Why Sunrise UPC relies on CH-Media instead of SRF

Sunrise UPC awards the Swiss ice hockey rights for broadcasting the free TV games for the next five seasons to CH Media. Why?

You have to see this in a larger context. We started a discussion about a strategic cooperation with CH Media. The free TV rights for ice hockey in German-speaking countries are just one of three components. Starting this summer, Sunrise UPC will also integrate the streaming platform from CH Media, Oneplus, into various bundle offers on our TV boxes. This means that potentially all customers with a TV subscription will have direct and easy access to Oneplus.

What is the third component about?

Sunrise UPC takes a 20 percent stake in CH Media’s national TV business. The background to this participation is that the areas of telecommunications, Internet access and TV broadcasting are merging more and more. The partnership allows us to tackle projects that add value for both sides.

So Sunrise UPC approached CH Media and not the other way around?

Yes. We have a lot in common with CH Media. Due to the technological development, the trend is towards the direct broadcast of advertising to individual consumers. This creates less wastage. Consumers also benefit from this. It will take less advertising to fund the content. This requires that you work together technologically and with the offers.

Can you give an example?

People are consuming more and more video content on their smartphones. As a result, the broadcast formats are also likely to change. What does the show “The Bachelor” look like when it is optimally prepared for smartphone users? We haven’t specifically discussed such things yet. But we agree that new formats can emerge from the different perspectives of Sunrise UPC and CH Media.

Is the cooperation with CH Media also a reaction to Swisscom’s new Blue Play streaming service?

No, discussions with CH Media started before the launch of Blue Play. The integration of Oneplus made even more sense in this context.

SRG has a bigger wallet than CH Media, but was probably more skeptical about the visibility of the MySports brand in the broadcasts. Was that the reason for the award to CH Media?

The partnership with CH Media is a strategic cooperation on various levels. So it wasn’t just about that aspect. But of course that was also a reason. The possibility of differentiating between pay-TV and free-TV transmission is greater with CH Media than with SRG. With digitization and changing user behavior, more flexibility is needed. We want to offer sports fans a broader range of offerings. To do this, we have to break down classic limitations.

Has the SRG recently tried to get back into the game?

Of course, the SRG is not happy about the decision. That’s logic. We also negotiated with SRG and asked them for their best possible offer. It is a matter of fairness to seek a solution with a long-standing partner of Swiss ice hockey.

But you didn’t negotiate again with the SRG?

The cooperation with CH Media is much broader than what would be possible with SRG. Our talks with CH Media were primarily about collaboration on streaming. When we saw that this made sense, we said to ourselves: You shouldn’t look at hockey rights in isolation. Further synergies are created in this area.

In the past, the choice of Internet subscription was decisive for which sports content someone could watch. Anyone interested in Swiss ice hockey had to be a UPC customer. Local football, on the other hand, was exclusively available from Swisscom.

When UPC founded MySports together with other cable network operators, the aim was to break the link between content and internet connection. MySports is still the “Home of Hockey”, while Swisscom is concentrating on football with Blue. Today, however, anyone with a Swisscom Internet connection can buy our MySports package. Conversely, our customers can also watch Blue content. Now we have a much healthier situation.

Once upon a time, TV offerings didn’t necessarily have to be profitable. The main aim was to win internet customers with exclusive content. Does the TV offer now have to be self-supporting?

The paid content of the TV offer has to pay off much more independently today. When Swisscom launched its TV service years ago, broadcasting via broadband internet was new. Today, a large part of the distribution takes place in this way. The whole cake is barely growing. It’s no longer about gaining market share at all costs. In this more rational environment, the profitability of the TV offering has come more to the fore.

Ice hockey sports rights are not exactly cheap. The production of MySports is also very complex. Can that even count?

We are well on the way to bringing the business into the break-even zone in the coming years. This also has to do with the fact that the legal situation has changed. We have also sharpened the offer. The typical ice hockey fan doesn’t watch much football and vice versa. That’s another reason why we clearly focused on ice hockey and bought the NHL rights. The fact that MySports is available on more and more platforms has also helped us to be on a good growth path.

Can you say something about the development of subscription numbers?

We don’t communicate specific numbers. But I can say that we have been able to grow in the last few quarters. In addition, I do not want to hide the fact that the games in the empty stadiums were a driver of growth during the pandemic. But since spectators have been admitted again, growth has continued.

Switzerland’s multilingualism is a cost driver. Ice hockey is also popular in Ticino and Romandy. How do you deal with that?

We already produce two full programs in German and French and comment on games in all three national languages. But that’s something we’ve been doing at MySports since the beginning – and we like doing it.

Is it conceivable that further partners will be added for the other language regions?

That will happen for sure. We have only assigned the main rights for German-speaking Switzerland to CH Media. Last but not least, we are looking for further partners for western Switzerland and the Italian-speaking area. Nothing is decided yet.

Is the SRG an option?

Yes of course.

If the SRG is now sulking because it got nothing in German-speaking Switzerland, you have a problem in Ticino.

I do not think so. We spoke to various potential partners. If SRG is interested, then that’s a good option for us. But there are alternatives.

Because of their sponsors, the ice hockey clubs are interested in as many spectators as possible. Are there any concerns from this side that the games will no longer be broadcast on SRF?

We coordinated closely with the league and always played with open cards. Selling the overall rights, including free TV games, only makes sense if there is an option for someone other than SRF to get a chance. Of course, we thought about the fact that there is good coverage in the advertising-relevant market. CH Media is not that far away from SRF. The various stations already reach the individual age groups well.

How important is the income from the sale of the free TV broadcasting rights for the refinancing of the overall ice hockey package?

That’s significant. But the cost of the whole package is many times higher.

Can one assume a mid-single-digit million amount per year?

We make no statement about this. The amounts have never been communicated in the past and we leave it at that.

Were the fees for the ice hockey sub-license offset against the purchase price for the share in CH Media’s TV business?

No. We receive money from CH Media for the ice hockey rights.

Are the revenues substantially lower than if you had granted the rights to SRF?

The amount is not identical, but is of a comparable order of magnitude.