With sports broadcasting rights fees rising through the roof and new networks launching all over the dial, many cable and satellite TV subscribers are paying more and more to be able to watch sports content, and that's true across North America. However, just how much they're paying may be drastically different in Canada and the United States. Cartt.ca (a Canadian TV industry site) ran an interesting piece on the rising price of sports channels in Canada April 2, and that piece ruffled some feathers, producing an even more notable response from Bell Media (CTV, TSN and more) president Kevin Crull. Crull doesn't really dispute the claims about rising fees for TSN (and competitor Sportsnet), but he argues that these are extremely reasonable in comparison to what Americans pay for sports channels—and he has a point. From Crull's letter to Cartt:
"Our wholesale rates are confidential. However, I can tell you the leading sports channel in the United States charges wholesale rates that are more than double that of TSN, and that’s without the flexible packaging that we offer. Adding together the wholesale prices of TSN and Sportsnet, along with TSN2 and Sportsnet One, results in an overall cost well under $5. For this price, Canadians have access to all mainstream sports. For most major markets in the U.S., to get all mainstream sports, on a local and national level, the wholesale cost is estimated to be between $12 and $15. In L.A. and New York, it’s estimated to be approaching $20. The wholesale cost of sports in Canada, at under $5, is a bargain. I know I pay a lot more for gasoline, books, milk, eggs, cars, and everything else in Canada than I did when I lived in the U.S. We should appropriately acknowledge the value delivered to Canadian consumers from cable in general and sports programming more specifically!"
What exactly are the numbers we're talking about here? Well, Crull refused to divulge his wholesale rates, but Cartt's earlier piece reported that TSN charges $2.21/subscriber/month if carried on basic, $3.04 on a tier, and Sportsnet charges a wholesale basic rate of $1.78. The costs for TSN2 and Sportsnet One (Sportsnet's alternate national channel) presumably would be pretty minimal if they can be included for an overall cost of under $5 monthly, as Crull claims. By contrast, WhatYouPayForSports.com reports that ESPN's cost alone is $5.06/subscriber/month, while ESPN2's is $0.67. Thus, by itself, ESPN is costing subscribers more per month than TSN, TSN2, Sportsnet and Sportsnet One. However, ESPN isn't the only factor Crull is including in that $12-15 cost of "all mainstream sports" in the U.S.
Where's that cost coming from? Well, some of it comes from other national networks like TNT and TBS (reported monthly wholesale rates of $1.21 and $0.59 per subscriber), but given the relatively low rates of most non-ESPN national networks on that list, it seems likely the primary jump that elevates the American cost is paying for regional networks (such as the various Fox Sports/Root Sports regionals, YES, MSG, NESN, Big Ten Network, Comcast/NBC regionals or the like). This is where Canada has an advantage. Blue Jays and Raptors games tend to be televised nationally on one of the TSN or Sportsnet channels, while all CFL games are televised on TSN.
The main Canadian regional networks are actually part of Sportsnet (rather than a true national network, main Sportsnet is actually four separate regional networks, but they share a lot of programming), so viewers in most cities can catch local MLS and NHL action on their Sportsnet regional (which is included in those basic fees mentioned above), and TSN carries some MLS and NHL action nationally as well. Some local NHL games may require subscribing to an additional channel (such as TSN's Jets package), but by and large, Canadians can get most local and games with just TSN, TSN2, Sportsnet and Sportsnet One. Given that an average RSN fee is likely $2-$3 monthly and that many areas require you to subscribe to multiple RSNs in order to catch all the local teams, it's easy to see how Crull is getting his numbers about a higher cost in the United States.
It's not just the regionals that make the difference, though. For example, ESPN and TSN have quite a bit of similar content (ESPN has a 20 percent stake in TSN), including the NFL (by far ESPN's most expensive property, clocking in at $11 per subscriber per year according to this calculator, despite them only broadcasting Monday Night Football and highlights), NBA games ($6/subscriber/year for ESPN) and more. Yet, TSN's $2.21 estimated wholesale fee per subscriber per month is less than half of ESPN's estimated $5.06/subscriber monthly. What makes the difference there?
One factor would appear to be just that U.S. leagues can get much more from networks for their national broadcast rights in the U.S. than they can in Canada. That obviously makes sense on a sheer-numbers level, given that the U.S. population (313 million as of July 2012, according to Google) is almost ten times Canada's (34 million as of June 2011), but it's interesting that it also seems to hold true on a per-subscriber level. A Canadian viewer wouldn't seem to be inherently worth less than an American one. What's probably going on there is that the American broadcast rights are the primary item, though; the Canadian ones are an afterthought. Also, there's much more competition in the U.S.; now Rogers has bought The Score's TV arm, Bell and Rogers are really the only players in the Canadian sports arena (which is somewhat concerning), with the CBC occasionally chiming in with Hockey Night In Canada, a few amateur sports broadcasts and the odd Olympics). Bidding wars here are mostly between those conglomerates, and they don't seem to go as high as they do in the United States.
Does this mean that Canadian consumers have it better on a sports front than American ones? Yes and no. By and large, Canadian consumers do appear to be paying much less for the basic sports cable channels, and it seems Canadians can get the four main sports cable channels here for the price of ESPN alone. With those plus the regular broadcast channels, Canadians can watch every major sport's playoffs and championship, and the setup in Canada also means that most Canadians get most of the benefits of regional sports networks without the added price.
There are notable holes in the Canadian TV sports landscape, though. One of the biggest is NCAA regular-season football and basketball, which doesn't have a huge Canadian audience, making it tough for the NCAA fans who do live in Canada. Many of the most important games shown on ESPN or ESPN2 either aren't shown at all in Canada or are only shown on particularly expensive sports packages from certain cable/satellite providers. It's not just NCAA action, either; Rogers' application to carry the MLB Network was only recently approved, NBC Sports Network and CBS Sports Network aren't available here and other new networks may or may not make it north of the border. In general, it looks like Canadians pay far less for sports (interesting considering that just about everything else costs more in Canada), but don't have access to all of what American consumers do. Whether that's a good tradeoff or not likely depends on your own sports priorities.
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