We'll just give the tickets away free and get the greatest leather lungs we could find and put them in the first five rows. —Harold Ballard
The band finishes its rendition of the national anthem and the players take their positions for the opening kickoff of the Grey Cup game. A crowd’s roar blares from the public address system, but not from the handful of spectators in the stadium. They had hardly noticed the band or the players, absorbed instead in the hockey game on the mini-TVs on their laps. They’re watching pay-TV—as are the thousands who chose not to go to the stadium—along with the millions of viewers tuned in across North America. It may not be this year’s Grey Cup or the next year’s, but those futurists who chart the course of pay-TV can spy it coming. The Canadian Radio-television and Telecommunications Commission (CRTC) has put out a call for pay-TV licence applications with a July 10 deadline. It’s a medium already well established in the U.S., but recent developments have owners of professional sports franchises musing about empty arenas and parks, or megabucks. For Harold Ballard, owner of the Toronto Maple Leafs and the Hamilton Tiger-Cats, little musing is needed. “In lousy weather, why would somebody pay $15 to go to the park and sit in the cold, when he could pay $1.50, sit at home with a case of beer, and have a hell of an afternoon?” But Peter Bavasi, president of the Toronto Blue Jays, disagrees: “Marketed properly it can be used to attract people to come out to the ballpark. A pay-TV show can feature the entire event as an attractive entertainment.”
There is evidence for both sides. Toronto Maple Leaf and Montreal Canadiens home games have been televised for years on free home TV without adversely affecting attendance at their arenas. But, after this season, when there were 4,000 empty seats for the Buffalo Sabres first playoff game, the Sabres have decided to cable-cast six fewer home games next year, and add 21 away games. Jake Gaudaur, commissioner of the Canadian Football League (CFL), acknowledges the possible threat to attendance but admits: “You can’t arbitrarily disregard pay-TV because the potential revenues are so great.”
Sam Schulman owns the Seattle Supersonics of the National Basketball Association. Beginning next season, all Sonies home, away and preseason games will be available on pay-TV, a first. League commissioners and owners of teams in every pro sport are watching and waiting to see if the futurists are right, that Schulman will have to pipe in crowd noises as his team plays in an empty stadium. The Sonics’ season is being sold for $1.30 per game, but subscribers must purchase all 90 games. They pay $60 now and $60 when the preseason begins. There are 250,000 homes wired to cable TV in the Seattle area, and Schulman’s break-even point is 10,000 subscribers. “We started marketing the package in April and we’ve been getting 30 to 40 orders per day. Our studies show that we should get 20 per cent of the existing cable homes (approximately 50,000) and 60 to 80 per cent of new cable subscribers. After the first 10,000, we’ll make $500,000 for every 10,000 after that.” That’s an easy $2 million—hence the megabucks visions.
The projections, sometimes referred to as “cable math,” are staggering, even as present-day revenues are impressive. Madison Square Garden packages all its events for $7.50 a month. Thanks largely to the popularity of its Knicks basketball team and Rangers hockey team, the Garden grosses more than $6 million a year. If, like the Seattle situation, viewers were charged per game, revenues would exceed $8 million from Rangers home games alone. Chuck Dolan, the head of various cablevision systems, predicts that should the six professional New York area teams put their games together in a pay-TV package, they could share more than $100 million annually.
Canada is the most “cabled” country in the world with approximately 75 per cent of sets wired to one system or another, and Canadian cable TV technology is the most sophisticated. It is also one of the most heavily regulated systems. Whereas U.S. systems can provide anything from porno films to 24 hours of sports, Canadian licence aspirants must satisfy the CRTC’s Canadian content requirements and “siphoning” prohibitions. “Three main factors we will consider,” says Larry Durr, director general of broadcast planning and development for the CRTC, “are the percentage of time that is Canadian content, the percentage of programs acquired in Canada and the percentage of gross revenue devoted to acquiring Canadian programming.” Siphoningtaking programs that are currently broadcast without charge and putting them on pay-TV—is a trickier problem. “The FCC [Federal Communications Commission] in the U.S. has had difficulty legally and operationally with siphoning,” says Durr. In its call to applicants, the CRTC suggested that siphoning would not be tolerated, preferring not to legislate against it unless necessary. Pay-TV in Canada will not mean that subscribers will immediately enjoy all the games of the Expos, Eskimos, White Caps or whatever they fancy, but it shouldn’t be long. The CFL, for instance, is entering into the first year of its most lucrative TV package ever, a three-year network deal. But as Gaudaur muses: “Of course we wouldn’t allow games into cities at the time the home team is playing, but say eight million Canadian sets are wired to cable, one million opt for pay-TV, and 25 per cent of those want to watch football. Say they were charged $1 per game, and there’s 72 games. That’s $18 million.”
Potential revenues for Canada’s 22 major league franchises are impossible to predict. The baseball teams, playing 162 games, are in the most advantageous position and with just 22 Blue Jay and 24 Expos games scheduled on free TV, they have little concern with siphoning. The most likely development is packages of teams from different sports being sold to regional pay-TV systems. Aside from the optimistic forecasts in the New York City area, the example of Ed Snider, chairman of the board of the Philadelphia Flyers—who put together the rights to the baseball Phillies, hockey Flyers and basketball ’76ers and sold them as an ensemble—will probably be followed. Groups of teams, or even leagues, could sell their package to each licensee, subscribers purchasing what would amount to a sports channel.
The National Hockey League (NHL) is widely viewed on cable systems in the U.S. now, and league President John Ziegler has few fears of NHL games being “played” in TV studios, as some have suggested. “We’re in the entertainment business and put on 1,000 live shows a year. This year we played to 80-per-cent capacity with all the TV exposure. That’s one of the best percentages in the business.” Ziegler adds, however, that if the NHL had “40,000 to 50,000 seat venues [as do baseball, soccer and football] our concern would have to be greater.” Perhaps voicing that concern, beyond the revenue, of pay-TV for many owners and league commissioners, Jake Gaudaur says: “People are now still willing to pay $50 to take someone out to a game, but at what price they are unwilling is hard to predict. I might be oldfashioned, but I think once you empty the stands, the sport would die.”
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