GATINEAU – With the deregulation of the mainstream sports and national news taking effect as of September 1st, the entire industry knew to brace itself for what TSN was about to ask for.
Having owned genre protection for two decades, TSN also owned a CRTC regulated rate of $1.07 per subscriber per month as long as a distributor kept the channel in its basic package.
But with genre protection going away (thanks to 2008-100), so is that rate. While the country’s most popular specialty channel won’t, of course, say what rate they are asking for from Canadian distributors (we’ve heard rumours in the $4-$5 per customer range), Bell Media president Kevin Crull acknowledged Tuesday that it’s going to be a leap.
“TSN rates have been frozen under a regulatory regime for nearly 20 years,” he noted in a brief interview on the matter after his appearance in front of the CRTC during the hearing into vertical integration.
“During that time, the programming rights have gone up exponentially, (and) I see programming rights for sports doubling every four to five years – every time we renew our contracts,” Crull added.
“We have 100% more viewers than the next closest sports service in Canada, yet it is priced lower than that service,” he continued. So, the company did consumer surveys and “looked at revenue distributors are getting from the way they package TSN, at comparable services both in Canada and south of the border – and we established a fair market price.”
ESPN (a part-owner of TSN) gets between $4 and $5 per subscriber per month from U.S. distributors, as this 2009 chart shows (the rate has certainly gone up since then).
“We’ve been negotiating with distributors across Canada and deals are getting done. It is absolutely a price increase,” he said, “When you hold a service flat for 20 years and costs go up like they have, naturally there’s going to be a price increase on the service.”
When we asked specifically about the pricing rumour, Crull wouldn’t confirm it but noted it can’t be bitten off in one chunk. “We’re actually easing distributors into the market value. I would tell you the market value of the service today is the price we’re seeking in four or five years.
“In many cases, (distributors) said ‘we understand the market value, it’s much, much higher, but don’t make us go to that immediately in 2011, ease us into it’ and that’s what we’ve done.”
– Greg O’Brien
