WE’VE ALL HEARD THE conventional wisdom which says live sports is one of the last remaining mass audience attractions for linear TV – and that it will help retain a large chunk Canadian households opting for a subscription TV service.
Indeed, according to a new report from Winnipeg’s Communications Management Inc., TV companies and some streamers believe this in their bones, as evidenced by massive increases in spending on sports rights the past few years.
In fact, with the myriad ways sports is delivered, “the many emerging options for the delivery of video programming to consumers has also increased demand, with streaming services joining in the bidding for a number of events,” reads the report, “and, because streaming technology can be used by anyone, it has added to the potential for teams and leagues themselves to compete with traditional broadcasters in offering live games to consumers.”
Will streamers soon take the lead? There is surely much evidence of an ongoing shift. For example, this weekend’s Women’s Tennis Association win by up-and-coming Canadian Bianca Andreescu was shown not on TSN or Sportsnet, but on foreign streamer DAZN – which made its stream of the final match available via Twitter. DAZN has also, as readers will recall, purchased the rights to some NFL properties as well as Champions League and English Premier League soccer away from TSN and Sportsnet.
The real game changer for the sports rights market in Canada, however, was the 12-year, $5.2 billion deal Rogers signed with the NHL, winning the national hockey rights package away from the CBC from the 2014-15 season through to 2025-26, says the report called Betting on the Games.
Spending on sports has risen dramatically in Canada (and not just by Rogers on hockey). In 2007, Canadian conventional and specialty TV channels spent $385.1 million on rights to air sports programming, says the report. In 2017, that number has ballooned by 178% to $1.072 billion. (The report is a combination of sources, from CRTC data, Statistics Canada and CMI’s own digging.)
At the same time, spending on news programming from 2007 to 2017 rose 19.4% to $708.6 million and spending on all other types of shows rose 10.6% to $2.12 billion. News spending used to dwarf spending on sports.
The CMI report also blows the whistle on the CBC for a lack of transparency when it comes to the costs of sports to the public broadcaster and also estimates declines in overall ad revenue earned by Rogers’ Hockey Night In Canada when airing on CBC.
Given the TV industry’s faith in sports to continue to drive audiences and revenue, there are some potentially frightening stormclouds in the not too distant horizon.
What if, for example, sports takes up a position as a loss leader for the likes of global giant Amazon, which might simply be happy to lose a lot of money as a major sports streamer (it has done some experimenting with Thursday Night Football) since it earns revenue in so many other ways.
What if ongoing technical advances coupled with the revenue growth needs of teams and leagues mean they keep those rights in house, sell their own ads and subscriptions and disintermediate broadcasters altogether?
“When we consider… also the timelines for a number of the current major sports broadcasting/streaming rights contracts, it appears that the mid-2020s could emerge as a time of major change in how sports programming is delivered electronically, and by whom,” says the paper.
“We are in the tenth decade of the first century of sports broadcasting, which started in the early 1920s. Is it possible that the first decade of the second century of sports broadcasting – the 2020s – might come to be known as the decade of the ‘great recalibration’ of sports and media?”
