Our long national nightmare never really got started, did it?
Fox Sports 1 finalized deals with DirecTV, Dish Network, and Time Warner Cable earlier today, the Los Angeles Times has reported. The two satellite companies combined have 34 million customers in the U.S., while Time Warner Cable still has 11.9 million video subscribers, despite losing almost 200,000 subs (including me) last quarter. Given that they had roughly 45 million homes prior to these deals getting done, that should put FS1 at its launch target of 90 million homes.
The new channel reportedly has a subscriber fee of $0.80/month, which could increase as much as 7.2% per year over the next decade. That means FS1 will bring in $864 million in subscriber fees over the next 12 months. Given the number of advertisers Fox is bringing on board at launch, FS1 could net close to that amount and perhaps more in advertising revenue as well.
Of course, FS1 will need all the ad revenue it can get to make a run at TV rights for the NBA and the Big Ten, the only two major American sports properties whose current TV deals will expire before this decade ends. Several soccer properties, including MLS (2014), the UEFA Champions League (2015), and the Premier League (2017) will also be up for bid this decade.
What’s more, FS1 is entering the market at a time when the pay TV subscriber base is starting to shrink. According to IHS, an estimated 352,000 homes cut the cord in the second quarter of 2013, while another 398,000 ditched cable and satellite in favor of IPTV services from AT&T and Verizon, both of whom will carry FS1. On the other hand, IHS estimates that 100.77 million people will still have some form of pay TV by the end of the year, so the numbers might not be trending downward quickly enough to hurt Fox right away.
If you’re not a sports fan, though, that hike in your cable bill next month might make you ponder joining those 352,000 cord cutters.
Want to see home much of your annual cable bill Fox Sports 1 will funnel into pro and college sports organizations? Check out our home page web app. Also, check out our past coverage of Fox Sports 1 here and here.