Source : Globe & Mail

Canada's sports broadcasters face a grim future because of the National Hockey League labour dispute.

As the third month of the National Hockey League lockout approaches, the television picture is starting to look a little frightening.

According to information obtained by The Globe and Mail, audience figures for the three sports channels -- TSN, Rogers Sportsnet and The Score -- have plummeted.

At the CBC, which replaced Hockey Night in Canada with a tripleheader of movies, Saturday-night audiences, after a good start, have dropped by at least 50 per cent.

A year ago, Sportsnet had an average November viewership of 58,000 over 24 hours, seven days a week. This year, that number has sunk to 21,000, a drop of 64 per cent.

TSN would not release its audience numbers, but they would be similar to Sportsnet's in November and worse in October, when Sportsnet was buoyed by its postseason baseball coverage.

Sources say The Score has lost 50 per cent of its audience for the late-night and early-morning sportscasts, which hockey fans used to watch to get scores and highlights.

David Errington, the senior vice-president and general manager of The Score, would not confirm the network's audience drop, but predicted even tougher times ahead.

"I think now is crunch time," he said. "Until a few weeks ago, TSN had a lot of Canadian Football League programming. Sportsnet had baseball. Now, the rubber's hitting the road. Aside from NFL football on Sunday and Monday nights, and basketball, there's not much else. The tough times are now."

For some, the small audiences raise questions about Canada's ballyhooed reputation as a nation of hockey fanatics.

"The biggest myth in this country is that Canadians are dyed-in-the-wool hockey fans," a network executive said. "That's a lie. They don't watch juniors. They don't attend junior games to a great degree. They don't watch the [American Hockey League], and you could say they don't watch NHL games involving U.S. teams. Just ask TSN about their numbers when the Leafs aren't playing.

"They will watch the home team in great numbers, they will watch the Stanley Cup playoffs and they will watch Team Canada. What they won't do is watch anything with a puck and a stick."

In locking out its players, the NHL promised to take hockey to a new era of financial stability. But for sports TV, the NHL's new world, as it exists now, is represented by glum fans singing "Do you really want to hurt me?" Between commercials mourning the absence of hockey, content consists of tedious labour debates between hockey analysts and the interminable telecasts of classic games.

"Did you see Mark Messier's goal last night?" a sports fan asked. "Well, it wasn't last night, exactly. I think it was in 1981."

Hardly a hot topic over coffee.

But if the lockout is tough on the fans, consider the wasteland the NHL has made for the networks.

TSN and Sportsnet already have lost millions of dollars in revenue. Total advertising time on a 21/2-hour telecast of a Toronto Maple Leafs game on TSN sells for about $400,000. Telecasting an NHL game on TSN produces revenue of about $200,000. So far, the lockout has denied TSN four Leafs games and 16 other NHL telecasts. That adds up to a loss of almost $5-million.

But the networks get a break because they don't have to pay rights fees and production costs. Since NHL hockey is a loss leader for the sports cable channels, they are ahead of the game without the telecasts in the short term.

"You would be absolutely wrong to say the sports networks are hurting financially right now," a network executive said. "But it's hard to know the long-term impact, because no one's sat out for a whole year. In the short term, there is no financial hit. But nobody wants to test the theory, because who knows?"

Another executive said: "There's obviously a reason people pay those hockey rights fees. It brings the whole average audience up, it's branding for the network and all those sorts of things."

Hockey's absence has an impact not just on game telecasts, but also on audience numbers and revenue across the board. Hardest hit are the sportscasts. They're big revenue earners for sports channels because they are relatively cheap to produce, no rights fees are involved and they draw large audiences.

But without hockey highlights and scores, and without a game to lead into a 10 p.m. sportscast, viewers have stopped watching.

Consider the average audiences for Sportsnet's early-evening and late-evening sportscasts in November. Last year, Sportsnet averaged 92,000 viewers for the 10 p.m. show. This year, the audience was only 40,000. The dinner-hour sportscast dropped to 38,000 from 64,000. TSN would have experienced a similar decrease.

Revenue also is in free fall, and it's not just because advertisers are avoiding hockey games. Sports networks sell hockey as the main component in a bundle of programs. Shows such as Sportsnet's Hockey Central and TSN's That's Hockey are also hurting.

"A lot of ad agencies are either not spending the money or moving it into other types of programming," a network executive said. "The sports networks are all trying to find a way to capture those dollars, but are they successful? I don't think so."

The CBC breaks even on hockey in the regular season and then makes hay during the playoffs. On a good year, advertising revenue from Hockey Night in Canada will bring in a profit of about $30-million. Another $20-million in ad time is tied to Hockey Night in packages consisting of other shows. That revenue would disappear if the lockout lasts a full season.

"The impact on the CBC would be devastating," a TV source said. "Hockey Night helps finance so much of the CBC's programming outside sports."

In radio, damage seems to be small. At least, that's the official word. Rights holders in Ottawa and Vancouver say revenue is holding up despite the absence of game broadcasts. The fall ratings book comes out in December and it will give an indication of the degree of audience erosion. Apparently, listeners are still calling in.

"The phone boards have been absolutely jacked," said Rick Dhaliwal, the sports director of Team 1040 in Vancouver, although he feels the absence of hockey puts more pressure on reporters to break stories and stimulate discussion.

Chris Gordon, the vice-president and general manager of Team 1200 in Ottawa, says his station isn't hurting, but concedes January, February and March will be grim without hockey.

John Cassaday, the head of Corus Entertainment, which owns a network of stations including NHL rights holders CKNW in Vancouver and Mojo Radio in Toronto, says he is concerned about the long-term effect of the lockout.

"For Mojo in Toronto, so much of the personality of the station revolves around the Leafs," he said. "I think we're doing a good job in programming now to maintain fan interest. Clearly, we can keep the passion alive for a period of time. But if this thing goes one season or two seasons, it will have an impact."

For television, replacement programming has consisted of classic games, poker and additional National Basketball Association content. Sportsnet is carrying junior hockey and AHL content. TSN also has aired some AHL games. But these hockey telecasts produce about one quarter of the audience that an NHL game would pull in.

However, David Akande, the vice-president of programming for Sportsnet, isn't giving up on live hockey content. He notes that Sportsnet's AHL audiences are up 54 per cent from last year. As well, Sportsnet has signed a rights deal with Swedish hockey to carry 10 games near the end of December. It will also air the Spengler Cup tournament during the holiday season.

TSN will continue its traditional world junior tournament coverage, and there's talk of International Management Group selling second viewing rights to its pay-per-view telecast of a European tour by NHL players.

© The Globe and Mail