The launch of Fox Sports 1, the News Corp attempt to unseat ESPN and its family of networks from the top of the cable sports mountain, is a little over a month away. But, like any new cable network, they’re facing challenges—namely, whether or not service providers will be picking up the channels for carriage to their subscribers. Estimates right now show that the network may fall short of the 90 million homes they expected to air in at the time of launch.
DISH Network, Time Warner Cable, and DIRECTV, who collectively represent more than 46 million subscribers, are still in negotiations with Fox about FS1.
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The fact that so many deals are open a month before a network launch is not unusual in the cable industry. Typically, carriage deals like FS1’s get finalized in the days leading up to or just after a channel’s launch.
Though talks have been described as amicable for the most part, news that some big deals aren’t done runs counter to the widespread belief in the sports industry that FS1 will flip a switch next month and launch to 90 million homes. While neither Fox nor distributors would comment about the state of talks, ticklish carriage negotiations and a new FS1 rate fee are slowing the process.
As with other sports TV deals these days, one of the main snags is over price. Distributors currently pay around 23 cents per subscriber per month for Speed, according to SNL Kagan. Sources say FS1 is being offered at 80 cents per subscriber per month at first, with increases that would push the fee to the $1.50 range over the life of a multiyear carriage deal.
Originally, distribution executives believed they would be able to carry FS1 at the same lower rate they pay for Speed until their Speed contracts end, but sources say Fox has not made that offer to any distributor that hasn’t signed new carriage deals.
Also complicating matters is the presence of other Fox-owned networks in the talks. For example, Fox also is converting Fox Soccer Channel into an entertainment channel called FXX and has to convince distributors to approve that change, too. Other Fox sports channels are part of the discussions, as well.
While none of this is unusual, Fox would like to have deals in place before launching if it wants to be more successful in its attempts to unseat ESPN than NBC Sports Network has been. More on this story as it develops at the TV, Internet and Phone Blog.