Carey: National Sports Net Could Be ‘Cornerstone’ For Fox

But Says Channel Will Likely Lose Money Initially as it ‘Ramps Up’ Rates
By: Mike Farrell Mar 5 2013 - 2:12pm
But Says Channel Will Likely Lose Money Initially as it ‘Ramps Up’ Rates

The worst kept secret in television – News Corp.’s plans to launch a national rival to sports juggernaut ESPN –  could be a “cornerstone” network for the media giant, generating billions of dollars of revenue in the next three-to-five years, News’ chief operating officer Chase Carey said at an industry conference today.

While Carey said the channel – tentatively titled Fox Sports 1 – will likely lose money in its first years even as distributors pony up more money for the channels it is replacing, News Corp. chief operating officer Chase Carey said at an industry event Tuesday.

Fox Sports is expected to unveil Fox Sports 1 at an upfront presentation later today. At the Deutsche Bank Media, Internet and Telecom conference in Palm Beach. Fla., earlier today, Carey said that News will make a “manageable investment” in the channel.

Fox Sports 1 is expected to replace News Corp.’s existing Speed channel , which Carey said would give the network full distribution from the outset, rare in the launch of a new channel.

“There will be some losses we incur as we ramp up the rates with it,” Carey said at the conference. “Nothing close to what it would be if we started from scratch.”

According to SNL Kagan, Speed currently charges about 22 cents per subscriber per month, while ESPN charges about $5.26.

Carey added that the goal is not to beat ESPN, but to broaden the category.

“We’re not trying to beat ESPN, that wouldn’t make sense,” Carey said. “Sports  is a huge arena. We’ve proven in Fox Sports that we can do some interesting and exciting things we know how to take these rights, we know  how to put things around these rights. We know how to produce sports that will excite and interest people. We think this is an arena that has a lot of room in it. We think it certainly has room for us to create a really exciting business.”  

Carey added that due to the sports relationships of its other networks, Fox Sports 1 would have ample access to professional baseball, World Cup soccer, UFC and college football and basketball games. But he said the programming around those games could be the key to success for the fledgling channel.

“We have an array of rights that didn’t reside anywhere in the Fox family,” Carey said. “It’s about more than rights. The most valuable franchise in ESPN is Sports Center. A 24/7 network is not simply a redistributor of [games], the heart of your programming is the events you put on, but the value-added is how you create a 24/7 network in the sports world that is interesting to the consumers out there. Our real job and challenge is to put together the right portfolio of rights first and to have dimensions of that that really resonate with consumers.”