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Fox Sports 1 Will Add $0.57 To Your Monthly TV Bill

Fox Sports 1 Logo

UPDATE (Aug. 17): Fox didn’t get its asking price from a vast majority of carriers. Click here for details.

22 days from its launch date, Fox has yet to secure deals with Time Warner Cable, DirecTV, and Dish Network for Fox Sports 1. That’s 46 million homes, a bit more than half of the 90 million homes that Fox wants the new sports network to have at launch date, and one of the sticking points in this deal might be the asking price.

Several reports have said that Fox is asking $0.80 per subscriber per month to start — a bit less than the $0.90 to $1.00 monthly sub fee many speculated Fox would demand, but certainly more than the $0.23 sub fee that Speed Network, the channel FS1 will replace next month, is currently getting. So if you notice a sudden, unexplained $0.57 increase in your cable or satellite TV bill in the next month or two, this is why.

Note the words “to start”, though. That $0.80/month is just for the first year of carriage. According to John Ourand at Sports Business Daily:

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.

Nobody has reported yet how long that multiyear deal would last. If it’s a 10-year carriage deal, then Fox is asking for a 7.2% annual increase to its sub fee, which is only slightly more aggressive than ESPN’s 6.5% annual increase in its deal with Time Warner Cable. A 10-year carriage deal would carry Fox through many of its biggest TV rights contracts, including:

  • An eight-year, $4 billion deal with Major League Baseball, which begins in 2014,
  • An eight-year, $2.4 billion extension with NASCAR, which begins in 2014,
  • A seven-year, $630 million deal with UFC, which lasts through 2019, and
  • A $425 million deal with FIFA, which lasts through the impending debacle that will be the 2022 World Cup in Qatar.

Those four deals total more than $7.45 billion. However, if Fox managed to get FS1 into 90 million homes under the terms shown above, that channel would collect nearly $12.1 billion in subscriber fees alone during that 10-year span. That amount of money will also cover:

  • The $1.4 billion Fox will pay for Pac-12 sports through 2024,
  • The $1.2 billion Fox will pay for Big 12 sports through 2025,
  • A five-year, $42 million deal with Conference USA that lasts through 2016, and
  • That 12-year, $500 million deal Fox struck for Big East basketball.

After all that, there’s still $1.5 billion left, which is a nice chunk of change to have on hand — and that’s before we even start talking about advertising revenue, which would cover the production costs and talent, if the ratings are good enough.

(Presumably, some of that $1.5 billion will go toward continued coverage of the UEFA Champions League, which Fox has through 2015. ESPN and BeINSport, however, seem likely to compete with Fox for the next Champions League rights deal, which should drive the price up.)

Meanwhile, if you plan to keep your pay TV service for the next decade, you’ll be chipping in for all the rights deals listed above. Your total subscriber fees paid to Fox Sports 1 over that 120-month span? $134.40. That doesn’t seem like much, but when 90 million homes are putting that much cash into the till, it adds up very quickly.

There are three big questions for Fox Sports 1 as it approaches its launch date:

  1. How ambitious will Fox be with this network? Fox’s broadcast network wasn’t taken seriously until Rupert Murdoch dropped $1.58 billion on the NFL. Could he do it again by throwing billions at the NBA to bring it to Fox Sports 1? Or will the network stand pat with its current properties and pursue less expensive propositions such as soccer, which is still growing in America?
  2. How soon will Fox Sports 2 come online, and how much will that channel cost? If it’s one-third of what Fox Sports 1 costs and gets into just as many homes, Fox Sports 2 could bring in an additional $3 billion to $4 billion over ten years and provide space for additional sporting events — not enough for the NBA, but possibly enough for a larger share of Big Ten sports. (Fox owns a 49% share of the Big Ten Network.)
  3. How much would cord-cutting impact Fox Sports 1? We examined how cord-cutting would impact ESPN in this piece. Using similar tables, we can determine that if 10 million homes that would get FS1 cut the cord before the end of the decade, Fox could miss out on up to $400 million in subscriber fees. If 20 million homes cut the cord by 2020, that figure could reach as high as $750 million. That might not seem like a deal breaker for Fox, given that $1.5 billion chunk of change mentioned above, but to paraphrase Max Cherry, $750 million will always be missed.

Still, in order to be in a position to miss that $750 million, Fox has to finalize those deals with DirecTV, Dish Network, and Time Warner Cable. Only then can FS1 start collecting some of that $12.1 billion it’s seeking from pay TV customers. And the numbers game continues…

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Check out our previous coverage of Fox Sports 1 here. Then visit our home page to find out how much of your cable bill funds big-time pro and college sports every year.

Filed Under: Fox

2 Responses to Fox Sports 1 Will Add $0.57 To Your Monthly TV Bill

  1. What a rip off as if were not already being Rape by fees here and fees there. I’m sick of it now! I already pay $190 plus for Satellite television as it is.

    • Have you thought at all about why you’re paying $190/month for satellite TV? That’s $2,280 a year! Do you really watch that much TV?

      Consider this: You could get a TiVo Premiere with lifetime service for $548, an amplified Mohu Leaf antenna for $75, a Roku 3 for $99, a year of Netflix for $95.88, a year of Hulu Plus for $95.88, and a year of Amazon Prime for $79. That’s $992.76 total, which translates into $82.73 per month — roughly 43.5% of what you’re paying now for satellite TV. That gives you access to all your local channels, plus all the on-demand video you could possibly want. Even if you wanted to keep up with half a dozen new cable TV shows, you could pay for them a la carte and still come out way ahead. Even if you needed a new router to connect your TiVo and Roku to the Internet, you’d still be paying a lot less in the first year.

      What’s more, after the first year, your only regular monthly/yearly costs would be Netflix, Hulu Plus, and Amazon Prime. These things cost only $270.76 a year.

      What do you lose in this equation? Some live sports and HBO. For the money you’ll save, though, you could just as well find a bar to watch the games you *really* wanted to see, and besides, there’s still a lot of pro and college football on broadcast TV.

      Think about it.

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