SBJ/July 29-August 4, 2013/Media

As FS1 talks go on, rebrand of Fuel to FS2 quietly readied

Cable and satellite operators are preparing for Fox Sports to launch Fox Sports 2 next month even though the media company still has not announced anything official yet.

Earlier this month, cable systems in the Northeast sent notifications to their subscribers announcing plans to flip Fuel into FS2 by Aug. 17, which is the date when Fox Sports 1 is scheduled to launch.

Several distribution executives have said that Fox has told them to prepare for the change, which would be part of a soft transition around Aug. 17.

This raises the possibility that some distributors may carry FS2 but not FS1 at the beginning. Fox has yet to sign affiliate deals for FS1 with several top distributors, including DirecTV, Dish Network and Time Warner Cable. FS2 is not running into the same distribution problems because Fox does not need to get new affiliate deals to rebrand Fuel because of economics. Fuel costs distributors about 15 cents per subscriber per month, according to data from SNL Kagan. That rate is not expected to change when the channel rebrands to FS2.

Speed costs about 23 cents per subscriber per month. However, Fox is trying to increase that to about 80 cents for FS1’s launch.

The distribution negotiations over FS1 could explain why there’s been so little fanfare over FS2. Fox executives want to lock down distribution for its main FS1 channel before setting its focus on FS2.

FS2’s content will feature a lot of overflow content that doesn’t fit on FS1. The channel already featured a lot of UFC content under the Fuel brand.

Fox views FS2 as a complement to FS1 in the same way that ESPN2 complements ESPN. The bigger events will be on FS1, rather than FS2.

Much of the reason for that comes down to distribution. Currently, Speed is in 85.4 million homes, according to Nielsen’s July numbers. Fuel is in 36.8 million. Many of Fox’s rights deals, such as the one it signed with Major League Baseball, guarantee a certain level of distribution that would keep games off of FS2.

Still, Fox executives believe they have enough programming to support both channels and its broadcast windows. Some rights, such as the FIFA World Cup in 2018 and 2022, will be spread across several Fox-owned channels, including FS2.

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