At least two Kingston cable providers will today add $400 to their customers' monthly bills to cover the cost of beaming the highly popular Fox Soccer Channel (FSC) into homes, as an exclusive deal between the American channel and local station SportsMax takes effect.

"Either pay $400 or lose the programme," said Mario Francis, general manager of Logic One Limited. "We are getting everything in place, customers who don't subscribe by the end of the month (yesterday) will lose the service."

Florence Darby, general manager of Telstar Cable Limited, gave a similar response. "Coming tomorrow (today), we have to show it based on people who pay," she told the Business Observer yesterday. "The stipulation is that the customers will now have to pay $400."

Last month, SportsMax announced that as of November 1 it would begin offering subscription packages on its satellite network to recover redistribution costs.

According to SportsMax chairman Pat Rousseau, his firm was spending between US$300,000 and US$400,000 per year on rights fees to redistribute Fox Soccer Channel.

As a result, he said he was forced to apply a monthly charge of $400 in Kingston and surrounding areas and $300 outside of the capital to local cable operators to beam the two channels offered on SportsMax Limited's satellite network.
These are its self-titled sports channel, SportsMax and the recently formed Fox Soccer Channel Jamaica (FSC Jamaica).

In September, International Media Content Limited (IMC), the parent company of SportsMax, signed an agreement with FSC, a subsidiary of United States broadcasting giant, Fox Network, which gave SportsMax broadcasting and distribution rights in Jamaica for the rebranded Fox Soccer Channel Jamaica.

According to Rousseau, the rights fees being soaked up by SportsMax, when combined with extensive production costs, meant that the business was not feasible merely generating revenue from advertisements.

This business model, he said, follows in the footsteps of well-known international networks such as Skysports, which, he claimed, generates up to 72 per cent of its revenue from subscriptions.

However, the additional monthly cost to watch football has raised the ire of many viewers, who have complained to this newspaper ever since the announcement was made.

Under the agreement, subscriptions will be made through the cable operators by customers. Therefore, it will not be a mandatory charge as the channel will be optional. However, some customers have argued that they are indirectly forced to pay for the service due to the fact that SportsMax, in acquiring the rights to distribute FSC, now basically owns the rights to distribute the majority of international football to the Jamaican market.

The only other local station that currently distributes live international football is CVM, which shows bi-weekly football games from the UEFA Champions League.

SportsMax and FSC, on the other hand, feature a variety of leagues live to viewers weekly.

Before the merger, SportsMax broadcast some games from the English Premier League (EPL) and English FA Cup. By combining with FSC, SportsMax Limited will now have local rights for some of the more popular global tournaments such as the UEFA Cup and Italian Serie A, as well as a substantial procurement of EPL and FA Cup games. According to a survey commissioned by SportsMax, the EPL is the most watched football league on local television.

Yesterday, one media expert, who wished to remain anonymous, described as a very smart strategic move, SportsMax's acquisition of the distribution rights of the most popular football league on local television. He also noted that the package was being introduced far into the season.
"They have the most popular league in football," he said. "In terms of timing, eight or nine weeks in the EPL have already passed, people are already locked into it and will be (lured) into subscribing. If they had hit you at the start of the season, then there would be a better chance of you ignoring the entire season."

Many of the complaints received by the Business Observer centred on whether the charge was fair to consumers.
According to Jackie Jackson, public relations officer at the Broadcasting Commission, SportsMax, as the rightful owner, is entitled to charge any amount of money they wish.

"The fact is, that is how it works with intellectual properties," said Jackson. "SportsMax bought the rights from FSC. In the market, intellectual properties are on sale like everything else."

Barbara Lee, an executive at the Fair Trading Commission (FTC), when contacted by the Business Observer, was unable to say whether SportsMax was breaching any FTC regulation. She said that her organisation would need to first investigate whether SportsMax has an unfair competitive advantage in the broadcasting market.

"That is very analytical and it will take some time," said Lee. "Before we can make a comment, we would have to look at whether there is a substantial lessening of competition."

But the media analyst with whom the Business Observer spoke, was adamant that SportsMax is not in any violation, but suggested that consumers, due to their negative perception, will definitely be "initially" hesitant in accepting the "priced" offer.

"I think they (SportsMax) are definitely entitled to charge a premium, but I wouldn't be surprised if the consumers put up some resistance," he said. "I would imagine that initially they would have some resistance because $400 is a high proportion of your cable bill."

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