Soaring bar tab for sports TV sends shockwaves
For many of Canada’s sports bars, Monday will mark the start of a new kind of sticker shock on their cable bills. Both Rogers and Bell are significantly raising fees for businesses with liquor licences to air TSN and Sportsnet channels, depending on a variety of factors — like the number of TVs and the seating in their establishments. Why? Basically, because they can. Since the price hike was first reported by Scott Stinson of Postmedia, many bar owners have been waiting anxiously to see just what the new cost of doing business is going to be.
“It sounds like for us it may be $100 to $150 more a month, so you’re going to have to eat $1,200 more a year,” says Avery Barker, manager at McSorley’s Wonderful Saloon and Grill, a family sports bar and restaurant on Bayview Ave.
He realizes he doesn’t have a choice.
“If they told me I had to pay $120 more to get Sportsnet, for example — so for the Jays games — I’d pay it. Especially now, once hockey is over. The Raptors will probably get beat by Cleveland next round, unfortunately, so what do you have left? The Jays for the next four or five months. So you have to pay for that. I couldn’t not have the Jays on every single one of the TVs.”
Barker said he hasn’t been informed about the rising costs even though he recently dealt with his Rogers rep to upgrade to 4K TVs, and had to pay a premium for the requisite set boxes to run those.
“I’ve actually been surprised by how many people I’ve talked to that have no idea,” says James Rilett, Ontario VP of Restaurants Canada. “When I first heard about it, I couldn’t believe not just that they were doing it — and it’s not unheard of that these prices would rise — but . . . most people are going from paying an extra $10 a month to an extra $300 or $400. That’s just astounding. That’s an amazing cost to a small business that couldn’t plan for it.”
Rilett says he was surprised that the companies didn’t consult more before announcing the change.
Both Rogers and Bell have bet big on sports as a pillar of their businesses, and as they deal with the ramifications of cord cutting, the rise of Android boxes and other means of piracy, they have decided at the exact same moment to squeeze more out of their most captive customers.
After asking for comment from Rogers and Bell, all I got were canned statements about the rising costs of sports programming.
A Bell spokesperson passed on a link to a site that, confusingly, tries to explaining how much more customers are going to pay.
A Rogers spokesperson offered the following: “Our new commercial pricing reflects the value that live sports programming brings to bars and restaurants, given the volume of patrons and the sales that are driven by televised sports. We also understand the impact this change can have on a business and we’ve listened to our customers.”
But there is some hope. Similar to a Trump executive order that runs into resistance, Rogers and Bell have stepped back a bit in recent days.
On Thursday, Rilett sent an email to Restaurants Canada members, updating them on negotiations to soften the blow. After initially planning to bill establishments based on total seating, even if no television could be seen, now it will be based only on seating with a view of a TV. Bell and Rogers are also offering a cheaper basic cable package and more flexible month-to-month payment plans.
“It’s better, but it’s not great,” says Rilett of the concessions.
Everyone knows that sports programming is getting more expensive — highlighted by the 12-year, $5.2billion NHL rights package that Rogers is in the midst off — and that in recent years both companies’ media divisions have made cuts to maintain profits in a media business that is facing tectonic shifts. There are plenty of dire warnings that cable will face the same disruption that is already roiling the music and print media industries.
One need only look at the U.S. this past week, where ESPN — owned by Disney — cut more than 100 employees, including many top sports personalities. A drop in subscribers, in part due to cord cutting, was a factor, but many observers believe it has more to do with showing investors that the company is taking the business side of the operation seriously, even though — while it will definitely affect the product — it will barely dent the bottom line.
You can sort of see the logic from the Bell/Rogers side. Sports is considered the last bastion of appointment television, and if you are a sports fan and decide to cut down on your cable bill, or cut the cord all together, you know that if there’s a big game that you can’t miss, you can always head on down to a bar and watch it. These increased rates are a way to pass along the fees.
Of course, it’s only a matter of time before bars and pubs — which, according to Restaurants Canada, operate on an average profit margin of 4.1 per cent before tax — pass along those costs in the form of more expensive food and beverages.
As for recourse, Rilett says it is not a matter for the CRTC but that he has contacted the Competition Bureau, and heard that a formal complaint has been filed. But other than that, bars and restaurants are just going to have to eat the new costs. After all, what is a sports bar without sports?
They’re facing the same decisions that many Canadian consumers did when the big telcos unveiled pickand-pay cable package options last year. Bars and restaurants can choose not to have the country’s most popular sports channels, but for their continued livelihood that really isn’t much of an option at all.