-demand (VOD) television services on Thursday. Among the highlights of the report are the performances of Rogers Communications Inc.’s Sportsnet One and Quebecor Inc.’s TVA Sports, two of the sports channels in the top 10 whose numbers rose dramatically year-over-year. The CRTC credits the spike to the acquisition by Rogers of exclusive NHL broadcasting rights in Canada for 12 years, with sub-licensing agreements made with TVA Sports and CBC/Radio-Canada. Rogers previously credited a revenue boost to the NHL contract. “It’s a big driver of revenue because the fees on those (sports) channels are higher,” Gord Hendren, president of Charlton Strategic Research, said in a phone interview. “They are some of the most profitable specialty channels.” Sportsnet was second on the list of highest grossing channels with about $360 million in revenue, up 15.5 per cent from last year, and a pre-tax profit of $53.8 million. But Sportsnet One stood on its own in the top 10, with roughly $86 million in revenue, a 10.2 per cent increase from a year earlier, and a profit of $36 million. Sportsnet One’s national advertising revenue increased to approximately $5.3 million in 2015 from $3 million in 2014, following a loss in 2013. The channel also increased its subscribers by about 600,000 to 6.7 million from 2014. TVA Sports stood in eighth place behind Sportsnet One. It “saw a revenue increase of $65.2 million (almost 400 per cent) compared to 2014, which is mostly attributable to its broadcast of NHL programming,” the report read. Its total revenues were $81.8 per cent, compared to $16.6 million a year earlier. However, the acquisition costs of NHL programming were $85.4 million, which resulted loss of $39.2 million. Its subscribers increased by about 320,000 to 1,995,904 million in 2015. There was speculation that providers would be reeling because all six Canadian NHL teams missed the playoffs this year. And while hockey makes up a large component of the sports broadcasting market in Canada, Hendren said the success of other Canadian sports teams, like the Raptors this year and the Blue Jays last year, are still “highly relevant.” “It remains vitally important … because it is a driver of loyalty for many,” Hendren said of sports channels. “And it’s the only content that’s preferred live. It creates a reason to subscribe to paid TV, and you could argue that paid TV still controls the majority of sports in terms of access to it. Nothing has changed in that regard.” Sports channels grabbed half the top 10 spots on the highest grossing list, with BCE Inc.’s The Sports Network (TSN) nabbing the top spot with revenue of $442.8 million, which was a two per cent decrease from a year earlier, and a profit of $99.9 million. Bell-owned Le Réseau des Sports (RDS) capped off the sports channels at a third in revenue with $162 million (though that was down 8.5 per cent) and a profit of $19.9 million. Sportsnet and TSN have been jockeying for position as Canada’s number-one destination sports channel in Canada. The Movie Network and Discovery Channel, both also owned by BCE, ranked fourth and fifth, respectively, with the former hitting revenues of $120 million and the latter $97 million. Rounding-out the list is CBC News Network ($87 million) and Corus Entertainment Inc.-owned Movie Central ($81 million) and W Network ($79 million). For the rest of the specialty services market, the pace of growth slowed “as total revenues increased by 0.5 per cent, or $19 million, to $4.3 billion,” according to the report. It noted advertising revenue saw a $19-million decline, which was “offset by a $30.6-million increase in subscription revenues.” Specialty services also invested $1.5 billion — of which $409.9 went to independent Canadian producers — in the “creation of new television programs produced by Canadians, reflecting an increase of 7.5 per cent compared to $1.4 billion invested” the year prior. Of the 228 services measured in 2015, the top 10 accounted for 37.7 per cent of total revenues generated in 2015 (out of $4.25 billion), according to the report. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Sports now make up 50% of top 10 grossing channels: CRTC

Broadcast | June 23, 2016

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