Sports broadcasting can bring in niche fans with possibly lower revenues:experts

Pedestrians walk past the Maple Leaf Sports + Entertainment office in Toronto Sunday, March 13, 2011. THE CANADIAN PRESS/Darren Calabrese

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Pedestrians walk past the Maple Leaf Sports + Entertainment office in Toronto Sunday, March 13, 2011. THE CANADIAN PRESS/Darren Calabrese

MONTREAL – Maple Leaf Sports and Entertainment could use its major league sports teams like the Toronto Maple Leafs to start up a regional sports channel and deliver hardcore sports fans to advertisers, industry observers said Monday.

“This would be niche television,” said business professor Bruno Delorme, who teaches at Montreal’s Marianopolis college. “It delivers less affluence but a more targeted spectator.”

Published reports that MLSE is planning a sports channel to broadcast Leafs games as well as NBA and major league soccer games could give it an entry into the competitive sports broadcasting market.

If such a network could deliver enough hardcore fans, that might be enough to attract sponsors, he said. There’s also the opportunity to sell merchandise and memorabilia associated with the teams, Delorme added.

“The thing with niche is that you have less spectators but you have a more interested and motivated audience because those that will turn to niche television know what they’re getting.”

The Ontario Teachers’ Pension Plan has announced it’s keeping its roughly 80 per cent stake in MLSE, which owns the Leafs as well as the the Air Canada Centre, NBA’s Raptors and the MLS’s Toronto FC.

Reports suggest that with the sports and entertainment company off the market, the company will turn its attention to broadcasting.

MLSE already owns several speciality channels including Leafs TV, NBA TV and GOL TV, a sports channel entirely dedicated to soccer.

It would be a “protectionist measure” to control content, Delorme added.

Sports broadcasting is already highly competitive with major players TSN and French-language counterpart RDS owned by BCE (TSX:BCE) and Sportsnet owned by Rogers Communications Inc. (TSX:RCI.B). This fall, Quebecor Inc. (TSX:QBR.B) launched TVA Sports specialty channel.

However, the federal broadcaster has laid down rules for sharing content.

The CRTC has blocked companies from offering television programs exclusively to their mobile or Internet subscribers in new rules for cable and telecom operators that also own TV networks. It has ruled any program broadcast on television, including hockey games and other live events, must be made available to competitors under fair and reasonable terms.

However, the CRTC will allow companies to offer exclusive programming to their Internet or mobile customers if it is produced specifically for the Internet or a mobile device. This includes supplementary programming such as behind-the-scenes video clips of a television program, as well as original content.

Norm O’Reilly, a business professor at the University of Ottawa who has studied sports teams, said there’s not necessarily more money for sports teams to make when they own a sports network.

“It tends to be better a better business model when you’re actually collecting revenues than when you’re running it yourself,” he said, who has studied regional sports networks in the United States.

He noted the teams such as the Leafs already have partners in CBC, Sportsnet and TSN.

“It’s a pretty lucrative model right now in regional television. I wouldn’t see them wanting to change it, if I were them,” he said of MLSE.

Sports consultant Ed Desser, who has worked as a consultant to MLSE, said new business models for sports programming are coming because fans want to watch a live event on the device of their choosing.

Desser wouldn’t say if he’s helping MLSE set up their own sports network.

“I am not really at liberty to discuss the work I have done or might do on behalf of Maple Leaf Sports,” said Desser of Desser Sports Media in Santa Monica, Calif.

A former NBA executive, Desser helped Time Warner Inc. plan a regional sports network in Los Angeles around the Lakers’ basketball team.

“Major league teams are amongst the most attractive and most valuable properties in the cable industry,” Desser said.

“While there are significant issues that have to be addressed with starting any new network, a combination of strong sports properties is a prerequisite.”

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