New CFL/TSN Contract is Fair for Both Sides
So I finally got around to writing a bit about the new CFL on TSN television contract. I didn’t want to focus too much on the money spent because I figured many were wondering about how it would affect CFL television coverage in Canada. I thought the mainstream media did a reasonable job of covering the positive effects it will have on the well-being of the league. That was until I read Toronto Sports Media’s column on the new deal. TSM thinks that there is “NO way” TSN can make money off a deal where they are paying between 350, 000 and 400, 000 per game. He doesn’t really give any reasons why he thinks this, other than he doesn’t like the CFL. Now I have no idea how much revenue TSN makes off a given CFL game and considering his lack of evidence, I doubt he does either.
Most mainstream media sources cite the new CFL on TSN deal as being worth between $30 (The Star) and $40 million per year (Vancouver Sun). Either way that’s significantly more than the $15 million per season the CFL has received since going exclusive with TSN in 2008. The value of the league has more than doubled in five years. And that’s despite the fact that TSN signed the deal at the last-minute of their exclusive negotiating window. Not that any other networks were going to challenge TSN. Sportsnet is happy with the Blue Jays during the summer. CBC is facing budget cuts and will focus on keeping Hockey Night in Canada. Shaw shelved their proposed sports channel because they knew they couldn’t compete with Bell and Rogers.
Like I said, I have no idea how much revenue TSN gets from any individual CFL broadcast. So the only real comparison on how good the CFL’s new deal is another sports broadcast on TSN. The NHL gets around $33 million a season (or $200 million over six seasons) from TSN for 70 regular season TSN-produced broadcasts featuring Canadian teams and some playoff games. Depending on how many Canadian teams make the playoffs, some seasons TSN gets to show a Canadian team in the first round. Others they don’t. The past couple seasons have shown that it isn’t a guarantee.
TSN averaged 714, 000 viewers for NHL regular season games in 2009-10, with numbers in 2010-11 slightly higher. I don’t think TSN released season averages for last season. CFL on TSN regular season ratings have leveled off, averaging 637, 000 and 674, 000 in 2011 and 2012 respectively. This after the shockingly high average of 807, 000 in 2010. Those ratings aren’t that far below what TSN gets for the NHL. CFL is the second most consistent performer on Canadian TV, after NHL.
TSN pays around $475, 000 per regular season NHL game. Under the new contract, which sees the CFL regular season schedule increase from 72 to 81 regular season games when Ottawa joins the league next season. Using the median of the dollar values for the new CFL contract reported by the media, $35 million, TSN will pay just over $430, 000 per regular season game. Of course it is worth remembering TSN is paying for playoffs too, and TSN produces more NHL playoff games than the CFL has. TSN signed the NHL contract five years ago. NHL ratings have also jumped for TSN in that time. The NHL will certainly get more money for its next cable contract than it does now.
So, based on that, I think TSN is paying market value for CFL broadcasts. I think Toronto Sports Media is blinded by his dislike of the league, which isn’t unusual. A lot of people seem to deny how well Canadian football does for TSN for whatever reason. Even if TSN could pay less for the league, the two businesses have a great partnership. I don’t think either party wanted to rip-off the other, and I certainly don’t think TSN is “desperate for content” or that the CFL “stole 30 million dollars” (so are CFL rights worth nothing in that case?).
And even if TSN did pay more than the broadcasts are worth, surely the deal can also be considered as an investment for when TSN likely signs a new contract with the CFL in five more years. The CFL isn’t like the Olympics, or even the NHL. Putting money into the league makes a real difference. Every team should make money now. The new Ottawa franchise is entering a much more stable league than the Renegades did twelve years before. New stadiums are coming, the salary cap might go up, the CFL can put more into marketing and getting fans to the gate (personally I gained a greater appreciation after I saw a game live). That should translate into more fan interest, higher ratings and more adverting revenue for TSN over the next five seasons.