SBD/August 14, 2013/Media

Fox Sports Views Now As Perfect Time To Launch FS1, FS2 Despite Inherent Risks

Shanks said Fox needed a national, multi-sport channel to make its properties work
Fox Sports Media Group is taking a big step in launching FS1 and FS2, but it "would be more nerve-wracking not to" start the channels, because there is the "fear of missing out on the next wave of sports entertainment revenue, this era’s version of a television gold rush," according to a cover story by Jon Weisman of VARIETY. Fox Sports co-President & co-COO Eric Shanks said, "It’s scary, right? It’s a big endeavor; it’s a big investment by the company. And so even though this is a mature market and there’s a lot of competition, it just feels like a very Fox thing to do." Analysts, while "cognizant of concern over the rising costs associated with televised sports, believe Fox has its ducks in a row, with little to lose and much to gain." RBC Capital Markets Managing Dir David Bank said, "It’s about as risk-mitigated as it possibly could be." Shanks added, "It became pretty clear when we were starting to look at things like college football and baseball, that you weren’t doing anybody any favors by having some stuff on FX, some stuff on [Fox] Soccer (which will become entertainment network FXX in September). We really needed a national, multi-sport channel to kind of make it all work together." However, many believe that Fox Sports "won’t compete with ESPN until it can bring the NFL to one of its cable channels" (VARIETY,  8/13 issue).

IN IT FOR THE LONG HAUL: In Chicago, Ed Sherman writes FS1's upcoming launch is a "long-term play" for Fox. For all its "bravado about being the upstart daring to take on the ESPN giant, Fox Sports 1 is realistic about what will happen when it flips the switch on Saturday." FSMG Exec VP/Programming & Research Bill Wanger said, "I've always said our success is going to be judged by years, not days and months. Quite frankly, our ratings are going to be pretty small in the beginning. All new networks start out small. It takes a while for people to get used to the channel. So we have no illusions of coming out of the gate and being a behemoth. We're in for the long haul." Sherman notes FS1 will "make a strong debut, arguably pursuing a more ambitious agenda" than NBCSN and CBSSN. FS1 "has a healthy menu of live content," and also is "developing its own studio shows to compete directly with ESPN." Wanger: "We have to be different. We have to be the alternative. Otherwise, people won't change the channel from ESPN to try Fox Sports 1." ESPN has one "huge edge over the new Fox Sports 1: an arsenal of rights deals with virtually every major property in sports." Still, Fox did "make a major statement about its intentions last week when it outbid NBC and ESPN for the rights to the U.S. Open." That was a "clear signal Fox will be aggressive for the NBA, the next major rights package that becomes available in 2016" (CHICAGO TRIBUNE, 8/14). Sherman gives FS1 "credit for attempting to take on the SportsCenter powerhouse," something NBCSN and CBSSN "have declined to do." Sherman wrote he is "intrigued" by "Fox Sports Live" co-hosts Jay Onrait and Dan O'Toole. Sherman: "However, I fear the panel concept could be plagued with potential pitfalls." FS1 "has a lot riding on Fox Sports Live," and it "will set the tone for the new network, giving it an early identity for better or worse." Sherman: "We'll see if different works" (SHERMANREPORT.com, 8/13).

FOX' USGA DEAL GOOD FOR THE GAME? GOLF.com's Gary Van Sickle wrote it was an "easy call" for the USGA to accept Fox' offer, as it was "more than double the USGA's previous TV contact, and about $15 million a year more than NBC’s best counteroffer." With "no disrespect" to NBC or analyst Johnny Miller, this "may be the best thing to happen to golf since they figured out how to put that tracer line on players’ tee shots so you can follow the arc of the trajectory." NBC "lost the U.S. Open because it didn’t want to pay the inflated price, and that was probably a smart business decision." Fox Sports is "going to lose a bunch of money on the USGA package," but the U.S. Open will "be a loss leader for Fox Sports, a way to get the viewers into the store." That "makes the big buy-in price worth it, maybe." Fox' deal "could be good for golf" because it is "time to break the mold for televised golf." A lot of people "think it’s boring." Van Sickle: "We need a whole new approach to attract new viewers, maybe even to keep the old viewers. ... Could Fox make golf any more boring than any of the other networks? We have nowhere to go but up" (GOLF.com, 8/13). GOLF WORLD's Jaime Diaz writes while Greg Norman reportedly has been offered the lead analyst position on Fox, the net should "make a profound statement" and hire Jack Nicklaus. He may not "on first blush fit Fox's high-energy image," but if the net "puts the emphasis of its coverage on authenticity and depth of knowledge, Nicklaus is the best person for the job." Nicklaus is a "natural analyst and an extremely good explainer." He is "more tempered than Johnny Miller, making less noise but carrying more weight" (GOLF WORLD, 8/19 issue).
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