Fox, Telemundo Upset Winners in World Cup

Fox and Telemundo have kicked long-time rights holders ESPN and Univision out of soccer's World Cup.

The winning bids were several times higher than rights to the tournament have cost in the past.

Fox will pay between $450 million and $500 million for the English language rights to beginning in 2015 to be crowned by the 2018 and 2022 Men's FIFA World Cup, according to Sports Business Journal. (ESPN, which retains the 2014 Cup, paid $100 million.) The package also includes the Women's World Cup in 2015 and 2019 and other FIFA events.

Telemundo reportedly agreed to pay $600 million for a package of multiplatform Spanish language rights that include the Women's World Cups in 2015 and 2019, as well as the Men's Cups in 2018 and 2022. (Univision paid $325 for the 2010 and 2012 Men's Cups.)

The FIFA World Cup and Women's World Cup are two of the world's biggest competitions. It is our privilege to be entrusted with these rights in the United States from 2015 through 2022," said David Hill, chairman of the Fox Sports Media Group.

Observers note that by the time these events are played, the demographics of the country will have shifted, with Hispanics accounting for a greater, more economically influential portion of the population. Hispanics are big soccer fans, watching in both English and Spanish, which would benefit both Fox and Telemundo. For Comcast and NBCU, the World Cup could give a big boost to Telemundo, which is trying to gain share against Univision, the dominant Spanish-language broadcaster.

"This landmark deal for Telemundo represents perhaps the greatest milestone in its history," Lauren Zalaznick, chairman, NBCUniversal Entertainment & Digital Networks and Integrated Media, said in a statement. (She was on a plane flying home from Zurich when the deal was officially announced.) "The acquisition of the FIFA World Cup, one of the world's great sporting events, speaks directly to the commitment NBCUniversal has made in the future of Telemundo and to our diverse U.S. Hispanic communities that we serve."

With the full promotional support of NBCUniversal, the Telemundo broadcast network and its local stations, cable network mun2, and all of Telemundo Media's associated online platforms will feature coverage of all FIFA Men and Women's World Cup games from 2015 through 2022. Additionally, both Telemundo and mun2 will provide extensive coverage of the FIFA Confederations Cup, FIFA Men's and Women's U-17 World Cup, FIFA Men's and Women's U-20 World Cup as well as live coverage of the official draws and ceremonies.  

The parent companies of both winning bidders, News Corp. and Comcast, are both thought to have ambitions to challenge ESPN's position as the dominant sports networks in the U.S. Both are helped when ESPN is denied a key property like the World Cup.

Fox can use the World Cup to help boost distribution and rights fees for its soccer channels. The matches could also wind up on FX, which just added college football and UFC. Other Fox cable channels could benefit as well, depending on how the company's sports strategy unfolds. Fox Broadcasting has been airing soccer games on Sundays when it doesn't have NFL doubleheaders and has been drawing acceptable ratings. Those ratings could grow if soccer ever fulfills its potential to become a more mainstream sport in the U.S.

Those World Cups are also fairly far off. Given the rate of increase for sports rights, the money they've agreed to pay might not seem quite so large in 2018, especially after the NFL gets done with its negotiations with its broadcast outlets.

While ESPN is often blamed for the rapidly escalating cost of sports rights -- most recently when it agreed to a new $15.2 billion deal with the NFL -- it's interesting to note that in three recent competitions, ESPN was outbid, losing the Olympics and the NHL to Comcast and NBCU, as well as the World Cup to Fox.

Sources close to ESPN say that the big NFL deal did not affect its ability to bid on other properties. Instead, the Olympics, NHL and World Cup outcomes show sports is becoming increasingly valuable original programming in a multiplatform and DVR media world where live viewing is prized. And it shows that the number of bidders for sports programming is growing and the competition is getting more intense.

Officially, ESPN said in a statement that "we made a disciplined bid that would have been both valuable to FIFA and profitable for our company, while continuing to grow our unprecedented coverage of the World Cup and Women's World Cup events. We were aggressive while remaining prudent from a business perspective."

ESPN added that it "remains committed to presenting the sport of soccer at the highest level across our platforms with coverage of the UEFA European Football Championship, English Premier League, La Liga, MLS and other top leagues and tournaments, including the 2014 World Cup in Brazil."

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.