FX, the 18-month-old basic cable network from Fox, is in flux. Both staffers and cable industry execs are expecting dramatic changes.
“There are a lot of rumors floating around,” acknowledges an FX insider. “Nobody here knows what is happening and that is the bottom line.”
FX has in effect become a pawn in a much larger game of chess played by FX parent News Corp. and TeleCommunications Inc.’s programming arm Liberty Media.
Liberty and News Corp. recently formed a global sports alliance to challenge CapCities/ABC’s ESPN franchise worldwide. Besides using the numerous Liberty-owned regional sports networks, the partnership plans to make FX a major part of the alliance.
In the release announcing the alliance between Liberty and News Corp., the partners said that FX would be “transformed into a nationally distributed, general entertainment and sports network.”
In short, FX already has the entertainment; how it will incorporate the sports – and how much it will have to incorporate – is the key question.
FX will start carrying baseball in 1997. It also may start carrying other sports including the National Hockey League, to which Fox Broadcasting has the rights. The network could also end up carrying some regional sports programming as part of the joint venture.
Under the Fox-TCI global sports partnership, a board made up of Liberty Media and Fox execs now oversees FX. Principal decision makers are Fox Television chairman and CEO Chase Carey and Liberty Media president and CEO Peter Barton. Fox Sports president David Hill is CEO of the new venture while FX CEO Anne Sweeney, who used to report directly to Carey, now reports to the board, along with Hill. Currently, FX reaches about 25 million subscribers at a price tag of 250 per subscriber. That price tag, one of the higher ones among basic cable networks, has kept many major cable operators from rolling out the service on many of their systems.
TCI is FX’s biggest customer, carrying the service on systems reaching 9 million homes. To break even, most cable networks need to reach a minimum of 30 million homes. Fox paid $350 million to Liberty as part of the alliance.
FX sold itself as a general entertainment service with its mix of original programming and off-network fare. Of particular concern to cable operators is what the relationship will be between FX and the numerous regional sports channels owned by Liberty Media when they are all under one roof.
Right now, FX’s programming is a combination of quirky original programming such as “Breakfast Time,” “Personal FX – The Collectibles Show,” and “The Pet Department” during much of the day, followed by old reruns. As of late, FX has opened up its wallet to acquire off-network episodes of “Picket Fences” and “NYPD Blue” from sister division Twentieth Television. It is also expected to acquire the “The X-Files” from Twentieth as well, although there might be a weekend window for broadcast syndication.
Sweeney, whose web was barraged with questions about its future from cable operators at the Western Cable Show two weeks ago, says FX is “evolving.”
“What we pitched to operators was distinctive original programming, high-quality acquisitions and sports. We are delivering big-time,” she says. As for how much sports, Sweeney says the network does not know yet. “We’re talking about everything.”
Liberty’s Barton promises change for the network, although he declines specifics.
But Barton did indicate that the current mix of original programming and older off-network fare would change.
“We’re considering what the mix of programming should be. Our objectives are to take FX into the category of having at least excellent or must-watch programming. This is not a unilateral call by me.”
Asked what he thought of FX’s current programming mix, Barton says, “It’s irrelevant. It will have a different voice than the current service and obviously we intend to have a compelling voice.”
Cable operators are watching FX closely: Those that don’t carry the network would likely be more interested if it had a heavy load of sports, while those that do carry the service are nervous about an overhaul that may go against what the network was originally supposed to be.
“If the model is USA Network or TNT, then it would probably be consistent with what they sold us,” says one major cable operator. “However, if it is anything close to a regional sports channel or a network with a strong load of secondary sports, then it is totally out of bounds. If TCI and Fox think that is what they will create, then they’ll have a revolution on their hands.”
Another cable operator says that the suspicion is that FX will gut all its original programming with the possible exception of “Breakfast Time,” which could go into syndication.
That is not pleasing to many of FX’s cable customers, especially since the network promised operators at least seven hours of original programming daily. If there are dramatic changes at FX, the network could be in violation of its carriage agreement with cable operators.
Sweeney says she understands the concerns of operators, but adds that “they have to understand the huge commitment being made to this network by both companies and that the alliance is a strong sign to the industry that not just one, but two companies are serious about the success of FX.”
Barton has as much riding on the venture as Fox. With Time Warner acquiring Turner Broadcasting, Liberty Media and TCI’s role in Ted Turner’s company – where Barton was a board member – will diminish greatly. The regional sports networks that had reported to him now report to the committee as part of the alliance, and Home Shopping Network is now under Barry Diller’s control.
Observers close to Barton and Carey say the two get along well and are in sync on many issues regarding the partnership.
The question is whether FX and the rest of the cable industry will also be in sync.
“It is clear that there are negotiations going on internally,” said one observer. “It’s a little unsettling, since it’s a couple of big jocks (Liberty and News Corp.) calling the shots.”
