Fox Sports 1 Aims at ESPN’s $10 Billion Annual Revenue

August 18, 2013 by Douglas A. McIntyre

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Source: Thinkstock
If an analysis of ESPN’s issued by Wunderlich Securities and published by The Atlantic is correct, the huge sports network has revenue of between $10 billion and $11 billion a year. No wonder Twenty-First Century Fox Inc. (NASDAQ: FOX) want to built a 24-hour sports channel on its own. No one can be certain what it will cost to make Fox Sports 1 a success, but it has to be an investment by the parent of well into the billions of dollars.

The first day’s programming at Fox Sports 1 had little that was distinctive. The show that headline promotions include, “Crowd Goes Wild,” is the kind of fixed-set show with several talking heads that ESPN launched and perfected long ago. The balance of the promos were for coverage of NASCAR and UFC. “Mike Tyson On Fox Sports 1” might be a winner, if he is as volatile has he was as a fighter.

Fox should be happy that most of the criticism of the network was positive, and negative press was light. Perhaps the harshest view was from Deadspin and was about hockey, a sport that never did well in the ratings:

Despite claims to the contrary and hiring two of Canada’s most beloved sports personalities, today’s launch of Fox Sports 1 doesn’t bring glad tidings of coverage for North America’s most-ignored major sport.

Sure, it’s the NHL offseason. But take a look at what sports for which FS1’s Fox Sports Live website does offer coverage. NCAA basketball, Olympics, and even horse racing make appearances. Hockey does not. We have to imagine this will get fixed soon, but really?

The Fox decision is smart. The NHL players are always on strike.

But comments on programs from the first day are petty and meaningless. ESPN gets most of its income from fees paid by cable networks. Fox Sports 1 has to clear the hurdle that cable companies are willing to pay for ESPN 1, ESPN 2, ESPN 3 and an armada of other channels. Beyond that, the ESPN has been big on Web and in print for years.

The first day of programming for any channel probably has no value in predicting the future. If so, Fox Sports 1 still has a chance.

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