Fox has the best chance of challenging ESPN, but it has a long, uphill climb
Fox ruined the worst kept secret in sports television on Tuesday, announcing plans for a national sports network that launches Aug. 17. News Corp. COO Chase Carey said the key to the new cable network was to “not try to beat ESPN,” but the million-dollar question remains: What does Fox Sports 1 have to do to rival the worldwide leader in sports?
ESPN is the 800-pound gorilla of the sports media world, one of the most profitable networks on TV and one of the most successful media companies of the last quarter century. Fox Sports 1 has a chance to do the unthinkable: upset the balance of power.
It has the money and support of parent company News Corp., which has helped use the NFL and other sports rights to turn its broadcast network into an equal of CBS, NBC and ABC.
Fox shocked the sports world in 1993, acquiring the rights to NFL games and luring top broadcasters, such as John Madden and Pat Summerall, from CBS.
Sensing that soccer is finally ready for prime time in the United States, it outbid ESPN and others for the rights to soccer's premier events, the 2018 and 2022 World Cup. Many of those games can now appear on Fox Sports 1.
"If there's one thing [News Corp. CEO] Rupert Murdoch has proven over time it's that he understands the value of content better than perhaps anyone else in the history of the media business," Scott Rosner of the Wharton Sports Business Initiative told TheWrap. "He also understands there's not content considered must-have like sports content. That strategy has worked time and time again. There's no reason to think it shouldn't here."
Fox also has an advantage that no previous challenger has had before — broadcast rights.
The biggest arms race in television is bidding for the rights to broadcast major sporting events, be it the World Cup, the Olympics or the NFL. Rights have soared into the billions with every network shelling out at least $1 billion a year to air NFL games.
ESPN still holds the most cards, from its ownership of Monday Night Football and NBA rights to college football's BCS Championship Game and Big East basketball.
CBS and NBC relaunched nationwide sports cable networks in 2011, the CBS Sports Network and NBC Sports Network. These networks are not failures, but they lack the marquee programming needed to lure a huge audience.
NBC Sports Network's main offering is NHL hockey, a popular but not nationally beloved sport, while CBS Sports Network has had to make do with college sports and niche pro sports like lacrosse and arena football. Turner Sports has rights to high-profile sports like the NBA, MLB and college basketball, but it has no dedicated network.
Fox jumps out of the gate with rights to major events, such as college football, college basketball, NASCAR, soccer and the Ultimate Fighting Championship. In 2014, the MLB, including playoff games, will arrive as well.
But Fox still has what many generously describe as a long, uphill climb.
The new network must contend with a competitor that does not just hold rights to more sporting events but has a hugely popular website (espn.com), an array of mobile offerings, a national radio network and the most popular entertainment programming in sports.
While Monday Night Football and the BCS Championship Game bring in the most viewers, ESPN shows like “Sports Center” and “Pardon the Interruption” keep those viewers coming back throughout the day. ESPN has also turned pre-game programming into entertainment, from its hugely successful "College GameDay" on Saturday before college football to "Sunday NFL Countdown."
“To distinguish themselves from CBS and NBC, the one thing they need to do is create original programming that is news and entertainment oriented,” Dan Durbin, director of USC's Annenberg Institute of Sports, Media and Society, said of Fox. “ESPN has set its mark with Sports Center. They put on sports, but everything else is some form of entertainment.”
Yet, Durbin pointed out, Fox was a pioneer in this very field. Executives David Hill and Ed Goren tried to make sports entertaining to non-sports fans in the 1990s, turning their Sunday NFL pregame show into a lively talk show, revolutionizing on-screen graphics with the FoxBox and creating now defunct comedy shows like "The Best Damn Sports Show Period."
“Fox showed they have ability to create original entertainment programming,” Durbin said. “But they’re going to have to expand that greatly.”
Fox knows this and has already announced that Regis Philbin will have a daytime talk show. Fox will also launch a daily football show, an extension of its popular Sunday pregame show featuring the likes of Terry Bradshaw, Howie Long and Erin Andrews.
“Fans are ready for an alternative to the establishment,” Fox Sports Media Group Co-President and COO Eric Shanks said in a statement, “and our goal for FS1 is to provide the best in-game experience possible, complemented by informative news, entertaining studio shows and provocative original programming.”
The bigger issues for Fox are time and economics. ESPN has been at more than 30 years. While the network was a wreck for its first few years of existence, as deliciously described in Tom Shales and James Andrew Miller's recent oral history "Those Guys Have All the Fun," it has spent decades since engendering the loyalty of sports fans. It also has used that position to lure top talent, including a who's who of former players and top flight journalists.
Indeed, ESPN has turned that loyalty into profit. Every cable subscriber pays $5.15 a month for ESPN and its various channels, the highest fee in cable. Fox Sports 1 will replace Fox's Speed Channel, which gets 22 cents a month.
While viewership of major sporting events should push that figure upward, it will take time.
"ESPN not only has the programming but the benefit that subscriber fees provide as a moat to protect them from the competition," Ed Desser, president of sports media consultancy Desser Sports Media, told TheWrap. "I don't see Fox being able to meaningfully compete with ESPN in the foreseeable future."
As for ESPN, the network seems undaunted by a new player: "We like our position. We have always had vigorous competition, so there is really nothing substantially new here. Others are, however, beginning to recognize what we have long known: the power of live sports, especially in light of technological advances, is substantial and brings tremendous value in today's entertainment landscape."
Yet there are also a few things that could tilt in Fox's favor.
Most major rights are locked up for the foreseeable future, but the next available are one-half of NASCAR — Fox already has the other half locked up while Turner and ESPN split the rest until 2014 — and the NBA, whose broadcast contracts expire after the 2015-2016 season. While ESPN has been the NBA's partner for a decade, there's also the possibility of more football.
"The NFL right now is the dividing point for content in the U.S. market," Durbin said. "If you have the NFL, it justifies you. if you don't, you're chasing. The NFL still has not saturated the market and there may be a point in the future where they have something going every night from Thursday to Monday. For Fox Sports 1, that would give them a major card."
And then there's Fox's one trump card.
While ESPN has some of the media worls' most potent marketing campaigns, Fox has a unique corporate infrastructure to market and promote Fox Sports 1. In addition to its broadcast network and cable channels likes FX and Fox News, Fox boasts 22 regional sports networks that hold the broadcast rights to more than half of the teams in the NBA, NHL and MLB.
Broadcasts of those sporting events can feed right into FS 1’s planned news show at 11 p.m.
“Fox has all these regional sports networks that Disney doesn’t have,” Brad Adgate, SVP of research at Horizon Media told TheWrap. “I’m curious to see how much Fox leverages them. This is the most serious challenge to ESPN, which hasn’t had too many serious challenges.”