Rupert Murdoch's News Corp. is taking steps to start a U.S. sports network on cable TV aimed at challenging ESPN, according to people with knowledge of the situation.
News Corp. is assembling the required rights from pay-TV carriers and sports organizations, said the people, who requested anonymity because talks are private. While a final decision hasn't been made to move forward, the company is considering converting its Fuel action-sports network to the new channel, two of the people said.
Last year News Corp. secured rights to the Pac-12 and Big 12 conference games, as well as to soccer's World Cup in 2018 and 2022. The company also owns 20 regional sports networks.
A national sports channel can capture higher affiliate fees from pay-TV providers such as Comcast and DirecTV, according to research firm SNL Kagan. ESPN will command $5.06 per subscriber per month this year, the most of any cable channel, SNL Kagan estimates.
That would help pay for sports rights that are growing more expensive. Fox, for example, holds rights to broadcast Los Angeles Dodgers games through next year and has exclusive negotiating rights to renew through the end of 2012. The price is likely to go up with the team's planned sale, for a record $2 billion, to a group led by basketball Hall of Fame player Magic Johnson and Guggenheim Partners CEO Mark Walter.
The new channel could begin service by the end of the year, one person said. The effort is being led by David Hill, the chairman of Fox Sports, one person said.
New York-based News Corp. has clearance from some carriers, including DirecTV, the biggest U.S. satellite TV provider, two people said.
Fuel, a 24-hour action-sports network that carries mixed-martial arts fights, is available in 36 million U.S. homes, according to Fox.
Lou D'Ermilio, a spokesman for Fox Sports, had no immediate comment. Darris Gringeri, a spokesman for El Segundo, Calif.-based DirecTV, declined to comment.
-- Bloomberg News --