Fox Sports 1 Still Seeks Half the Subscribers It Pledged
Twenty-First Century Fox has yet to strike deals to get Fox Sports 1 in the channel lineup of three of the biggest U.S. pay-TV companies, days before the challenger to ESPN is scheduled to debut.
So far Comcast, Cox Communications, Verizon Communications' Fios, AT&T's U-verse, Cablevision, Charter Communications and Suddenlink Communications have reached deals to carry Fox Sports 1, representing about 45 million subscribers.
But the network, scheduled to arrive on Saturday, has been talking about going live in more than twice as many homes. The new 24-hour sports channel "will be available in up to 90 million homes at launch," Fox Sports Co-President and Co-Chief Operating Officer Randy Freer said at last week's Investor Day.
Negotiations are still under way with DirecTV, Dish Network and Time Warner Cable, which have a total of about 46 million subscribers. The talks, confirmed by spokesmen for the pay-TV companies, are over fee increases Fox is seeking in exchange for replacing motor-sports channel Speed with the new network.
The haggling comes as the top executives of the pay-TV carriers publicly lament the rising cost of sports programming. 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.
"Somebody, sometime may decide that sports isn't something they have to have," Dish Chairman Charlie Ergen said last week, referring to pay-TV companies. "They can have a materially lower price per customer. While they'll lose customers initially, they will gain customers long term."
Where no deal for Fox Sports is reached by Saturday, Fox will continue to air previously recorded Speed programming -- until an agreement or the end of the contract to carry Speed.
"We are working to have wide distribution at launch," Lou D'Ermilio, a Fox Sports spokesman, said in an interview. He declined to comment on specific negotiations.
Fox Sports 1 will include sports-centric shows, including one hosted by Regis Philbin, and will show live sports including college football, college basketball, Major League Baseball and soccer's 2018 and 2022 World Cups.
ESPN, owned by Walt Disney Co., has distribution in 98 million households. The network charges pay-TV operators about $5.50 a month per subscriber, according to Kagan.
Time Warner Cable is engaged in a separate standoff with CBS Corp. over fees to carry its affiliates in New York, Los Angeles and Dallas. The cable company began blacking out CBS in those markets on Aug. 2.
~ Bloomberg News ~