StateТs Sport Channel Retired as Costs Soar

State media holding VGTRK wants to attract active young viewers and will use its Sport channel as the basis for a new station starting next year, provisionally called Rossia-2.

In the six years that Sport has been on-air, strong competition from paid, specialized sports channels has driven up the prices by several times for broadcasting rights to athletic events, said Anton Zlatopolsky, chief executive of VGTRK’s Rossia channel.

As a result, Sport is just barely breaking even, and VGTRK expects it to have revenue of $40 million this year.

By comparison, CTC television — one of the few Russian broadcasters that publish financial results — had revenue of $143.1 million last year.

Zlatopolsky said the most important and popular sports competitions could be shown in a more compact schedule than Sport has now.

The new channel will continue to broadcast the biggest draws — football, volleyball, basketball, hockey and figure skating — which are shown live. In total, sports will represent about one-third of the new channel’s programming.

According to TNS, Sport has 47 million viewers in Russia. The channel began broadcasting in June 2003 after lobbying from then-President Vladimir Putin.

The new channel will begin broadcasting from January 2010 and Vladimir Troyepolsky has been named its chief executive. He recently returned to VGTRK after working for just over a year as CEO of St. Petersburg’s Channel 5. The new channel’s launch will be financed through advertising on the frequency that is currently used by Sport. A budget and break-even target for the project have not yet been decided.

The nonsports broadcasting will be targeted at sophisticated, active young people older than 25, Zlatopolsky said. Among the programming will be art and documentary films that are only shown in the late evening or at night on Rossia because of the nature of that channel’s audience. He gave Alexei German Jr.’s film “Bumazhny Soldat” as an example.

The channel could also pick up popular Western television series. “We’re planning to attract a large female audience, as well as people who almost never watch federal television stations and spend most of their time online,” Zlatopolsky said.

Sports content is only profitable on paid TV channels, so reorganizing Sport makes sense, said Sergei Piskaryov, chief executive of Gazprom-Media. At the same time, there’s demand for content appealing to a young, active audience.

“The fight for young, active viewers is clearly getting tougher,” said Vyacheslav Murugov, chief producer at CTC Media. “VGTRK is a very serious player and Troyepolsky is an experienced executive.”

Piskaryov said it would be hard to say how successful VGTRK would be without seeing their product.