[opendtv] News/Analysis: Fox Takes On ESPN
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 6 Oct 2004 09:09:23 -0400
Looks like Rupert Murdoch is getting ready to expand and take on
Cable Sports giant ESPN, as well as adding some more targeted news
networks for business and entertainment.
Bert might be inclined to point to this and suggest that this would
be a great opportunity for Fox to build a national DTV multiplex. The
B&C article notes that one of the biggest challenges that Murdoch
faces is obtaining cable rights for major sporting events.
But this is not what Murdoch is interested in. He is interested in
the $1 billion cash flow that ESPN provides to Disney, a huge chunk
of which comes from cable and DBS subscriber fees. And he is
interested in adding new networks to DirecTV, and using the leverage
to get these networks carried on cable and other DBS systems.
The problem with adding Free OTA networks that they simply cannot
generate enough revenue to cover the costs of providing compelling
sports content. The money is increasingly coming from subscriber
fees...
Regards
Craig
http://www.broadcastingcable.com/article/CA469132.html?display=Breaking+News&referral=SUPP
Fox Takes On ESPN
By John M. Higgins -- Broadcasting & Cable, 10/5/2004 6:50:00 PM
Already dominant in regional sports channels, News Corp. chairman
Rupert Murdoch wants to start a new national sports network that
would tackle ESPN. "We'd like to very much," Murdoch told investors
at Goldman Sachs' annual Communicopia conference in New York Tuesday.
Murdoch also acknowledged that Fox News will start two new networks
in relatively short order, one business news network, one focused on
entertainment news. 'That's a no brainier. We're getting on with
that." The company already has a college sports network and a reality
network ready to launch.
Nodding to the roughly $1 billion in operating cash flow Disney sees
from ESPN, Murdoch added "We'd certainly like the profit."
Murdoch has been hungry for new networks now that he has control of
DirecTV and can readily use the DBS service to secure the first 13
million subscribers.
Currently, News Corp.'s national sports networks are limited to
relatively minor sports (e.g., Speedvision or extreme sports startup
Fuel). But on the regional level, Fox Sports controls pro baseball
and basketball rights in markets like Los Angeles and New York. And
Fox's broadcast network licenses national NFL and NBA rights.
But taking on ESPN would require national cable rights, which would
be a slow, expensive process since ESPN already has everything but
NASCAR locked up.
Murdoch would likely spark a bidding war for rights that are already
a stiff loss-leader for most TV buyers. And Murdoch acknowledges that
challenging ESPN would require football. "I don't think you could do
it without the NFL franchise in there."
Murdoch's control of DBS leader DirecTV give him some immediate
distribution, but he, of course, would need more. Murdoch said that
he could readily get a cable operator in as a partner.
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