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TSN posted its most profitable year on record, notching a $118.6-million pretax profit during the 2020 broadcast year.Fred Lum/The Globe and Mail

The COVID-19 pandemic proved to be very good for the bottom line of TSN – The Sports Network.

Thousands of professional sports matches evaporated from the calendar during the first wave of the COVID-19 pandemic, but Bell Media’s cable sports channel posted its most profitable year on record, notching a $118.6-million pretax profit during the 2020 broadcast year, according to figures published last month by the federal television regulator.

The pandemic forced the suspension of most pro sports in the middle of March, 2020, a little more than halfway through the broadcast year, which ended Aug. 31, 2020.

TSN’s profit was the largest one on record for the channel, an increase of almost 41 per cent over the $84-million it earned in 2019.

The channel’s main competition, Sportsnet, fared less well, slipping from its regular perch as the most profitable discretionary TV service to the second most profitable, according to an annual financial snapshot released in July by the Canadian Radio-television and Telecommunications Commission (CRTC).

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Sportsnet booked pretax profits of $55.4-million for its main service, down 55 per cent from $121.5-million in the 2019 broadcast year. It booked an additional 2020 pretax profit of $43-million for its Sportsnet One service.

TSN was not alone in benefiting from the pandemic. But unlike services such as Amazon and Netflix, which experienced soaring demand from a suddenly homebound and captive population, the hike in TSN’s earnings came despite a drop in the number of those who subscribe to the channel through a cable-style service such as Rogers Cable, Telus Optik, or Bell Fibe, or via satellite.

TSN’s national advertising revenue fell by almost 32 per cent, and a Scotiabank research note in June, 2020, suggested that as many as 50 per cent of typical sports viewers had simply stopped tuning into Canadian sports channels.

(The figures released by the CRTC do not include revenue earned from customers who subscribe through the companies’ direct-to-consumer digital services such as TSN Direct and Sportsnet Now, which are growing in popularity as viewers cut their cable cords.)

Cuts in expenses at TSN more than made up for the loss of revenue, as the channel saved more than 18 per cent on programming and production costs because of the cancellation of numerous marquee events, such as the Wimbledon tennis tournament and Formula One racing. Among its savings, TSN spent almost 23 per cent less on acquisition rights for Canadian programming, such as games staged by the Canadian Football League, which cancelled its entire 2020 season.

At the same time, TSN earned more TV subscription revenue despite a drop in the number of its subscribers, suggesting the channel increased the fees it charged to customers even as it provided fewer of the live sports events that are the core of its programming.

TSN reported 6.8 million subscribers as of Aug. 31, 2020, down 8.6 per cent from the 7.4 million subscribers it reported as of Aug. 31, 2019. Still, its total revenue earned from subscribers rose 3.5 per cent, from $356-million in 2019 to $368-million. On average, TSN earned $54.36 in subscription fees in 2020 from each customer, an increase of 13 per cent over the $48.01 it earned in 2019.

(Subscribers pay more than that fee, once retail markups charged by cable or satellite companies, which can run between 50 and 100 per cent, are taken into account.)

That means TSN was spending significantly less on programming and production even as it raised the fees it charged subscribers.

TSN declined to comment for this story.

When The Globe and Mail asked the company last summer, more than three months into the live sports shutdown, how it justified continuing to charge its customers its usual fees, a spokesperson replied that TSN had “continued to offer great value to our subscribers in a multitude of ways,” including more news and information programming.

Sportsnet also saw a jump in revenue from subscription fees, earning about $322-million in 2020, an increase of 2.3 per cent over the $314-million it recorded in 2019. Its number of subscribers fell 6.9 per cent, from about 6.8 million in 2019 to 6.3 million in 2020. But the channel’s lower profit – largely as a result of a 35-per-cent drop in national advertising revenue – was its smallest since 2015.

Sportsnet did not respond by deadline to a request for comment.

When sports shut down last year, powerful U.S. politicians such as the Attorney-General of New York State called on cable and satellite services to offer rebates to customers, to make up for the reduced programming. No such high-profile effort unfolded in Canada, and neither TSN nor Sportsnet made any such offers to their cable or satellite customers.

While the sports channels suffered viewership and advertising declines more than other discretionary services, they also led the industry’s bounce back once live sports began to return to television last summer.

After falling 86 per cent between March and July, 2020, from the previous years, ad revenue on Sportsnet shot up 379 per cent in August and September over the same period in 2019, according to a Globe and Mail report. (That reflected the unusual return of NHL hockey during a time of the year that Sportsnet is usually airing less popular programming.) Ad sales for TSN, which had fallen an estimated 80 per cent between March and July, 2020, rebounded in late summer and were up an estimated 36 per cent in August and September, 2020 over 2019.

The Globe report cited data provided by Standard Media Index, a New York-based company that compiles billings of major advertising agencies.