Friday, August 16, 2013
Can Fox Sports 1 Topple ESPN?
Fox Sports 1 appears to be the stiffest competition for ESPN because of the resources of its parent, 21st Century Fox, and the ambitions of its chairman, Rupert Murdoch, whose failed challenge to ESPN in the 1990s inexorably led to the newest one.
But even as it takes aim at ESPN, Fox Sports 1 has a long way to go to match an empire that is nearly 35 years in the making. Fox Sports 1 does not have nearly as many events, nor does it have an empire as large or revenue as immense as ESPN’s. But Fox executives are looking, for now, less at the impossible task of knocking out ESPN than at establishing a competitive niche.
For this, they look for inspiration within its own history of industry-altering startups: Fox News Channel in 1997, which has upended cable news, and the Fox broadcast network’s acquisition of NFL rights 20 years ago.
“The question now is the same you would have asked Roger Ailes when he started Fox News: How do you deal with the 800-pound CNN elephant in the room, and with MSNBC?” said David Hill, the founding chairman of Fox Sports and a consultant to Fox Sports 1. “You don’t worry about anybody else apart from yourself or whether you’re going to fail.”
Fox News’s success was, of course, built on strong personalities and conservative politics, not acquiring events, as Fox Sports 1’s will be based upon. It has Pacific-12 and Big 12 Conference football and basketball; Big East basketball; NASCAR; the UFC; the UEFA Champions League; Major League Baseball (starting in 2014); and World Cup soccer coverage (starting with the women’s tournament in 2015). And last week Fox added the U.S. Open golf championship, paying $1.2-billion over 12 years to outbid NBC and ESPN to broadcast a sport it has never carried.
That’s a pretty good start compared with how NBC Sports Network and the CBS Sports Network began - and how they are now.
Another rival, CNN/SI, did not survive. Turner Broadcasting and Time Warner started CNN/SI as a news and highlights channel in 1996, but it had no sports events. ESPN countered by creating ESPNews. Death came to CNN/SI in 2002. “It was difficult competing with an organization that is dedicated to gobbling up rights,” said Steve Robinson, who was the executive vice-president of CNN/SI.
Fox Sports 1 is designed as the spiritual offspring to the freewheeling Fox NFL Sunday pregame show on the Fox broadcast network, where “sugarcoating the information pill” became the mantra. That has led to Fox Sports 1 now being the avatar of fun.
About that positioning, Will Leitch wrote on Sports on Earth: “Because nothing is more intellectually serious than ESPN!”
Eric Shanks, the co-president of Fox Sports, said: “We’re going to spend a lot of time in marketing on fun. It’s not Saturday night laughs at the Chuckle Hut. But being tough is fun. Buzzer beaters are fun. Tailgating is fun. Slam dunks are fun. We feel there’s a place in the sports landscape for a positive, fun, enthusiastic fan perspective on sports.”
That philosophy led Fox Sports 1 to hire Jay Onrait and Dan O’Toole, known for their jokey approach as sports anchors in Canada, to play the same roles on its marquee nightly news show, Fox Sports Live.
It also led to placing Regis Philbin and a comedian, Michael Kosta, on the weekday afternoon talk show Crowd Goes Wild.
Still, Fox Sports 1 cannot divert too far from doing what is necessary to be a successful network: producing games and studio shows intelligently, and hiring people for the studio shows and game broadcasts who are enlightening, good company and maybe a lot of fun.
Shanks acknowledges that Fox Sports 1 will be compared, especially, to ESPN.
How well will Crowd Goes Wild, with Philbin and five of his cohorts, compete from 5 to 6 p.m. Eastern against Around the Horn and Pardon The Interruption? Will Onrait and O’Toole make fans flee ESPN’s venerable SportsCenter at 11 p.m.? Will Fox Sports 1 provide an alternative to Skip Bayless and Stephen A. Smith’s infernal debating on First Take?
Watching Fox Sports 1 begin its journey is Mark Lazarus, chairman of the NBC Sports Group, whose properties include the NBC Sports Network.
“There’s a role for everybody,” he said. “The sports pie is growing.” He added, “I think Fox Sports 1 will find, as we have, you get your report card every morning and you’ll have good mornings and bad mornings.”
John Skipper, the president of ESPN, said: “Having seen their offerings to date, we feel in a very good position to compete. We relish that competition. It will sharpen us.” He has taken some high-profile steps to counter Fox Sports 1, bringing back Keith Olbermann, swiping Jason Whitlock from Fox and hiring the political and sports statistician Nate Silver from The New York Times.
Fans now must find Fox Sports 1. It is replacing Speed, the motor sports network, on cable, satellite and telephone company channel menus. Its various locations around the country can be found on the Fox Sports 1 website. Fox has spent more than a year converting Speed to Fox Sports 1 in order to charge more for it. The company said it expected to have about 90 million subscribers.
David Bank, an analyst for RBC Capital Markets, said the Fox negotiators’ goal was to push Speed’s subscriber fee of about 23 cents a month to $1 in four years or so. “I don’t think anybody expected Fox Sports 1 to get 80 cents immediately,” he said, referring to a report published Thursday. “There will be a predictable ramp-up to profitability. This is a phenomenal business.”
A $1 subscriber fee can fuel a billion-dollar network, but that lacks the same octane that ESPN receives from its monthly subscriber fee of $5.54, according to the research company SNL Kagan. That fee translates to revenue of around $6.6-billion.
The difference in ESPN and Fox Sports 1’s finances may not play a role when the rights to the Big Ten Conference and the NBA come up for bidding. Those are the next major battlegrounds where Fox Sports 1 may or may not alter industry history.
(New York Times)