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TSN fights to stay on top with three new channels

TSN is planning on adding three new channels.

SHAUN BEST/REUTERS

The NBA and NHL playoffs might be heating up this week, but there's another battle brewing in Canada with much higher stakes than mere trophies and bragging rights: the attention of sports fans across the country.

Less than six months after Rogers Media Inc. threw down $5.2-billion to nab national NHL rights for its growing suite of Sportsnet channels, archrival Bell Media's TSN announced Tuesday that it is launching three new channels in the fall, bringing to five its own suite of 24-hour sports properties.

The move is a testament to a growing belief in the industry that, with an exploding array of TV options for viewers, large audiences can only dependably be earned by live events such as professional sports.

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"We think this is an important step in the evolution of TSN," TSN president Stewart Johnston said in an interview.

But it comes at a time that Canadian TV subscribers are beginning to balk at the higher costs that come with sports programming.

TSN, the most lucrative specialty channel in the country, has been under a microscope since Rogers' blockbuster move last November. Sportsnet executives have been tweaking Bell in public, boasting that the new hockey contract will help it become the No. 1 sports media brand in Canada.

While subscription numbers for the main Sportsnet service fell from 9.1 million in 2010 to just under 8.5 million in 2013, revenues grew 14 per cent over the same period, to $253.4-million, making it the second-highest-grossing specialty service in Canada behind TSN.

Last year, Rogers acquired The Score and rebranded it Sportsnet 360, bringing its package of Sportsnet channels to seven, including four regional feeds.

While TSN executives had been idly mulling an expansion for the past two years, Rogers' move pushed them to launch TSN3, TSN4, and TSN5 more quickly.

Still, the channel's president said the move was not born of weakness, but conceived as a way of airing the valuable content for which it already owns the rights. "Almost every weekend, we run into a situation where we've got more than two live events going on at the same time," Mr. Johnston said.

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Mr. Johnston noted, for example, that space limitations have prevented TSN from airing more than 15 to 20 games of the International Ice Hockey Federation World Hockey Championships every year. "There are 64 games out there, and we've just never been able to find room for the others."

He added that TSN owns the rights to about 1,000 hours a year of programming from U.S. channel ESPN, most of which it does not currently air. It also has the rights to all four Grand Slam tennis events. Currently, the channel will choose a superstar player – say, Rafael Nadal or Andy Murray – over lower-ranked ones, even hometown favourites such as Milos Raonic or Eugenie Bouchard. "Now you can see, especially in an early week of a Grand Slam, you'll have Bouchard on one feed, Raonic on another feed, Murray on another feed," Mr. Johnston explained.

The new channels will also carry different editions of TSN's flagship news show Sportscentre.

Still, the move carries risks for the entire industry, coming as it does when Canadian viewers are beginning to show signs of fatigue over rising prices. Last week, a report by the federal broadcast regulator noted that Canadian subscriptions to cable TV – which includes cable, satellite, and Internet-delivered services such as Bell Fibe – began to drop for the first time. So-called cord cutting has been widely noted in the United States, but the phenomenon had not yet been seen in Canada.

TSN is already the most lucrative specialty operation in Canada, earning $102.3-million in pretax profit on revenue of $400.4-million in 2013, according to data from the Canadian Radio-television and Telecommunications Commission. Those higher earnings came mostly from an increase in subscriber fees: In 2011, TSN earned approximately $147-million from cable or satellite subscriber fees; two years later, though the channel's subscriber count stayed steady at just over nine million, it earned more than $279-million in fees – a jump of almost 90 per cent.

TSN says it is in negotiations with all of the major cable carriers, and is hoping the extra channels will be available to all of its current subscribers at launch. Mr. Johnston said the extra channels would be offered for no extra fee; he declined to say how long those terms would last.

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About the Author
Senior Media Writer

Simon Houpt is the Globe and Mail's senior media writer, charged with covering the industry's transformation. He began his career with The Globe in 1999 as the paper's New York arts correspondent, covering the cultural life of that city through Canadian eyes. More

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