Sports channels profit from NHL lockout

WILLIAM HOUSTON, Truth & Rumours, Globe and Mail

(April 28, 2006) – CANADA’S leading sports channels are raking in plenty of money these days. And a major reason for the big dollars in 2005 was, paradoxically, the cancellation of the National Hockey League season.

Figures released yesterday by the Canadian Radio-television and Telecommunications Commission show TSN leading all sports channels with a 2005 profit of $72.1-million before income tax. That’s a record for TSN and more than double its profit of $35.4-million in 2004.

Why the big jump? TSN’s bottom line grew because expenses in 2005 dropped by a whopping total of $45-million.

And expenses plummeted because TSN wasn’t required to pay NHL rights fees for the cancelled 2004-05 NHL season.

The broadcasters’ 2005 fiscal year ran from September of 2004 to August of 2005.

Ranking second to TSN among the sports channels was its French-language arm, Réseau des Sports, which had a profit before income tax of $21.9-million, up from $11.7-million in 2004.

Unencumbered by Montreal Canadiens TV rights, RDS’s expenses in 2005 dropped to $45.1-million from $68.6 million in 2004.

The absence of NHL rights fees also produced a big year for Rogers Sportsnet, which showed a profit before tax of $31.6-million, an enormous increase from $9.9-million in 2004.

The Score Television Network, Canada’s third-ranked English-language sports service, continued to show growth. It reported profit before tax of $3.8-million, up from $1.9-million in 2004 and way up from a loss of $900,000 in 2003.

But the news is less encouraging for the digital sports channels launched in 2001.

Helped by the absence of NHL rights fees, NHL Network had a profit before tax of $185,895.

However, the rest of the sports digitals continued to bleed red ink.

ESPN Classic Canada lost $491,000, but appears to be moving in the right direction. In 2004, it lost $1.2-million.

Fox Sports World Canada, which airs soccer and some rugby, was in the red by $1.6-million, not good, but an improvement from $2.5-million in 2004.

Still, with GOLTV, a soccer channel, entering the market a few months ago, analysts are wondering whether Canada is large enough to support two channels devoted almost entirely to soccer.

Xtreme Sports appears to be heading down the hill instead of up. It reported a loss of $819,978, almost double its loss of $478,072 in 2004.

And at Maple Leaf Sports and Entertainment, there may be questions asked about the viability of Raptors NBA TV. It lost $1.96-million in 2005, up from its $1.8-million loss in 2004, but not as much as the $2.4-million in 2003.

MLSE’s other digital channel, the regional Leafs TV, is a good news, bad news story. It lost $3.4-million in 2005, but that’s down from $4.1-million in 2004 and $5-million in 2003. The good news: During the past season, Leafs TV’s subscription base almost doubled, to about 200,000 from 100,000, because it aired 13 Maple Leafs regular-season games.

The telecasts averaged only 65,000 viewers a game, a small audience compared with the 500,000-plus that TSN pulls in for a Leafs telecast.

But an audience of 65,000 in the digital world is big, the largest that any sports digital service produced over the past year.

Finally, The Racing Network lost $1.16-million, which is slightly less than the $1.59-million dropped in 2004. TRN also functions as a promotional arm for the Woodbine Entertainment Group.

World Cup content

Rogers Communications has signed a rights deal to provide World Cup highlights of each game on its mobile telephone service Rogers Wireless. Highlights also will be available on high-speed Internet (Rogers Yahoo! and Hi-Speed Internet).

Live World Cup telecasts will be aired on Sportsnet and TSN, as well CTV for the final. But Rogers also will provide live coverage on its OMNI Television channel in five languages — Mandarin, Cantonese, Portuguese, Spanish and Italian.

whouston@globeandmail.com

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