Quebec market can’t support four sports specialty stations, experts say

The Quebec broadcasting market could soon go from one sports channel to four following Rogers Communications Inc.'s application for a French-language sports station, but experts say they don’t expect all of the channels to succeed. “I'm not sure there's room for as many stations, but at the same time you don't want to be left behind. It's a pre-emptive strike. Everyone is applying to make sure that if they want to launch, ,” Michel Poitevin, an expert in sports economics at the Université de Montréal, said in an interview. On March 16, the CRTC opened a consultation on an application by Rogers to launch Sports d'intérêt général de Rogers, a French-language sports channel. In its application, Rogers wrote that the station will be dedicated generally to the world of sports, with special focus on general interest Canadian professional sports. If launched, the channel will be in direct competition with BCE Inc.'s Réseau des sports (RDS). BCE spokeswoman Jacqueline Michelis said in a phone interview that RDS is the leading French sports channel. “RDS is in the lead, and it's not just number one in sports, but it's number one for French language specialty of any kind,” she said. Michelis would not say how a new channel may affect the market. In 2009, RDS had just less than three million subscribers, a number that reflected a 25 per cent increase since 2005. Its revenues were $106 million in 2009, a 55 per cent increase since 2005. Despite's RDS' success, its numbers reflect a smaller French-language market. In the English-language market, BCE's TSN had just under 12 million subscribers in 2009 and revenues of $221 million, while Rogers' SportsNet had 8.8 million subscribers and $186 million in revenues. But Rogers was not the first company to apply for a French-language sports channel, indicating a market that may be expanding. In February 2010, the CRTC approved an application by Quebecor Media Inc.'s TVA Group to operate specialty station TVA Sports. But potential flagship content for the channel has not been apparent. The company unsuccessfully requested the right to play Montreal Canadiens hockey games as part of its application. But the CRTC denied the request, noting that RDS had already entered into a contract to pay about $20 million a year for exclusive French-language television rights to the hockey games until the end of 2012-2013. Quebecor has expressed an interest in owning its own hockey team in Quebec City, and recently announced that it won the naming rights to a new stadium in the city with the intention of bringing back the Quebec Nordiques. CBC/Radio-Canada is also throwing its hat in the sports ring. In February, the CRTC approved an application by the CBC for a licence to operate Radio-Canada Sports, a French-language sports specialty service with a focus on Canadian mainstream professional sports, as well as under-represented and amateur Canadian sports. “We're in a phase where everyone sees there's an opportunity, but maybe in five or 10 years, not everyone is still going to be there," Poitevin said. The flurry of applications comes after a 2008 CRTC broadcasting policy that opened the sports specialty channel market to competition. “The Commission has examined the current environment and determines that it would be appropriate to immediately introduce competition between Canadian services operating in the genres of mainstream sports and mainstream national news,” the commission wrote in the decsision. “The services operating in these genres—The Sports Network (TSN), Sportsnet, Le Réseau des sports (RDS), CBC Newsworld, Newsnet, Le Réseau de l'information (RDI) and Le Canal Nouvelles (LCN)—are strong, healthy, highly popular, and highly competitive.” But Poitevin said there does not appear to be room in the French-language market for four specialty sports stations. He said the stations may suffer from a lack of content, noting that, without hockey games, RDS would not be as popular. “If in two years it's Rogers that gets the Canadiens’ rights, then I'm not sure RDS would remain as popular,” he said. Poitevin said that if Rogers launches its station, it would be more likely to survive than the others, having access to content and capital. He said a trend in the past few years has seen broadcasters trying to find successful niches in the specialty television market. “At the moment, there aren't many specialty sports stations in Canada ... It's a market that is beginning to be lucrative, and Rogers doesn't want to be left behind,” he said. Poitevin said obtaining sports content has a lot to do with negotiating for a good piece of the rights pie, and being the last to launch a station could leave the company with crumbs. He added that a more competitive sports channel market could also drive up the price for sports broadcasting rights. Richard Paradis, president of consulting firm Groupe CIC and an instructor at the Université de Montréal's communications department, said in an interview that he views Rogers' application as a defensive move following Quebecor’s and Radio-Canada’s applications for stations. “One of the reasons why everyone is trying to get a French-language sports network is because RDS is making unbelievable profits ... because they're the ones who have the rights to the Canadiens games in the Quebec market,” he said. “When the Canadiens are in the finals, RDS ... can be up to 11 or 12 per cent market share. It's almost as high as the CBC, and more than Canal V.” Paradis said Rogers may have applied for the channel to back up negotiating purposes because he believes the market can't support more than two sports stations. “It's impossible. There's no room in the Quebec market in French for even two sports channels. We're not going to get three or four,” he said. “It's going to be a tough battle because it's one of the most expensive areas to be involved in, and you can't have too many people trying to split the market.” Paradis said the new stations, to be successful, would have to obtain rights to very popular content and differentiate themselves from one another. Poitevin said Rogers would have an advantage given that it has rights to content from three professional sports teams: the Toronto Blue Jays, the Maple Leafs and the Toronto FC soccer club. But Paradis noted that content from Toronto is unlikely to appeal to the French-language market in Quebec. He said hockey, tennis and soccer are the most popular sports in the province. Quebecor declined to comment, and Rogers said its only comments are in its CRTC application. kfournier@thewirereport.ca

Quebec market can’t support four sports specialty stations, experts say

Broadcast | April 7, 2011

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