WHILE THAT LOGIC HAS BEEN applied to real estate, sports networks are using it when it comes to insulating themselves from ever-increasing rights fees.
Buoyed by the success it has achieved since the late Ted Rogers bought the Toronto Blue Jays basically as programming for Sportsnet back in 2000 (not to mention as part of the huge “Rogers” branding exercise as wireless phones took off), the media company is looking at owning even more sports properties – and in a deeper fashion.
It began last year when Sportsnet got wind that that the Grand Slam of Curling might be coming on the market and decided to buy it from Insight Sports. Sportsnet now owns and operates the prestigious World Curling Tour series, which features many of the best curling teams on the planet.
It's been a success in its first year, exceeding expectations on ratings, says the company. “It's actually been a bit of a surprise on how popular it's been," says Scott Moore, Rogers president of broadcasting. “We've hit the (older) demographic and a bit more of the younger demographic than we would have thought… It's good for us and for the game in general."
It's also been good for CBC, which entered into a 10-year deal with Sportsnet to air some of the event's playoffs. That deal helped mitigate some of Rogers' risks and provided a potentially larger audience, and got the public broadcaster back into a sport it lost to TSN years earlier.
While Rogers' six-figure investment looks like a good one, that's only part of the attraction. It also provides Rogers with cost certainty and complete control.
So instead of negotiating rights fees every few years or striking profit-sharing deals, Sportsnet can attend to running its part of the curling business, from the event management to all broadcasting, digital and new media rights – and all the advertising around it.
It's the same thinking that went behind the $1.3 billion decision by Rogers and Bell to buy a the bulk of Maple Leaf Sports and Entertainment.
Rogers Media president Keith Pelley sees this as the way of the future. “We're in a unique position because we actually own a baseball team," he said in a recent interview, prior to the announcement of the company’s new NHL deal. “That provides us with 162 days of compelling content that generates large audiences. That's a real advantage we have, combined with the ownership of MLSE and long-term deals with Canucks, Oilers and Flames, there's not a lot that would keep us up at night worrying about strong content for the next number of years.
“We don't have the same worry that other broadcasters do,” he added, a comment that carries even further heft with the NHL deal now in the full light of day.
Pelley believes that other networks will also see the advantages in owning properties like curling.
“I wouldn't be surprised if you see some other properties, not your major leagues, but secondary leagues, purchased by broadcasters.” – Keith Pelley
“The most important thing is that we can grow it and we can sell it from more than just your traditional ad spots, but all facets, such as sponsorship,” says Pelley, adding that Sportsnet is already offering curling online in Europe. “I wouldn't be surprised if you see some other properties, not your major leagues, but secondary leagues, purchased by broadcasters.”
Sportsnet didn't invent this idea. In fact, two decades ago, the Blue Jays were owned by Labatt, which also owned TSN. The relationship helped put TSN on the map when it was still a fledgling sports property and only ended when Labatt sold off TSN in 1995.
But that was in sports television's Jurassic period. Today, Sportsnet believes owning properties can protect the channel from the numerous digital threats out there, both known and still to come. “The long-term deals and ownership of a team, insulate us from things like AppleTV or GoogleTV or Netflix,” Pelley says. “I think we're in the best shape of any of the sports broadcasters because of that.”
“If we lost everything else and we had 162 Blue Jays games and moved the WCT to 12 events, we're still pretty solid."
Ed. Note: This story is the fourth in our ongoing series on sports television in Canada and what it means to the industry. Our first installments can be read here.
Watch Cartt.ca next week for what the independent distributors think about all these sports rights, the rising fees and what it means for their customers. After that, we’ll have some numbers on what sports fans and other viewers are up to – then what the regulatory implications could be.
Let us know if you want to contribute to this series. Click here. We’ll keep it confidential if you wish.
