NEW YORK — Fox Liberty Sports is negotiating to buy a 35% stake in two 24-hour cable sports networks, Speedvision and Outdoor Life, for about $100 million.
Sources say Fox Liberty could make the purchase from the three existing owners — Cox Communications, Media One (formerly Continental Cablevision) and Comcast — this week.
Under the new ownership, Fox Liberty and Cox would each end up with 35%, and Media One and Comcast would divide the remaining 30%, with Cox continuing its role as the managing partner, according to one insider. A clause in the contract, this source says, would allow Fox Liberty to increase its percentage to majority ownership within the next four years.
Cable-network sources say ESPN and CBS both looked at buying a stake in Speedvision and Outdoor Life but objected to keeping majority ownership in Cox’s hands for as long as four years.
Subscriber increase expected
Speedvision and Outdoor Life have failed to harvest many subscribers outside of the cable systems owned by Cox, Media One and Comcast. One reason for this underperformance, according to outside cable operators, is that each network was asking too much money in license fees for the ratings it was delivering. For example, each of the two is asking a monthly fee of 14¢ a subscriber, which would climb — in yearly increases — up to 25¢ over four years. So a 1 million-subscriber cable operator would have to shell out $1.5 million for each network in the first year, jumping each year to top out at close to $3 million by year four.
It was unclear at press time whether TCI (Tele-Communications Inc.), the second-largest cable operator in the U.S., which is half-owner of Fox Liberty Sports, would be willing to roll out the two networks aggressively as part of the deal.
TCI has a spotty track record at clearing cable systems that it owns a piece of, moving slowly with Court TV and the Cartoon Network, and speedily with Animal Planet and QVC.
Big ticket deal
One of the reasons Fox Liberty became interested in Speedvision, sources say, is that it wants to get the Winston Cup Race and other Nascar events for the Fox Broadcasting network, but couldn’t justify paying the high price that ESPN and the Nashville Network were willing to pay for entire packages of race-car events.
But with Speedvision as an outlet for the qualifying events leading up to the main event that would run on the broadcast network, Fox is expected to bid up the prices for Nascar races over the next few years.
Counting satellite distributors like DirecTV and Primestar, Speedvision claims a subscriber base of 14.5 million and Outdoor Life says it has 13.5 million.