Fox Sports Net last week extinguished the flames from yet another potential regional sports network competitor, but industry observers said the heat from a tumultuous two years of team-owned and MSO-backed sports network launches have forever scorched the traditional landscape.
Fox Sports Net Southwest finalized new affiliation deals with Major League Baseball’s Houston Astros and the National Basketball Association’s Houston Rockets, effectively finishing the teams’ threat of launching a competitive regional sports network in the market. The pact also ends a legal effort by the Astros to get out of its current deal with FSN a year earlier than its 2006 expiration date.
Terms of the deal were not disclosed, but the Houston Chronicle reports that Fox could pay upward of $600 million over the life of the multi-year agreement. The agreement calls for Fox to telecast 156 Astros games beginning next season and all 82 regular-season Rockets games per season. The Rockets haven’t been in the FSN stable since 2002.
MORE GAMES FEATURED
FSN president Robert Thompson, speaking last week at a SportsBusiness Journal Sports Media and Technology conference in New York, said FSN Southwest will feature more Rockets and Astros games than at any time in its history, a schedule that can help recoup some of the deal’s costs through additional advertising and eventually increased licensing fees.
But in a letter sent to affiliates last week, the network said it reserves the right to either increase its current rate card fee or impose a surcharge for the additional Astros and Rockets games beginning next spring, said Fox Cable’s executive vice president of affiliate sales and marketing Lindsay Gardner.
The Astros and Rockets contracts follow on the heels of FSN Southwest and FSN South’s agreement to air Memphis Grizzlies NBA games reached two weeks ago. The agreement quelled plans for a stand-alone Grizzlies sports network.
Thompson, told Multichannel News after the conference that Fox Sports Net will stay aggressive in keeping pro sports rights in house, but denied that it has a “mandate” to renew expiring sports network rights deals at whatever cost going forward.
FSN has suffered several pro team defections from its family of regional networks this year alone. In October, basketball’s Denver Nuggets and the National Hockey League’s Denver Avalanche launched Altitude Sports and Entertainment Network after leaving FSN Rocky Mountain, while four pro teams defected from FSN Chicago and teamed with Comcast Corp. to launch a regional there.
Comcast also paired with basketball’s Sacramento Kings last month to launch a new RSN in California. In Charlotte, N.C., basketball’s expansion Charlotte Bobcats franchise bypassed Fox Sports South and launched Carolinas Sports Entertainment Television.
C-SET president and Black Entertainment Television founder Robert Johnson said the cable-exclusive network has “sufficient” carriage on Time Warner Cable’s digital sports tiers, which represent about 600,000 of the MSO’s 1.7 million subscribers across North Carolina and South Carolina.
But several sports executives questioned the viability of such a strategy. “To limit distribution doesn’t do the franchise any good,” said New England Sports Network president Sean McGrail, whose company signed a 10-year extension with Comcast in New England.
MSO COMPETITORS WELCOME
Industry executives speaking at the conference said that the regional sports network arena is no longer the province of Fox Sports, but going forward will include both team-owned and MSO-backed sports networks. But Thompson said he actually welcomed the competition.
“I like to see it because if Comcast is out there running up the price of some of these sports properties, it basically tells me maybe I am not charging them enough,” Thompson said. “If they see that much value in it and I go out and get the deal, it’s sort of difficult for them to turn around and say, 'You’re asking too much money.’”
Comcast isn’t the only MSO to enter the arena: Cox Communications Inc. is operating an RSN in New Orleans, while Time Warner Cable has teamed with Comcast and the MLB’s New York Mets to launch a service in the New York DMA in 2006.
But Time Warner doesn’t appear ready to be a major player. Time Warner senior vice president of programming Fred Dressler, who called the Mets’ network a “one-off,” said the MSO wasn’t approached by the Rockets or Astros to get involved with their proposed service. When asked during the conference about the possibility of launching dedicated-team channels where Time Warner has a major cable presence, like Comcast has with the NFL’s Dallas Cowboys, said his company would take a wait-and-see approach: “I don’t know the business or revenue models. I’m happy to copy it if it works.”
Mike Reynolds contributed to this story.