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Concern about programming costs only goes so far. While Time Warner Cable and Bright House customers continue to go without Showtime and access to CBS programming online (in addition to local station blackouts in New York, Texas and California), the two cable companies have found room in the budget to add two new expensive sports networks to their lineups.
Fox Sports 1 and 2 replaced the much-less-expensive Speed and Fuel Networks Aug. 17 on both cable systems. Fox had been getting 23¢ per subscriber each month for Speed and about 20¢ monthly for Fuel. Fox expects both cable operators to pay a monthly fee of 80¢ per subscriber for Fox Sports 1, rising quickly to $1.50 within a few years, according to Sports Business Daily. The cost of Fox Sports 2 is unknown.
Fox wants the two networks to gradually rival the most expensive network in your cable television package – ESPN. To manage that, Fox will need to engage in a bidding war with its Walt Disney-owned rival to grab the most-watched sporting events. Sports franchises love that, because they will profit handsomely from the proceeds. But both Fox and Walt Disney are bidding with cable subscribers’ money. The more sports programming costs, the higher cable bills will rise. ESPN already charges at least $5 a month per subscriber. To rival ESPN, Fox Sports may eventually have to charge as much, boosting cable bills an extra $4-5 a month for the competing sports networks.
“It’s going to be a popular channel,” said Joe Durkin, Bright House senior director of corporate communications. “It’ll be rich with sports, and we’re happy to bring it to our customers.”
Fox Sports negotiated access to more than 90 million U.S. homes through agreements with most large cable, telephone, and satellite TV distributors. Attracting them: at least 5,000 annual hours of live events and original programming including college basketball and football, joined by Major League Baseball next year. The network will also feature NASCAR, international soccer and Ultimate Fighting Championship (UFC) competitions.
Fox Sports 2 will feature mixed martial arts at the outset, with more programming coming as the network develops.
Besides the two national sports networks, Fox also owns almost two dozen regional sports channels including Prime Ticket and Fox Sports West. It also acquired a 49% stake in New York’s YES, the Yankees Entertainment and Sports Network, with an option to buy it outright later. It also recently acquired a sports channel in Cleveland.
Fox also plans to launch another entertainment cable network Sep. 2 with the debut of a companion to the FX network Fox is calling FXX.
FXX is being programmed for… you guessed it, young adults aged 18-34 — the most coveted demographic for advertisers. It will feature reruns and original programming, including Parks and Recreation, Arrested Development, How I Met Your Mother, Freaks and Geeks, Sports Night, It’s Always Sunny in Philadelphia, The League and Totally Biased with W. Kamau Bell.
You may not have asked for the new network, but chances are you are getting it anyway. Fox has signed carriage agreements with Comcast, Time Warner Cable, Charter, Verizon FiOS, AT&T U-verse, and both satellite services.
Theoretically, couldn’t this create competition with ESPN, therefore lowering ESPN’s price while increasing its own price?
ESPN can’t lower its price to cable operators because it needs that revenue to pay for the auctioned rights to carry coveted sports programming. With Fox seeking greater prominence, you can expect Fox Sports to bid up the costs of those sporting events. So if the NFL offers access to 20 games to the highest bidder, in addition to broadcast networks, you will now find ESPN and Fox Sports trying to outbid one another. In the end, if it costs an extra $5 million because of inflated bidding, those sports channels will increase their rates to cable operators to pay… Read more »
I think that the new Fox Sports 1 increases the chances of allowing sports channels to go A La Carte, for pay TV customers
If not ala carte? Why not at least bump all of the sports into 1 package? I mean if us bandwidth hogs are being subsidized by ‘little grandma’ why is it ok with the sports stuff?
Sports package won’t happen with ESPN. You must have forgotten when ESPN started refusing to be carried in a sports tier. They won’t allow TWC to carry ESPN in a sports tier and everyone has to pay for it. Something which TWC is not particularly bothered about based on the fact it’s still the most expensive network of any kind and TWC is more than willing to hand over the money and let the customer pick up the tab.
“Sports package won’t happen with ESPN. You must have forgotten when ESPN started refusing to be carried in a sports tier. They won’t allow TWC to carry ESPN in a sports tier and everyone has to pay for it. Something which TWC is not particularly bothered about based on the fact it’s still the most expensive network of any kind and TWC is more than willing to hand over the money and let the customer pick up the tab” I understand that the author highlighted TWC in his original article and buried the fact that all major providers in the… Read more »
Yahoo, I’m a cord cutter so I wont be paying for this.
When will this stop? I’m not a big sports fan. I don’t want all these expensive sports channels. I don’t watch them. I don’t get any extra pay channels. I have the watch and surf package with a DVR. I did use Phil’s twitter method to get a good deal this past spring that lasts for a year so next spring I’ll either have to try again or seriously consider cancelling. I’m not sure how receptive TWC would be next spring to giving me yet another deal. How long can they keep giving deals out to the same customer? TWC,… Read more »