Bloomberg News

Fox Sports 1 Said to Debut on TV Systems Without New Fee Accords

August 15, 2013

Twenty-First Century Fox Inc. (FOXA:US) lined up DirecTV, Dish Network Corp. (DISH:US) and Time Warner Cable Inc. (TWC:US) to carry the new Fox Sports 1 TV network, reaching 90 million households with a lineup that will include college football and Major League Baseball.

The channel replaces Fox’s Speed, an auto-racing network, when it debuts on Aug. 17. DirecTV, Dish and Time Warner Cable are keeping their existing financial arrangements with Fox, three people with knowledge of the matter said. They will continue to pay their current subscriber rate, said the people, who asked not to be named because terms are private.

The network, in an e-mailed statement today, said every major pay-TV provider is “on board.”

Fox, which is challenging Walt Disney Co. (DIS:US)’s ESPN for sports audiences, promised investors the new network would reach 90 million households. By allowing the distributors to carry the channel without long-term fee deals, Fox adds about 46 million pay-TV households and meets that objective. Lou D’Ermilio, a Fox spokesman, declined to comment on terms.

Comcast Corp., Cox Communications Inc., Verizon Communications Inc.’s FiOS, AT&T Inc.’s U-verse, Cablevision Systems Corp., Charter Communications Inc. and Suddenlink Communications have reached deals to carry Fox Sports 1, representing about 45 million subscribers, Sports Business Daily reported on Aug. 12.

Rising Costs

Fox Sports 1 will include sports-centric shows, including a program hosted by Regis Philbin, and will carry live sports including college football, college basketball, Major League Baseball and soccer’s 2018 and 2022 World Cups.

Cable and satellite operators pay about 31 cents a month per subscriber for Speed, according to research firm SNL Kagan. Fox Sports 1 will probably earn about 80 cents per subscriber per month in 2014, Kagan estimates.

DirecTV (DTV:US), Dish and Time Warner Cable are the No. 2, No. 3 and No. 4 pay-TV providers, respectively, trailing Comcast. Executives at the companies have publicly lamented the rising cost of sports programming.

DirecTV Chief Executive Officer Mike White said this month the satellite-TV provider won’t carry the Pac-12 network unless it agrees to be on a separately priced sports tier or available a la carte.

“As long as they want to insist that you put more in a bundle that’s already too big and tax all of the customers at a rate that we don’t believe is fair for the customers that don’t care about it, and are unwilling to entertain any discussion of letting the customers choose, we probably won’t be able to carry it,” White said.

Time Warner Cable is engaged in a standoff with CBS Corp., which broadcasts sports including the National Football League, over fees to carry its programming in New York, Los Angeles and Dallas. The cable company, based in New York, began blacking out CBS in those markets on Aug. 2.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • FOXA
    (Twenty-First Century Fox Inc)
    • $37.23 USD
    • 1.02
    • 2.74%
  • DISH
    (DISH Network Corp)
    • $69.72 USD
    • 1.24
    • 1.77%
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