Could Fox make ESPN fumble the football?

Cablers may unite to nab NFL games

The sports biz is tossing around a storyline that pits Walt Disney’s ESPN against the potent combination of Rupert Murdoch’s FX and Brian Roberts’ Comcast.

The plot centers on rights to the lucrative Sunday-night cable package of NFL games.

Wall Street analysts, staying alert to backstage rumblings at Fox and Comcast, started the buzz earlier this year, and sports mavens like Dean Bonham, head of the sports marketing firm Bonham Group, have eagerly joined in the speculation.

Outbidding ESPN for the NFL “makes a lot of sense for Comcast and Fox,” Bonham says. “Such a deal smacks of sound logic and strategic planning. And the NFL would love to ignite a bidding war over its Sunday-night games.”

The motivation of Fox to strip ESPN of the NFL is fairly straightforward: Getting access to the Sunday-night games would catapult FX into the elite of basic-cable networks, both in the money it charges cable operators and the revenue it harvests from advertisers.

Every year, the highest-rated individual shows in basic cable are the primetime NFL games on ESPN. In 2002, for instance, 16 of the 17 highest-rated programs in basic cable were ESPN’s coverage of an NFL game.

FX could bombard the huge audience drawn to exclusive NFL games with promos for its attention-getting original series like “The Shield” and “Nip/Tuck” and for its primetime movies.

But Comcast and Fox Sports both say they haven’t discussed making a bid for the NFL Sunday offering.

“It’s something we’ve given no thought or planning to,” says Peter Chernin, president and CEO of the Fox Entertainment Group.

But David Carter, a principal in the Sports Business Group, points to history as to why Fox may soon sing a different tune. He says FX is acutely aware of the giant leap taken by its sister Fox Network in 1993 when Fox, for the first time ever, outbid CBS for the NFC portion of the Sunday-afternoon games.

Fox, armed with its NFL contract, mounted an all-out propaganda blitz on the TV stations in NFL markets affiliated with CBS.

As for Comcast, Larry Gerbrandt, chief content officer of Kagan World Media, says “Comcast is tired of being held hostage to whatever Disney decides to do in raising its rates to cable operators.”

Kagan’s numbers show that ESPN has more than doubled its combined revenues from cable systems and the satellite distributors DirecTV and Echostar in the last four years, to a projected $1.8 billion in 2003. ESPN is the most expensive cabler in the business, leaving TNT a far-distant second, at $1.03 billion.

If ESPN lost the NFL games beginning in 2006, cable operators, led by Comcast, would get their hands on a powerful weapon to wield against the network, to use not only in putting a stop to the 20% annual increases but in seeking to roll back what ESPN already charges.

Neal Pilson , head of Pilson Communications and former president of CBS Sports, says Comcast is also gung-ho about local sports, a philosophy that has pushed it to start talks with Cablevision to buy its stake in regional sports networks in New England, Chicago, San Francisco, Ohio and Florida.

Since Cablevision’s partner in these networks is Fox Sports, Comcast would, as Pilson puts it, “create an allegiance with Fox” that could lead to the NFL Sunday-primetime strategy.

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