News Corp. unveils long-anticipated Fox Sports cable channel
In the latest sign of how valuable the media industry considers sports programming, News Corp. on Tuesday unveiled plans for Fox Sports 1, a new national cable channel it hopes will eventually challenge Walt Disney Co.'s ESPN empire.
Scheduled to launch in mid-August in almost 90 million homes, the channel’s initial lineup is to include NASCAR, college football and basketball, ultimate fighting and soccer. Next year, Fox Sports 1 is to add regular-season and postseason Major League Baseball to its lineup.
“We really feel we have the ammunition to launch a channel right out of the gate that will be substantial,” said Bill Wanger, a Fox Sports executive vice president. The channel was presented to advertisers at an event in New York.
Wanger said Fox Sports is already eying rights to the National Basketball Assn. and is ready to pounce should the National Football League go forward with creating an additional package of games for cable.
In an era when viewers have literally hundreds of networks to choose from and can use digital video recorders and video-on-demand as well as newer services such as Netflix to watch TV on their terms, sports has been seen as the one form of programming that can stand up to technology.
“Sports programming is one of the last media assets predominately viewed on a live basis,” Goldman Sachs said in a recent report on the sports media landscape. That means it has greater value to advertisers, who place a premium on viewers watching live television versus recordings -- where it is easy to skip commercials.
Although Fox Sports 1 isn’t scheduled to make its launch for almost six months, News Corp. already has a second channel -- Fox Sports 2 -- in the works. Though Wanger declined to comment on Fox Sports 2, Goldman Sachs said News Corp. filed a trademark for Fox Sports 2 with the U.S. Patent and Trademark Office.
News Corp. is already a major player in sports. It owns almost two dozen regional sports networks, including Prime Ticket and Fox Sports West in Los Angeles, and its Fox network carries baseball and football.
But taking on ESPN won’t be easy. Besides having a more than 30-year head start and rights to just about every major sports property, it owns several channels and has deep enough pockets to withstand any bidding wars for sports properties.
“We like our position,” said ESPN Senior Vice President Chris LaPlaca. “We have always had vigorous competition, so there is really nothing substantially new here.”
Indeed, while ESPN won’t take Fox Sports 1 lightly, the outlets that will be more immediately concerned about News Corp.'s entry into the national cable television marketplace are Comcast’s NBC Sports Network and the CBS Sports Network, a unit of CBS Corp.
Neither NBC Sports Network nor CBS Sports Network have emerged as a real threat to ESPN, and now Fox Sports 1 is poised to become No. 2 when it flips the switch on Aug. 17.
The college and professional sports worlds will be cheering the emergence of one and possibly two new national cable channels from News Corp., as that will mean increased competition for content and higher rights fees.
But for pay-TV subscribers, more sports channels typically means bigger monthly bills. The flagship ESPN channel is the most expensive cable network in the industry, costing distributors on average north of $5 a month per-subscriber. Its various sister channels, including ESPN2, take in another $1.60 a month, per-subscriber.
Local sports channels are just as expensive. Time Warner Cable launched a sports network for the Lakers in Los Angeles that costs close to $4 a month per-subscriber, and is partnering with the Dodgers on a new L.A. channel that is expected to cost even more.
Sports, Goldman Sachs said, are approaching 50% of total programming costs for pay-TV companies. Some companies -- including satellite broadcaster DirecTV -- have already instituted a sports surcharge of a couple of dollars per month to their subscribers.
Wanger said popular TV host Regis Philbin would join Fox Sports 1 to host a daily talk show about sports. Terry Bradshaw, a host of Fox’s NFL coverage on its broadcast network, will have a daily show about football, he said.
Fox Sports will also use a documentary unit to profile famous and controversial athletes and events. ESPN has had tremendous creative and commercial success with its documentaries.
To launch Fox Sports 1, News Corp. is rebranding its current Speed Channel, which will not return. Fox Sports 2 will likely take up real estate currently occupied by the company’s channel Fuel. Another channel, Fox Soccer, is also expected to go away and be born again as an entertainment network.
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