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Tags: Fox | sports | ESPN | Murdoch

Murdoch's Fox Sports 1 Channel Suits Up to Tackle ESPN

Wednesday, 14 August 2013 02:00 PM EDT

As Rupert Murdoch's 21st Century Fox prepares to launch the Fox Sports 1 network on Saturday, it still has not signed deals with some of the largest cable and satellite operators and has no plans to air a single National Football League game.

Instead, it is taking on Disney sports juggernaut ESPN with a lineup that features NASCAR, college football and basketball, mixed martial arts and a new sports show starring Regis Philbin.

Fox executives told analysts at an Aug. 8 investors' meeting that they see an opening for an ESPN competitor in a sports market they say continues to grow. Fox has a history of taking on entrenched incumbents, as they did when they launched Fox News in 1996 and went on to topple CNN.

Their sports channel is unlikely to win a quick victory over ESPN, which has a huge head start and a long list of popular sports rights, but Murdoch has also shown he's willing to be patient and absorb losses to take on incumbents.

"The decision has been made very high up that this is something Fox wants, and a few losses won't stop them," said consultant Ed Desser, a former NBA Television executive who advises on sports rights deals. "Few companies have the connections, the leverage and the deep pockets to take on this kind of a challenge."

More importantly, advertisers covet the male viewer that Fox Sports 1 intends to target. Media buyers say the popularity of live sporting events leaves plenty of room for a new round-the-clock sports channel.

Jeremy Carey, director of Optimum Sports, the sports marketing agency of Omnicom Media Group, said his clients look favorably on the new channel's prospects, especially the 5,000 hours a year of live sports Fox is promising.

As of now, Fox has no signed deals with DirecTV, Time Warner Cable and Dish Network, which are some of the largest U.S. TV providers. So far they will not agree to the monthly charge the company is demanding for each of the 90 million homes Fox Sports 1 aims to reach.

The debut of the new channel involves a change in programming at Fox's Speed, a channel devoted to motor sports. Fox wants operators to pay more than the average of 22 cents per subscriber per month that they pay now, according to research firm SNL Kagan.

A source familiar with the talks said operators that do not want to pay the higher fees by Saturday will receive the Speed channel. Kagan estimates that it may take until the end of the year to get all the operators on board.

Fox also seems willing to wait for a piece of NFL action. While the NFL Network currently has the rights to show most Thursday night matchups, sports networks and broadcasters are hoping the league will eventually sell the rights to those games to other media companies.

If so, Fox is expected to bid on a Thursday-night package, according to sports consultant Marc Ganis, who advises teams on TV contracts. The rights could run $1 billion or more, he said.

"There's no other programming out there that would elevate Fox Sports into a full-fledged competitor with ESPN than NFL games," said Ganis.

Ganis says a bidding war could erupt, with Fox, ESPN, Time Warner's Turner Sports and Comcast's NBC Sports all interested in getting the additional NFL games. The NFL declined to comment on its plans.

Fox already has a profitable base of 22 regional sports channels it can tap for its new network. Slated live programming includes college football and basketball games, European soccer, horse racing, ultimate fighting-championship bouts, and select car racing.

Next year it is scheduled to add Major League Baseball, and it snagged the U.S. Open golf tournament from NBC and ESPN, starting in 2015.

It can also promote Fox Sports 1 offerings on its broadcast network airing of NFL games and the Major League Baseball playoffs.

To set itself apart, Fox executives will embrace the same cheeky style as Fox's NFL telecast and its other sports shows. Former morning talk-show host Regis Philbin will host "Crowd Goes Wild," a live sports-entertainment talk show with panelists, at 5 p.m. Comedic commentators Jay Onrait and Dan O'Toole, hosts of the Canadian sports-clip program "SportsCentre," will host a nightly show "Fox Sports Live."

Fox has to contend with a powerful ESPN lineup that includes the multiyear rights to many highly watched programs, including the NFL's "Monday Night Football," college football's national championship, pro basketball games and the Wimbledon tennis tournament.

Meanwhile ESPN has beefed up its program lineup by hiring the outspoken former political commentator Keith Olbermann, who will host a nightly talk show on ESPN2, and popular political and sports statistics guru Nate Silver.

In the past few months it acquired the exclusive rights to the finals of the U.S. Open, adding to its existing deal for the tennis tournament. It also struck a 20-year deal with the rabidly followed Southeastern Conference to create a channel starting in 2014 that will showcase football and basketball games.

"We've faced a lot of competition throughout our history and it's made us better," ESPN Executive Vice President Norby Williamson said in an e-mail.

Walt Disney CEO Bob Iger told analysts that ESPN saw no "impact whatsoever" by Fox Sports 1 on sales for upfront advertising, but its recent moves show it wants to keep its new No. 2 distantly in the rear view mirror, say analysts.

"I think it could energize ESPN a bit to have a new player on the block," said Morningstar analyst Michael Corty.


© 2022 Thomson/Reuters. All rights reserved.

As Rupert Murdoch's 21st Century Fox prepares to launch the Fox Sports 1 network on Saturday, it still has not signed deals with some of the largest cable and satellite operators and has no plans to air a single National Football League game.
Wednesday, 14 August 2013 02:00 PM
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