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Cable Programmers Talking Sports Deals

Carey: Fox Sports 1 is 'World's Worst Kept Secret' 2/10/2013 7:00 PM Eastern

Sports rights and costs were top of mind as three of the largest cable programmers reported earnings last week, with News Corp. finally conceding plans to launch a rival national sports network to ESPN.

News Corp. chief operating officer Chase Carey called his company’s plans to launch an ESPN rival — tentatively called Fox Sports 1 — the “world’s worst kept secret.”

News Corp. has been heavily investing in sports programming, particularly in regional sports networks — it purchased a 49% interest in the Yankees Entertainment & Sports Network in November, and one month later bought SportsTime Ohio, the home of baseball’s Cleveland Indians.

Carey paid some notice to the deal News Corp. didn’t get — rights to Los Angeles Dodgers games, which are reportedly part of a new RSN that will be distributed by Time Warner Cable. Carey said on the call that the Dodgers rights were “too rich for our blood” (Time Warner Cable reportedly paid between $7 billion and $8 billion to distribute the team’s RSN for 25 years), but Carey said Fox’s existing RSNs in the Los Angeles market remain strong.

“We have a strong Southern California RSN with four great pro teams without the Dodgers, and our overall RSN portfolio is materially stronger than it has ever been,” Carey said of the networks, Fox Sports West and Prime Ticket.

Sources indicated that more details about Fox Sports 1, which will be converted from Speed Channel, and Fox Sports 2, taking the mantle from action sports service Fuel, will be officially revealed during a comprehensive upfront presentation from Fox Sports Media Group in New York during the first week in March. The new networks are expected to kick off in August.

The Walt Disney Co. chairman and CEO Bob Iger did not directly address Fox Sports 1 on his company’s earnings call last week. But he did take some time to note that ESPN provides 30,000 hours of live events, news and original shows per year to distributors and tallies ratings that are twice that of all RSNs combined.

“ESPN delivers incomparable value to multichannel operators, as well as consumers,” Iger said on the call. “And with long-term sports rights now locked in, we expect ESPN to remain the must-have brand for sports fans.”

Time Warner Inc. chairman and CEO Jeff Bewkes, meanwhile, said his company has no plans to create a national sports network.

Time Warner, through its Turner Broadcasting System networks, has the second-largest collection of national sports rights behind ESPN. And while that programming — including the National Basketball Association and the NCAA Men’s Basketball Tournament — has performed well, there are no plans to expand into a separate national sports channel.

“We’ll continue to evaluate potential opportunities in the future, but we will do that basically in the framework of our current existing networks, not as a startup of standalone sports networks.”

Instead, Time Warner will focus on its cable networks and original programming. Bewkes said the company would increase the number of originals on TNT and TBS by more than 40% in 2013.

TAKEAWAY

News Corp. confirmed it will launch Fox Sports 1 in competition with ESPN, but Turner has no plans to follow suit with an all-sports channel.