The Sports Business Journal reports that Fox Sports 1 is still without carriage deals with DirecTV, Dish Network and Time Warner Cable. FS1 is looking to charge distributors 80 cents per subscriber per month with increases up to $1.50 per subscriber per month.
While the negotiations are being described as “amicable” and the fact deals have yet to be complete, there still is time left for the companies to agree for FS1 to launch with all three distributors on August 17th. However, the new price rate with subsequent increases may give pause to be concerned. Moreover, with cord cutters and subscriber complaints about the increases in cable/satellite fees rising (as distributors pass along the increase in subscriber rates), there is a swell of talk that distributors may ditch sports networks.
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The three distributors represent 46 million subscribers and could put a dent into the 90 million households FS1 hopes to reach next month. While it is crunch time, the companies could still broker deals. However, if one of these distributors holds out, it could be a dent into FS1’s plans. One need only look to the fact that DirecTV and the Pac 12 Network are still at an impasse in negotiations and while many thought that one company would cave by the time college football…then college basketball came around, neither side has budged.
For the UFC, losing a portion of its audience (or potential audience) can hurt its fall PPV events not to mention the upcoming TUF featuring Ronda Rousey and Miesha Tate and the expected huge buildup for Silva-Weidman II. MMA Payout will keep you posted on this issue.
Wow. You would think this would be the first thing they did. They have already done a lot of marketing for the launch. You would think so much marketing and so many events already planned for the opening weeks. That it would give the distributors all the leverage knowing Fox will bend over backwards to launch on time.
Again, this is cause for speculation, but not necessarily worry.
“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.”
http://www.sportsbusinessdaily.com/Journal/Issues/2013/07/15/Media/FS1.aspx
If distributors ACTUALLY started dropping sports networks (actually doing it, not just threatening to do so), you’d have to think there would be a shift in negotiations at that point. These companies can’t allow their sports networks to just die on the vine; too much has been invested at this point.
The cord-cutter/passing along costs to subscribers scenario seems like a harbinger for the eventual death of traditional TV distribution: people are beginning to move away from purchasing big TV packages that include a slough of channels they have no interest in. I myself watch my cable programming at a friend’s or at a bar (when it comes to sports, and no, I don’t feel obligated to buy anything when I go there), and only use my TV for streaming services, UFC.tv and other iPPVs, and network stations (FOX, CBS, ABC, and NBC are STILL broadcast for free over the air in HD, all one needs is a digital antenna). I cut the cord in 2010 when I realized almost all the shows I watch are on free network stations, and that I could either catch cable/satellite sporting events at a bar or at a friend’s house. There’s just no justification to spend what cable/satellite companies are asking.
nascar gets up to 4 million or more viewers on speed… they have a wwe type of fanbase. I dont think the carriers will want to risk losing subscribers over this. It’s also in their best interests for fs1 to succeed so espn can have some real competition.
They don’t need FS1 to succeed since ESPN is already showing some softening.
I must be honest, it would be sad to see the UFC take a huge hit based on an alliance with a network that failed to garner distribution. It’s similar to what hurt boxing in the US starting in the 1980s.
Some people thought FUEL would be a huge hit to the UFC. It ultimately wasn’t. The worst thing that came from the FUEL deal was that Weidman didn’t get a ton of exposure in his most impressive victory before his title fight, but the fight sold well anyway. Of the 62 events the UFC will have held in 2012/2013, only 10 were on FUEL (16%). FUEL wasn’t necessarily good for the UFC, but it wasn’t much a problem in hindsight. I don’t see where else those 10 events would’ve been broadcast given FX and FOX’s schedules.
Those events on Fuel would never have been made or aired. The Fuel events were just extra. Go back and look how many mor event the UFC ran than when they were on Spike. The last 2 years at Spike the UFC had 24 and 27 events in 2010 and 2011. With Fox they have ran 32 in 2012 and counting events already booked for the year they will run at least 32 events in 2013. Also those Fuel events were specifically to try and grow Fuel TV or they likely would have never happened.
I think Fuel has to be looked at as a success. We got more events and the UFC events did cause a very large increase in subscribers to Fuel. It was always a long term plan to grow Fuel so we never got to see it pan out over a long time. Because Fox come up with a better idea how to use their networks and the UFC.
I see your point about Weidman. But that isn’t a Fuel issue. IF there is an issue it is in the booking process of putting a possible title contender of a Big selling Title division on the event. Which im sure they didn’t expect him to fight for the belt his next fight when they made him headline the event. But I don’t feel it is a major issue. Because I believe a large portion of the PPV buys fan base will be Fuel subscribers and have watched this Fuel event.
Fuel was a short term success and we will never know what would have happened long term. The ratings for events, weigh ins, and pre and post fight shows were getting better and better ratings. More and more people were finding out about Fuel and making it their go to network before and after each PPV.
The same thing happened to boxing with HBO and Showtime in the 80s.
Popular events went to these upstart channels. Over time it grew the popularity of these channels at the expense of the popularity of the sport. It’s been going on for 30 years.
That is why I never liked the idea of a UFC channel. The channel might be profitable and successful. But it would just be preaching to the choir. They would only reach the same hardcore fans for decades until they fade away while not being able to reach anyone new and grow the fan base. It is best to be on a network that caters to many demos and has many variety’s of programs. That can at some point lead some people to the fight and over time people become fans. I think it can work if you keep a large presence on a major network. As the UFC does more and more events around the world(I expect around 40 events this year). They will need a place to show these fights. If you are doing an event in China and you can slap this show on a UFC network and get 500K- 1m viewers for a Chinese loaded card wit unknown fighters that other wise wouldn’t be seen. The network would workout great. But I think the UFC needs to get more events on Regular FOX in a good time slot before going down that road.
Fuel TV was a success for FOX. Fuel TV also hurt the UFC a lot the past two years in terms of exposure. Most of their programming (unleashed, UFC tonight, etc) was all there along with prelims and entire events.
UFC took that one in the chin as parts of the deal of being on FX and FOX.
@Jose That’s the cost that they took to get that extra money from FOX.
Just like boxing took a pay raise going from NBC, CBS, basically all the networks in the 70s and 80s to go to HBO & Showtime. Only difference is that it was multiple promoters making the move not just one brand.
I agree, Jose. That Unleashed shows and the programs you mentioned took a hit compared to the ratings they were getting on Spike. But at the same time they UFC picked up extra views with as many as 5 extra events. They also picked up millions of extra views and viewers with their quarterly FOX events. So from that perspective I see it as a Push. But a success for fans and financially both made money from it.