50 Most Influential: Introduction 50 Most Influential: No. 34 Ditching ’burbs for Detroit NHL brings doughnuts, signs Dunkin’ deal 50 Most Influential: No. 16 ‘Suite’ gifts, and even a few ugly ones Group builds platform for hockey award 50 Most Influential: No. 38 Alabama scores some serious bling Sports Media: NFL steps into esports
SBJ/March 11-17, 2013/MediaPrint All
While Fox Sports trumpeted its plans for Fox Sports 1 in New York City last week, anxious distributors were waiting to hear what a new high-priced sports channel would mean for their business.
The early line is that not much will change, at least for most cable and satellite operators. Instead, several sources said Fox will abide by the carriage deals that it already has in place for Speed.
That means some distributors will be able to carry FS1 under the same contracts and at the same rates they pay for Speed for the next several years.
SPORTS MEDIA: Takeaway from Fox Sports 1: Hill hasn’t gone anywhere
But as those deals expire, Fox will negotiate new, more expensive terms for the channel that will see monthly rates jump from around a quarter to more than $1.
The importance of Fox’s distributor relationships can’t be overstated. Fox needs to forge new agreements with these distributors if it wants FS1 to be profitable in the next two to three years, a time frame Fox’s executives used last week.
On the other hand, distributors will need to account for a new channel that is around four times more expensive than the one it is replacing. Distributors currently pay around 23 cents a subscriber per month for Speed, according to SNL Kagan. Sources say FS1 will end up costing more than $1 per month.
Fox is counting on the strength of FS1’s schedule, which includes 5,000 hours of live event programming a year, and FS1’s TV Everywhere components to convince distributors to cut deals.
Comcast was the first big distributor to see its Speed deal expire, when its overall deal for two dozen Fox channels ended at the end of 2012. Comcast signed a long-term deal with Fox last month that includes FS1. Fox held up officially announcing FS1’s launch till it finished the Comcast deal.
It’s not clear how much Comcast is paying for the channel, but sources said it’s unlikely that Comcast will pay the full $1-plus rate out of the box. It is the country’s biggest distributor, with 22 million subscribers. That means it had the leverage to work out a “most favored nation” clause, or MFN, that allows it to match the most favorable terms negotiated by other operators, sources said.
AT&T (4.3 million subscribers) and the National Cable Television Cooperative (which represents 25 million subscribers) are close to deals to carry FS1, sources say. These deals should be signed before FS1’s August launch.
Fox’s next negotiation will be with Charter (4.1 million subscribers), which has its Speed deal expiring later this year. Fox also has several of its RSN deals with Cox (4.6 million subscribers) expiring this year, which could allow it to start FS1 talks.
Fox’s deals with Time Warner Cable, DirecTV, Dish Network and Cablevision are staggered over the next couple of years. So until the deals expire, those distributors will pay the rate they were paying for Speed,
As part of their current Speed contracts, most distributors have the right to drop FS1 on Aug. 17, when the changeover is scheduled to occur. That’s because their Speed deals allow for a motorsports channel, not a multisport channel. Once Fox changes the programming format, distributors could consider their contracts nullified.
Sources with most of the big distributors said they have not made any decisions about what they would do in August. Several executives said they do not expect to dump the channel, especially if they can continue to carry it at Speed’s rate.
None of the executives would speak on the record about negotiations that aren’t finalized. Generally, operators contacted last week were curious about the channel, having heard little about what it would look like or how it would be offered. They don’t relish the idea of supporting another high-cost sports network. But they are interested to see how a credible alternative to ESPN will affect their business.
In its negotiations, Fox is demanding that distributors make FS1 available to all subscribers by moving the channel to its most highly penetrated tier, sources said.
Speed is in 86.2 million homes, according to Nielsen. At last week’s announcement, Fox said it plans to launch the network to more than 90 million homes. Several Comcast systems have Speed on a digital tier. If, as expected, all Comcast systems move FS1 to their highest penetrated tier, the channel could hit 90 million homes.
At more than $1 a subscriber per month, FS1 would become the third-most-expensive national cable channel behind ESPN ($5.47) and TNT ($1.27), according to SNL Kagan.
By comparison, NBC Sports Network charges 33 cents a subscriber per month and CBS Sports Network charges 24 cents a subscriber per month, according to SNL Kagan’s data.
The network that coined “Breakfast at Wimbledon” is looking to start a new tradition — Mimosas at Monaco, you might call it.
NBC will pre-empt its Sunday morning staples “Today” and “Meet the Press” this May to show the Monaco Grand Prix live. The telecast, which will air May 26 at 7:30 a.m. ET, marks the first time the famed race will be aired live on U.S. broadcast TV.
The Monaco Grand Prix will be the first of four F1 races airing live on NBC this year.
NBC last year spent more than $3 million to acquire the rights to F1, ending the sport’s 17-year run on Fox-owned Speed. The Monaco Grand Prix will be the first of four F1 races that air live on NBC this year. The other three — Montreal on June 9; Austin, Texas, on Nov. 17; and Brazil on Nov. 24 — give F1 unprecedented network coverage in the U.S. Another 13 races will air on NBC Sports Network and two races will air on CNBC because of a scheduling conflict with the Tour de France on NBC Sports Network.
It will televise its first race on NBC Sports Network this Sunday from Australia at 1:30 a.m. ET with a re-air at 1 p.m. ET. The subsequent 18 races will air live on Sundays between March and November. Races in Asia, which start between 1:30 a.m. and 3:30 a.m., and races in Europe, which start at 7:30 a.m., will re-air on NBC Sports Network each Sunday afternoon.
NBC’s move to land F1 surprised many in the media industry, but the network is making the series a sales priority, and Miller said that the advertising market has responded well to F1 programming.
The network’s sales team signed a deal with Rolex that makes the watch company the presenting sponsor of all of its F1 coverage. It also picked up advertising commitments from ExxonMobil, Mercedes-Benz, Pirelli, John Deere and other companies. NBC sales executives also were targeting categories like financial services, technology and telecommunications that they believe align well with the sport.
Promotional spots for Formula One on NBC highlight the speed of F1, as well as its cultural significance to a global audience.
NBC Sports plans to block off three hours of coverage for every F1 race. It will offer a half-hour of pre-race commentary, two hours of racing and a half-hour follow-up show called “F1 Extra.” It will complement its coverage of all 19 races with a minimum of four features on F1 drivers. Those features will be part of its “36” series, a half-hour show that follows athletes from MLS and NHL for a 36-hour period before big games.
Race coverage will be hosted from NBC Sports’ studios in Stamford, Conn., by Leigh Diffey on play-by-play with analysts David Hobbs and Steve Matchett. They will be on-site for the races in Monaco, Montreal and Austin. Longtime F1 journalist Will Buxton will travel to each race and serve as a reporter during the broadcast.
NBC developed two, 30-second promotional spots with creative that focuses on the speed of F1 and aims to appeal to the upscale sports fan by highlighting its international appeal and cultural significance. The spot currently is running on NBC Sports Group properties such as Golf Channel, NBC Sports Network and NBC Sports Regional Networks.
In addition to the ad, Miller said that NBC plans to promote F1 across the entire suite of NBC Universal channels and shows in much the same way it promotes the Kentucky Derby. He expects the open-wheel racing series to be featured on networks like E! and Style and shows like “Access Hollywood.”
“All of them will be involved and part of this, especially when we get to Austin,” Miller said. “That’s when you’ll see those different parts working together.”
After all, it was just seven months ago that I wrote Hill’s corporate obituary. That was in July 2012, when Fox Sports announced that Hill was leaving the division he created in 1994 to take a broader international programming role at News Corp.
But last week, Hill was front and center at Fox Sports’ press conference announcing the channel and was the first executive to speak at the advertising upfront presentation later in the day. He was introduced at the upfront as “the godfather of Fox Sports.”
“I’ve been dragged back from the cobwebs,” he joked. “I would describe myself as a consigliere to [Fox Sports co-Presidents] Eric [Shanks] and Randy [Freer].”
For much of the past decade, Hill has contemplated launching an all-sports network under the Fox Sports banner. In the seven months since he took on a different role with News Corp., Hill has still been in the middle of the network’s plans to launch an ESPN competitor.
“I’ve been dragged back from the cobwebs. I would describe myself as a consigliere to Eric and Randy.”
“The Godfather of Fox Sports”
Photo:WILLIAM HAUSER / FOX SPORTS 1
It was noteworthy that during Fox Sports 1’s upfront presentation last week, it took shots at NBC for its NHL ratings and lampooned ESPN for covering Tim Tebow too much. (A video was shown that featured a robot that repeated the name “Tim Tebow” over and over).
“Shame on us if David was around and you didn’t actually use everything that’s in his brain and everything that’s in his mind to launch the next generation of Fox,” Shanks said. “What would have been the alternative? Not having him? How crazy would that be? ‘Why doesn’t David Hill have anything to do with Fox Sports 1?’ That would have been a bigger story.”
Fox executives say Hill’s biggest contribution will be seen in the studio shows, particularly the weekday 5-7 p.m. block that will consist of Regis Philbin’s “Rush Hour” and “Fox Football Daily,” which will star “NFL on Fox” talent. Hill also developed “Fox Sports Live,” the “SportsCenter” competitor that Fox Sports 1 will run nightly at 11 p.m.
“He’s kind of like our godfather. It’s great to have him come back in the fold,” said Bill Wanger, Fox Sports’ executive vice president of programming and research.
Hill did leave Fox Sports last summer. He’s been spending much of his time working with Star India CEO Uday Shankar to launch three sports channels, including one focused on cricket.
“I’ve been spending my time worrying about programming in India for the last six months,” Hill said. “And I’m going to go back there in two weeks’ time.”
In catching up with Hill after last week’s press conference, he at first deflected questions about his role in Fox Sports 1, saying that Freer and Shanks would be better served to answer them. But the more he started talking about the channel, the more animated he became. It’s clear he has a passion for the channel and believes it will be a competitor to ESPN in the next several years.
“I would like to see us break even in 2 1/2 years,” he said. “But for the first couple of years, there will be losses.”
It’s clear that Hill feels that he has a blank canvas with Fox Sports 1 and is energized about creating content that will resonate with viewers.
Fox Sports executives also seemed energized with the knowledge that Hill was back in the fold on such an important initiative.
John Ourand can be reached at email@example.com. Follow him on Twitter @Ourand_SBJ.
In a little more than a year, USA Today Sports Media Group says it’s achieving the reach, relevance and ad dollars envisioned at startup in late 2011.
Through acquisition of sites like The Big Lead, and with accelerated traffic from last summer’s Olympic Games, USA Today Sports reached a new high in online traffic and has maintained momentum. In February 2012, USA Today and associated sites moved into the top five of comScore rankings for sports sites for the first time, hitting No. 4 with 24.2 million unique visitors. The group hasn’t dropped out of the top five since. Before the aggregation, it ranked outside the top 10, with a little over half of that traffic.
“Overall digital traffic is up 120 percent year over year,” said USA Today Sports Media Group President Tom Beusse. “Clearly a fair amount of that was through acquisition, but we’ve also relaunched and grown traffic on USATodaysports.com by 100 percent. More importantly, we’ve shown that the USA Today Sports brand can be leveraged as marketing assets, which was our goal from the outset.” He went on to add, with a laugh, “As for revenues, they have increased by a significant number and if that weren’t true, I wouldn’t be here.’’
Advertising and marketing alliances with large properties, including the PGA Tour, NASCAR, Churchill Downs and a pending three-year deal with the UFC, have helped build out content and drive advertising revenue. League and property relations, and custom promotions and events, now drive more than a third of the revenue for the Sports Media Group.
A prime example is the relationship with NASCAR, now extended to a three-year deal from its one-year test run, under which Mobil 1 will be presenting sponsor of preview coverage of each NASCAR race every Friday in USA Today Sports. In another case, Anheuser-Busch is sponsoring a multiplatform “Road to the Kentucky Derby’’ series, created under the Churchill Downs partnership.
“We never had league relationships on the business side here, so they have been real door openers for us and made our brand relevant from a sports business standpoint,” said Merrill Squires, senior vice president and head of sports marketing and partnerships at USA Today Sports Media Group.
Another charge for the group was to create new properties from existing assets. Toward that end, the celebrated, if aging, USA Today Super Bowl Ad Meter was tweaked to make it digital and consumer-facing, with a vote of 1,000 online panelists. That change attracted Chrysler as an advertiser. USA Today is now looking at expanding the Ad Meter to other big events, and at some possible on-site experiential extensions.
Gatorade’s sponsorship of USA Today’s High School Sports Super 25 is another recent example.
In its second year, Beusse says the focus will be on continuing to meld Gannett’s local and national media properties. In addition, they are looking at further integration of video into digital content, where there has already been content marketing assignments underwritten by Under Armour and DirecTV. Finally, he pointed to a continued push against the growing legions of displaced fans, where “we have the local credibility and national reach to service that group that can’t get enough content.”