Quebec sports TV is going through a bad financial patch. The red ink that has colored TVA Sports’ financial performance since the channel’s inception has just soaked the results of RDS.
The combination of the RDS and RDS Info channels as well as their competitor TVA Sports each lost $9 million for the broadcast year from September 1, 2021 to August 31.
These figures published by the Canadian Radio-television and Telecommunications Commission (CRTC) cover a period which coincides with the season of misery for the Montreal Canadiens in 2021-2022. That season, the Montreal hockey club missed the playoffs after collecting just 55 points in 82 games.
Only a few years ago, RDS was the most profitable French-language TV channel in Quebec. In 2016, RDS and RDS Info had together generated profits totaling 22.5 million.
For its part, TVA Sports has always been heavily in the red. It has lost money every year since its inception. In 11 years, TVA Sports has lost around 220 million.
A problem that affects both RDS and TVA Sports is the loss of subscribers by 5% to 10% per year for several years.
CRTC data shows that TVA Sports lost 9% of its subscribers in 2021-2022, i.e. more than 122,000 subscribers, while RDS lost 7% of its subscribers, the equivalent of nearly 125,000 subscribers.
In four years, the number of TVA Sports subscribers has increased from 1.7 million to 1.3 million. At RDS, the number of subscribers increased from 2.5 million to 1.7 million during the same period.
Another concern for sports channels is the rising cost of broadcast rights. In the United States, even the ESPN network – owned by Disney – is questioning its business model as observers suggest that Apple should consider acquiring ESPN.
The RDS channel alone posted a net loss of 2.1 million in 2021-2022, while a year earlier its profits had doubled to 16 million. RDS Info for its part lost 7 million in 2021-2022, a loss comparable to those of previous years.
The results of these two Bell Media-owned channels are published separately because they are operated under separate licenses.
However, RDS revenues increased by 7%, to 153.1 million, in 2021-2022. National advertising revenue notably jumped 14% to 39 million. Programming and production spending, however, exploded by 27%, to 136 million, during the period. This situation weighed heavily on the increase in total expenses and caused the drop in profitability.
RDS programming and production spending had fallen to $107 million a year earlier, as the pandemic-shortened NHL hockey season had just 56 games per team rather than the usual 82.
TVA has previously explained that postponing the start of the 2020-2021 NHL season to 2021 resulted in “significant one-time cost savings” in 2020.
The profitability of RDS for 2020-2021 could therefore also have benefited from the season cut short by the pandemic.
At TVA Sports, the net loss of 9 million recorded for 2021-2022 compares to a net loss of 11 million a year earlier. Advertising revenue fell 24% to $19.2 million in 2021-22. This fall was partially offset by a reduction in production and programming expenses of around 13%.
Asked to comment on these figures, TVA Group management told La Presse by email that TVA Sports’ results were affected by the decline in advertising revenue attributable to the current crisis affecting all media.
TVA management also adds that it is continuing the regulatory process with the aim of reaching an agreement with Bell regarding the royalties of its specialty channels, including TVA Sports, so that they reflect the “fair market value of those -this “.
Listed on the stock exchange, Groupe TVA – parent company of TVA Sports – presents its financial results on a quarterly basis. For the period from October 1, 2021 to September 30, TVA Group generated net profit attributable to its shareholders of 3.5 million.
It is therefore reasonable to believe that the TVA Group could have generated a net profit approximately three times greater for its shareholders during these 12 months without TVA Sports.
It was not possible on Wednesday to obtain a comment from Bell about RDS.
