MLSE deal doesn’t scare Score Media boss

Jan
10

Josh Rubin

John Levy could be forgiven for being a little worried.

After all, when you run the only independent sports network in the country at a time when two major telecommunications firms are snapping up the Toronto Maple Leafs and Toronto Raptors, it makes it an even tougher competitive landscape.

But the chairman and CEO of Score Media insists he's not losing any sleep over the purchase of a controlling stake in Maple Leaf Sports and Entertainment by Rogers and BCE.

"I don't worry about it. We don't have the Raptors or the Leafs, but we've got the NBA for another couple of years, we've got the NCAA, we've got the WWE," said Levy after his company's annual general meeting Monday. The company announced fiscal first quarter earnings fell to $212,000 from $856,000 a year ago. Revenues rose 14 per cent to $13.4 million.

The federal Competition Bureau announced it would be reviewing the purchase of MLSE shortly after the proposed deal was announced in early December. Rogers and Sportsnet bought most of the 80 per cent stake owned by the Ontario Teachers Pension Plan, with the rest going to MLSE chairman Larry Tanenbaum. Rogers owns Sportsnet, a regional sports network, while BCE owns TSN.

It wouldn't be a surprise to see the Bureau put some kind of restriction on the new owners of the biggest sports property in the country, says Joseph R. D'Cruz, a professor of strategic management at the U of T's Rotman School of Management. That could include requiring Rogers and BCE to sell the rights to a few Leaf or Raptor games per season to another network, or making games available to other mobile phone carriers or companies with mobile apps such as Score.

"I get the sense they'll do something, but that it might be a bit timid," said D'Cruz. "I think some form of compulsory licensing at a reasonable price would be helpful."

That compulsory licensing, points out D'Cruz, would put the Bureau in line with a recent ruling from the Canadian Radio-television and Telecommunications Commission, which said Bell Mobility must provide exclusive NHL and NFL mobile content to its wireless rival Telus.

"I think this deal may open up some neat opportunities for us. We'll let the chips fall where they may," said Levy.

Whether those opportunities include the rights to some Leaf and Raptor games, Levy is already pushing ahead with other sports, including a new deal announced Monday to air more NCAA football, basketball and hockey.

The deal includes 250 hours of games from NCAA Division I conferences such as the Big 12, Pac-12 and Conference USA.

The company is also pushing ahead with its digital division, including its popular Score Mobile app, which has 3.3 million unique users per month in North America. That digital push, said Levy, is the biggest reason why net earnings dropped in the fiscal first quarter. Over the last year, Levy said, Score Media has grown from a staff of roughly 240 people to 300 today. Most of those hirings have come on the digital side, and Levy's not making any apologies for the heavy spending.

"You've got to do it smart, but you've got to do it fast, because otherwise some guy sitting in a garage somewhere will eat your lunch," Levy said.

Among the people hired were a pair of advertising sales representatives based in the U.S. to develop the company's growing mobile audience south of the border.

For the moment, the digital division is still running well behind the TV side in revenue, but is growing. In the fiscal first quarter, the digital division brought in over $1 million in revenue for the first time. Within three to five years, Levy hopes the digital division will match the TV side in revenues.

Levy, meanwhile, denied Score Media is actively being shopped around, but admitted it could always be sold if the price is right.

"We'll look at and entertain anything that comes in front of us," Levy said.