After struggling to garner significant distribution with its all sports-news format, CNN/Sports Illustrated is slowly incorporating more live event programming into its lineup in an effort to increase its value to operators.
But operators said such a strategy could turn into a double-edged sword. While events such as the Wimbledon tennis tournament and National Association for Stock Car Racing coverage serve to build awareness for the channel, some executives are concerned that the addition of high-profile sports shows will eventually lead to higher licensing fees in the future.
Still, the event gambit has already yielded dividends for the network. CNN/SI added more than 1 million subscribers and nearly 50 cable systems over the summer, according to the network. That puts its subscriber count close to 20 million.
CNN/SI, a Cable News Network spinoff which launched in 1996, has struggled to distinguish itself in the crowded sports-news arena, despite utilizing the resources of Sports Illustrated
CNN/SI also suffered a setback two weeks ago, when the network laid off 11 of its more than 100 staffers as part of an "overall restructuring," said CNN/SI executive vice president Robinson.
Also, the network's Sports Tonight
show lost its prime 11 p.m. slot on CNN, which chose to devote the time period to more news-oriented shows. While the exposure on CNN certainly raised the network's profile, Robinson said the simultaneous feeds on CNN and CNN/SI led to some consumer confusion.
Yet despite its struggles, Robinson said the network would move forward. While there is a "plethora" of sports news to support a 24-hour network, he said, CNN/SI decided that live sports events could the network stand above the competition. Under sister service Turner Network Television's rights deal with Wimbledon, CNN/Sports Illustrated in 2000 first became an outlet for live sports programming.
The network also teamed up with TNT to secure deals with the Women's United Soccer Association and NASCAR.
The network last month acquired its first exclusive sports package, reaching an agreement to distribute National Lacrosse League games beginning next year. Robinson said the network will look to acquire other live sports events, although he stopped short of pledging to compete with other national services like ESPN and Fox Sports Net for high-profile and expensive pro sports league rights.
"We're looking at some golf and tennis events, as well as some college sports events," Robinson said.
But live sports programming packages often carry high costs, and some operators are already expressing concerns that CNN/SI's aggressive move toward event programming will result in higher license fees.
CNN/SI's rate card is around 10 cents to 15 cents, but many operators are offering the service for free for a number of years before the licensing fee kicks in.
"We've seen this scenario too many times," said one operator. "Once a network begins to add live sports product, the licensing fees skyrockets."
But Robinson said the network is not in the position to bid for marquee and costly pro league sports packages that would inevitably drive up operator fees.
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