SBD/June 28, 2011/Media

Owners Of TSN, Rogers Sportsnet Seek To Obtain Larger Subscription Fees From Cariers

The owners of TSN and Rogers Sportsnet are “flexing their muscles and demanding more pay for their play” regarding subscription rates, according to Susan Krashinsky of the GLOBE & MAIL. New TSN Owner BCE Inc. is “negotiating new deals with cable and satellite carriers that include higher monthly fees for subscribers.” The company is “taking advantage of the new freedom given by the federal broadcast regulator to negotiate subscriber fees,” and Rogers Communications “could do the same.” Though the "freedom comes into effect this September," negotiations are "starting already, and they will be a test of how that power is used and the importance of sports programming to TV distributors." TSN is the "most profitable specialty network in Canada, a title it reclaimed in 2010 after a dip in profits in 2009," and Rogers Sportsnet "was second." But the channels "stand to become even more profitable if they can follow the path of ESPN, the No. 1 sports network in the U.S., and ratchet up monthly subscriber fees substantially." Bell Media President Kevin Crull last week predicted that the fees TSN pays to broadcast sports events "could double every four to five years." Krashinsky writes the "dominance of the two biggest Canadian sports networks took a prominent place last week" at the Canadian Radio-television & Telecommunications Commission's hearing on "'vertical integration' -- the trend toward cable and satellite companies owning the television channels they distribute." Non-integrated competitors such as Cogeco Cable are "complaining that the integrated firms have every reason to abuse their market power." BCE "has not threatened to pull any channels from Cogeco's service yet," but Cogeco "remains concerned that integrated competitors such as BCE have an incentive to hike prices" (GLOBE & MAIL, 6/28).
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