Come early March, “the worst-kept secret” in sports media evidently won’t be under wraps any longer.
That’s how News Corp. COO Chase Carey described the national sports cable service, dubbed Fox Sports 1, during the media giant’s second-quarter earnings call, which someday could become a rival to ESPN.
Now word is circulating that Fox Sports Media Group will host an upfront presentation to advertisers in New York during the first week of March, when it will detail the plans for Fox Sports 1, which will be converted from Speed Channel, and Fox Sports 2, which will take the mantle from action sports proponent Fuel. According to Reuters, the meeting will also delineate Fox’s plans for its 22 regional sports networks, as well as programming on Fox Broadcast, which next February will include Super Bowl XLVIII from New Jersey. Sources familiar with Fox's plans confirm the meeting's time frame.
A Fox Sports spokesman on Friday said “we’re still assessing how to best deploy our cable assets.”
That also figures to extend to a second, comedic-oriented version of FX that will be positioned in the spot, currently occupied by Fox Soccer Channel, which has lost key futbol properties. Details about the new comedy service, which would likely feature original It’s Always Sunny in Philadelphia, Archer and Anger Management, as well as acquired movies and sitcoms, and the original FX, which will continue to offer original series like Sons of Anarchy, Justified and The Americans, plus theatricals, are expected to be shared with media buying community in late March, according to B&C.
The Reuters' story indicates that the programmer is seeking a monthly subscriber fee for Fox Sports 1 in the 90 cents to $1 range. Speed and Fuel average 22 cents and 15 cents, respectively, according to SNL Kagan.
Fox Sports’ official declaration about a pair of new sports services, news of which surfaced last year, follows its second significant loss in the Los Angeles market: the Dodgers are looking to launch a regional sports network at the start of the 2014 Major League Baseball season with a distribution hand from Time Warner Cable. The complex deal, which has major revenue sharing implications, has yet to be approved by MLB. Fox’s RSN Prime Ticket, which offered a $6 billion long-term rights renewal, has been carrying the Dodgers since1997 and will conclude its current contract with the club at the end of the 2013 campaign.
TWC previously had wrested Los Angeles Lakers rights from FS West and had launched a pair of services around the storied NBA franchise, which is sagging this season.
Although the loss of the Dodgers, following the Lakers’ exit, certainly hurts Fox in the No. 2 DMA, there is no crying in baseball over rights and the programmer had already fortified its RSN roster elsewhere – seemingly at the expense of TWC, which still has to pay the programmer for its RSN duo in LA.
Late last year, Fox re-established itself the New York DMA by acquiring a 49% in YES Network in a deal that values the cable home to the New York Yankees and the NBA’s Brooklyn Nets at some $3 billion. YES also announced a new media rights deal to keep the Yankees on the network through 2042. The deal also paves a path for News Corp. to secure an 80% stake in YES after three years, based upon a $3.8 billion valuation for the RSN. YES, which reaches some 9 million subscribers in its TV territory, carries a roughly $3 per monthly subscriber fee. It is expected to look to increase that rate, with TWC -- which has an equity stake in SNY, the New York Mets’ RSN -- the major distributor within YES’s footprint.
Also late last year, Fox Sports Media Group paid a reported $235 million to purchase SportsTime Ohio, the cable home of the Cleveland Indians since 2006, as well as pay an annual rights fee of $40 million to the club. Before the team established its own network, the Tribe’s tilts had been carried locally by Fox Sports Ohio. TWC, which has a strong presence in Ohio, has been handling affiliate and ad sales for SportsTime Ohio.
TWC was also outbid in 2011 by Fox for the rights to San Diego Padres games that were previously held by Cox Communications, which has essentially exited the RSN business. After sitting out FS San Diego’s 2012 rookie season, TWC has yet to reach a carriage pact with Fox.
Earlier in 2011 with the Dodgers negotiations looming, Fox renewed its deal with the Angels for some $3 billion over 20 years. The deal ensured that FS West, which also televises Kings’ NHL games, had year-round live game programming. Contractually, Fox could possibly transfer some Angels games to Prime Ticket, following its Dodgers shutout.
Sources familiar with Fox’s strategy believe it will use some of the funds that had been allotted for the Dodgers to help launch the aforementioned new channels this year. The programmer is gearing up to converting the 82-million-home Speed into Fox Sports 1, whose lineup figures to MLB, UFC and college sports programming in addition to NASCAR and other motor sports, and Champions League soccer.
The new national sports networks, starting with the 2014 MLB season, also may also be able to televise games involving clubs that Fox's RSNs have rights contracts with it. For instance, an Angels-Detroit Tigers game slated for FS West and FS Detroit could air nationally as Fox holds the regional rights to both teams. Conversely, the deal would not apply to the Boston Red Sox (NESN) and Washington Nationals (MASN).
“News Corp., especially with the upcoming split of the company, has a lot going on. We can find plenty of uses for the $6 billion that was earmarked for the Dodgers,” a Fox insider recently commented.