The already crowded media sports arena will feature another national entry come late summer, as News Corp.’s Fox Networks Group finally proclaimed the launch of Fox Sports 1.
After a year of reports and speculation, the official announcement of what News Corp. COO Chase Carey had described during a recent second-quarter earnings call as “the worst-kept secret” in media came on March 5 at a press conference followed by an upfront presentation to advertisers in New York. Fox Sports 1 will be converted from the 85-million subscriber Speed and launch in 90 million homes, the most ever for a sports cable network bow.
The network comes armed with an impressive array of rights: college football (primetime game on Thursdays and tripleheaders on Saturday) and basketball; UEFA and FIFA-sanctioned soccer, inlcuding the Women's World Cup in 2015; NASCAR stock-car racing; and the Ultimate Fighting Championship (the mixed martial arts circuit is set to occupy primetime on Wednesdays) will be on tap through rights deals the programmer has inked with the various circuits. An expansive lineup of regular- and post-season rights to Major League Baseball will be in play with the 2014 season.
At the outset, 55% of Fox Sports 1 lineup, some 4,800 hours, will air live, including events, originals and news. Fox Sports will establish a 24/7 news operation featuring Fox Sports Live on FS1, which will go head-to-head with ESPN’s signature SportsCenter at 11 p.m. (ET).
Fox’s push, a gambit to produce more affiliate and advertising revenue by leveraging recently secured game and match rights, takes aim at ESPN’s empire that stretches across myriad sports and platforms, as well as NBC and CBS. Those companies are trying to build the business and profile of their respective national cable services, NBC Sports Network and CBS Sports Network.
The sports space — which remains at the center of cries about escalating programming costs -- also includes league-owned, national services from the NFL, MLB, NBA and NHL, plus regional sports networks, including 22 of which Fox controls, covering pro and college teams across the U.S.
During the presentation, Fox Sports, which touted its array of properties, including Super Bowl XLVIII in New Jersey, trumpeted News Corp.'s upstart legacy. The clip extolled Fox’s entry into the three-broadcast network world of the 1980s and how Fox News Channel's challenged and surpassed CNN in the cable news space a decade later. The presentation noted that with the arrival of the national cable sports service, "Fox is ready to change the television landscape again."
David Hill, who led Fox Sports when it launched 20 years ago and is helping Fox Sports Media Group co-presidents and co-COOs Randy Freer and Eric Shanks oversee the new channel -- indicated that Fox Sports 1 has been in the works in "various degrees of seriousness for I'd say 15 years.” They know becoming “a viable alternative” to ESPN, much less toppling the worldwide leader, won’t come easily or quickly.
"Our hope is that we can be equally professional" with ESPN, said Hill. "It's going to take us a while. We're not expecting to knock ESPN off in the first week or two. It's going to take two to three years. It will be a slog."
Carey, speaking at the Deutsche Bank Media, Internet and Telecom conference in Palm Beach. Fla., on March 5, said Fox Sports1 could become a “cornerstone” network for News, while predicting losses for “a couple years” as “we ramp up the rate with it.” He noted, though, that the net’s launch with national distribution means the climb will be “nothing close to what it would be if we were trying to build a network from scratch.”
ESPN spokesman Mike Soltys said, "We like our position. We've always had vigorous competition so there is really nothing substantially new here. Others are beginning to recognize what we've long known – the power of live sports."
One longtime sports media executive noted that while FS1 has amassed a strong collection of rights, none of the properties are exclusive and can be found on other places on the cable dial.
While it won’t approach ESPN’s $5.26-plus monthly subscriber license fee (SNL Kagan), the financial community also believes Fox’s national sports cable play will hit fiscal paydirt for News Corp. over time. Noting that rights costs have been baked into comprehensive media deals Fox Sports has already transacted and that the only major rights coming up on the national horizon are held by the NBA, they aver that FS1 will grow ad sales -- Shanks said the goal is to use the double box commercial format, which splits the screen keeping one eye on the field during breaks, on live events – and command a license fee well above Speed’s current monthly fee
“We expect new affiliate rates to be negotiated as renewals for Speed come up, but believe recent deals include higher rates,” wrote Credit Suisse analyst Michael Senno. “Thus, it could take a few years for the affiliate fee to grow from $0.22 to the $1 per subscriber we feel it could earn.
Morgan Stanley analyst Benjamin Swinburne also saw significant potential.
“The incremental expenses here are the marketing and production costs, along with content costs at other networks such as FX to replace sports content moving to Fox Sports 1,” he wrote in a note. “Realistically, a five-year view, assuming a $1.50 monthly affiliate fee with industry average sports network margins and advertising revenues suggests a $500 million [earnings before interest, taxes, depreciation and amortization] EBITDA stream and a $5 billion-plus asset.”
TV programming aside, FS1 will be an integral part of FSMG’s expanding digital and TV Everywhere presence.
Fox Sports Go, an authenticated mobile sports service for iPhone, iPad, Android devices and the Web, ultimately will offer more than 1,000 games and events from Fox Sports, Fox Sports 1 and Fox’s 22 regional sports networks, plus scores, highlights, news, stats and analysis. Akin to Watch ESPN, subscribers to cable, satellite and telco affiliates will have access to the service.
Fox was still determining what would happen with the content that is available on broadband service Speed 2.
“We’re redesigning Fox Sports.com and re-launching all of our mobile app as Fox Sports Go in April,” said Shanks after the press conference. “The authenticated video comes in August with college football. [Subcribers] will type in their Comcast or DirectTV user name and password and be able to watch up to 1000 live events per year.”
Shanks and Freer said the high ratings produced by RSNs will feed FS1 programming in general and news programming in particular.
“We have a base of live rights that will attract people to the other shows. We have an 8 rating [on the RSN] in Miami, a 9 rating in Detroit and 12 rating in Oklahoma. We’ll try to drive all of those rating points with messaging from the RSNs to go to Fox Sports Live,” said Shanks, noting that on-air talent will mention specific channel positions on the different providers. “Telling viewers the channel number is a huge advantage for us.”
Promos will also come from other News Corp. outlets. During the upfront presentation, NFL analyst Troy Aikman and Fox News Channel anchor Shepard Smith were seen delivering taped FS1 promo messages.
Along with live events and news coverage, FS1 will also showcase Rush Hour, hosted by former Live! cohost Regis Philbin. Styled after The View with Philbin serving as the host of a panel that will rotate between sports professionals, celebrity guest and fans, the one-hour Rush Hour will air at 5 p.m. and be followed by Fox Football Daily, an extension of Fox's Fox NFL Sunday, the network's Sunday pregame show.
One thing Fox Sports didn’t announce was a deal with the so-called Catholic 7, the seven breakaway Big East schools that will tip off their own basketball-centric league in time for the 2013-14 academic year.
The seven schools — DePaul, Georgetown, Marquette, Providence, Seton Hall, St. John’s and Villanova — are expected to retain the conference’s old moniker and tournament site at Madison Square Garden, add Butler, Xavier and Creighton, with St. Louis, Dayton, Richmond and/or VCU joining down the road. Freer said Fox hopes “to wrap something up in the not-too-distant future." During the upfront presentation, Shanks said the programmer was not ready to announce a deal, but “the college basketball we do acquire will be a beast. Get the joke?"
[On March 8, the seven basketball schools announced they would leave on July 1; Fox did not issue any further comment.]
The build-up to FS1 aside, there could be more launch action to come out of Fox Networks Group in the months ahead. A second national sports service, Fox Sports 2, borne out of action sports and UFC proponent Fuel, has been discussed. Similarly, questions remain about whether Fox Soccer Channel will morph into FXX, a comedic entry from FX, which would remain home to the service’s drama series and genre theatricals.
“We’re always looking at how to create the most value of these assets,” Freer said after the press conference. “Over the course of coming weeks and months, there will be more talk about will happen to other channels.”
Asked specifically if there would be a Fox Sports 2 this year or next, Freer said there has been no determination yet about FS2, adding “we’ll leave any FX announcements to FX.”
The smarter way to stay on top of the multichannel video marketplace. Sign up below.
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.