So it’s simply News Corp. company logic that Fox Sports 1, the new national sports network officially unveiled at a Fox Sports Media Group upfront gathering on Tuesday, will stick it to ESPN in some bruising fashion over the coming decade — while reaping rewards for Rupert Murdoch and friends.
Fox is under no illusion that it will send the Disney-owned “Worldwide Leader in Sports” into oblivion. However, by taking over access on Aug. 17 to the 90 million households that niche auto-racing channel Speed reaches — and with major deals in sports including Major League Baseball, NASCAR, soccer, the UFC, college football and college basketball already in place — Fox Sports 1 is arguably better positioned than either of its broadcast or news siblings were years ago to make an impact.
“Fans are ready for an alternative to the establishment,” said Fox Sports Media Group co-prexy/COO Eric Shanks, “and our goal for FS1 is to provide the best in-game experience possible, complemented by informative news, entertaining studio shows and provocative original programming.”
Shanks noted that FS1 will “already have the home-team advantage of significant audiences watching local games on our 22 regional sports networks as a platform.”
Timed to the launch of the channel will be the introduction of mobile app Fox Sports Go, which will offer more than 1,000 live events to subscribers of participating cable, satellite and telco providers at no additional cost.
The new network became official in blaze of blue and orange strobe lights, confetti and smoke at the 1,600-seat Marquis Theater in Times Square. Goofy videos of partying Fox execs and Mike Tyson playing the harp alternated with inspirational sports montages. Regis Philbin yukked it up with Terry Bradshaw. Fox Sports studio host Erin Andrews interviewed an ersatz audience member who demanded to know when “Evita” was starting. (The Ricky Martin starrer just closed.)
The venue was pretty much full, a testament to the drawing power of Fox, considering that the channel has been an open secret for the better part of a year and many media buyers more or less knew what they were in for.
“Yeah. It looks good. We’re already seen the programming, “ said one on the way out. Two others nodded.
David Hill, chairman-CEO of Fox Sports Media Group, introduced in voiceover as “the godfather of Fox Sports,” took the stage first, noting that Fox’s foray into sports is coming up on its 20th anniversary and has established itself a pillar of the company alongside the broadcast and news divisions.
News Corp. chairman Murdoch, COO Chase Carey, deputy COO James Murdoch and Fox Networks Group CEO Peter Rice were in the audience but didn’t take the stage. Earlier in the day, Carey talked up the network to investors at a conference in Florida, saying it would be a multibillion-dollar asset in three to five years. (News Corp. shares hit a 52-week high Tuesday, closing up 2.41% at $30.57.)
“We are not trying to beat ESPN,” Carey said. “Sports is a big, huge arena. We’ve proven we can do some interesting and exciting things. We can enlarge the category and bring a new dimension to it. The key to success for us is to build an attractive business that resonates with consumers.”
Among the live-event programming highlights for FS1 will be:
— MLB regular-season games on 26 Saturdays beginning in 2014, along with select playoff games that will have the dual benefit of drawing viewers to the sports network while easing the scheduling burden on big Fox’s primetime sked. (Fox enabled this in October with its extension of its MLB rights deal through 2021.)
— Primetime college basketball games on Mondays and Thursdays, as well as weekend coverage of Big 12, Pac 12 and Conference USA action.
— Primetime college football from those three conferences on Thursdays and Saturdays, the latter the climax of triple- or even quadruple-headers, along with conference championship games in the Big 10 and Pac 12 and marquee interconference games including Notre Dame at Stanford.
— Select NASCAR events including Sprint Cup series races as soon as 2015.
— Soccer games including weekday afternoon coverage of the UEFA Champions League and Europa League and CONCACAF Champions League, as well as FIFA Women’s World Cup coverage in 2015 and 2019 and FIFA Men’s World Cup in 2018 and 2022. (Popular sportscaster Gus Johnson will become the voice of Fox’s World Cup coverage.)
— UFC events featured on Wednesdays, as well as one the night of FS1’s launch (which comes on a Saturday).
“As a company, we haven’t been afraid to innovate and take well-calculated risks,” added Fox Sports Media Group co-prexy/COO Randy Freer. “We’ve devoted significant resources over the last few years to acquire and/or extend multiplatform rights with a wide variety of leagues and governing bodies well into the next decade, enough to give us a rich schedule right out of the box.”
To complement its live events and studio programs, FS1 will introduce recurring sports news program “Fox Sports Live,” which will air on a frequent basis, most notably in a daily program that will air at 11 p.m. Eastern or immediately after live events.
“Building credibility and trust with our audience is paramount, so naturally we’ll provide the staples, like news, scores and highlights, but we’ll do it in a Fox Sports way,” Shanks said. “Just as ‘Fox NFL Sunday’ reinvented the pregame show, ‘Fox Sports Live’ breaks new ground in the way sports news is presented.”
In addition, FS1 will launch a morning sportscast in January, as Fox gears up to cover Super Bowl XLVIII on Feb. 2. The week leading up to the NFL title tilt will be a critical one for promoting the new network and will include an entertainment-laden “Super Bowl Bash” live from Times Square on the preceding Tuesday.
FS1 is also planning several original programs, including the “Rush Hour” talkshow that will be hosted by Regis Philbin and air weekdays at 5 p.m. Eastern. Also in the works are “Fox Football Daily,” a weekday extension of “Fox NFL Sunday,” and a continuation of the Fox Sports documentary series “Being:” that will be led off in the fall with a chapter focusing on boxer Mike Tyson.
Fox told advertisers at the upfront that it plans to continue its use of the double-box commercial format, citing such statistical reports as one from IAG that credited the approach with a 62% increase in brand recall.
Prior to Tuesday, Credit Suisse analyst Michael Senno predicted that News Corp. will negotiate about $1.25 per subscriber for Fox Sports, although he expects it to push hard for more. A long-term target, he said, could be the $2.50 a month commanded by regional sports networks.
ESPN, in comparison, takes in over $5 per sub — tops among all cable networks. Michael Nathanson of Nomura Securities called the Disney net “well protected for many years thanks to both its long-term affiliate fee deals, which will be all done by the end of 2014, as well as almost all major sports rights locked up well into the next decade.”
Even in the best-case scenario, Nathanson calculated, News Corp.’s affiliate fees from these new national sports networks would still be only roughly a quarter of what he estimates ESPN makes today from affiliate fees — not even enough to pay for ESPN’s NFL package alone.
Nonetheless, it’s hard to argue with the potential rewards for Fox, which according to Senno has drawn 26¢ per Speed subscriber. Given the remaining possibility that sister network Fuel will be converted into a Fox Sports 2 channel, Senno calculated 2015 affiliate fees for Fox Sports of $1.4 billion and advertising sales of more than $600 million.
That comes to total revenue of $2.1 billion and earnings of about $700 million, compared with a projected $470 million in revenue and $160 million in earnings for a combined Speed/Fuel the same year.