ESPN Goes Regional With New Network

The war has officially begun.

ESPN, a national sports network, announced Wednesday that it is entering Fox’s domain with the creation of a new Southern California regional sports network to be called ESPN West.

It will be the first of what ESPN and its parent company, Disney, hope is a number of regional sports networks to combat the Fox Sports Net, a group of regional sports networks, including Fox Sports West and Fox Sports West 2, that reach 58 million homes. Fox Sports Net is a joint venture of Fox Inc., a unit of Rupert Murdoch’s News Corporation, and Liberty Media, the programming arm of Tele-Communications, Inc.

ESPN West, which will serve Southern California, Nevada and Hawaii, will be launched in October, at the start of the NHL season. It will be a stand-alone, 24-hour service.

The announcement was made by George Bodenheimer, ESPN’s executive vice president of sales and marketing, at a cable convention in Anaheim, a fitting site because ESPN West will have the Disney-owned Mighty Ducks and Angels as its flagship properties.

“They should call it ESPN Orange County,” quipped one cable executive.

Bodenheimer said ESPN West will carry 40 Mighty Duck games next season and then, beginning in 1999, 37 Angel games. The number of Angel telecasts will increase to 50 in 2000.

He said the network’s full program schedule is in development, but it is anticipated that it will include ESPNEWS, Mexican League Baseball, Latin American Soccer and lifestyle programming such as surfing, biking, fitness and extreme sports. ESPN’s resources include 20 international networks.

High school sports and local colleges such as Pepperdine and Loyola Marymount are other possibilities for ESPN West. Fox has USC and UCLA locked up with long-term deals.

Fox also has the Lakers and Kings locked up until 2010, and the Clippers for four more years.

That doesn’t leave much local inventory for ESPN West.

Still, Bodenheimer believes ESPN West will undergo a smooth start-up, unlike what happened when Fox Sports West 2 was launched in January. Southern California cable operators resisted Fox Sports West 2’s original asking price of about 75 cents per subscriber per month. It took a price reduction to 50 cents to bring some operators aboard, although Century Cable and a few others have steadfastly resisted all offers.

Bodenheimer said no price for ESPN West has been set but said it would be “a fair price.”

Asked why ESPN West’s launch would go any more smoothly than Fox Sports West 2’s, Bodenheimer said, “Our advantage is the ESPN brand name and what it means to consumers.”

To help fill out its programming lineup, Disney could eventually make ESPN West the exclusive carrier of Duck and Angel telecasts. The Ducks’ contract with Channel 9 is up after this season and the Angels’ deal with Channel 9 has two more years left.

But Don Corsini, vice president and general manager of Channel 9, doesn’t foresee the two Disney teams becoming cable exclusive.

“The smart thing would be to continue with a combination,” Corsini said. “If you put all your games on cable, you’re excluding 40% of the market that doesn’t have cable.”

A number of cable executives attending the Anaheim convention questioned the creation of ESPN West, wondering if there is room for yet another sports channel and also how ESPN could make it economically feasible.

One source said the Angels and Ducks, combined, are giving up about $8.5 million a year in local TV rights fees by leaving the Fox family. Add to that about $3.5 million in production costs, and ESPN West would need to bring in $11 million a year to break even.

Fox’s reaction to Wednesday’s announcement was certainly not one of surprise.

Kitty Cohen, vice president and general manager of Fox Sports West and West 2, said she first heard talk of ESPN’s plans to get into the regional sports network business at last year’s Anaheim cable convention.

It became obvious, she said, when the Ducks and Angels sued in an effort to get out of their Fox Sports West contracts in February. A settlement was reached last summer, freeing the Ducks to leave after this season and the Angels to leave after the 1998 season.

“We didn’t know the ESPN announcement would come during the cable show,” Cohen said, “but we knew it was coming.”

Cohen said she faxed one last offer to Disney Sports President Tony Tavares regarding the Angels and Ducks three months ago, but that offer was rejected.

Vince Wladika, vice president in charge of communications for all of Fox’s sports entities, said, “This is vindication for us. ESPN has always said that the regional sports network business is a losing business. Apparently, they don’t think that way now.”

However, Steve Bornstein, the president of ESPN, recently said, “We were interested in the regional sports business well before Fox. We just couldn’t come up with the right scenario.”

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CABLE WARRIORS

ESPN

Founded: 1979

Subscribers: 70 million

Channels:

ESPN

ESPN2

ESPNEWS

Classic Sports

ESPN International

*

Rights:

Ducks (1998-99)

Angels (1999)

FOX SPORTS NET

Founded: 1996

Subscribers: 58 million

*

Channels:

Fox Sports West

Fox Sports West 2

20 other affiliates

Rights: 68 pro teams with contracts averaging 7.2 years. In Southland: Lakers, Clippers, Kings, Ducks through ‘97-98, Dodgers, Angels through 1998. Also, USC and UCLA.