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Fox Prepares 6-Year, $1.5 Billion Deal With Big Ten

It's B1G!Fox Sports is putting the finishing touches on a new TV rights deal with the Big Ten Conference, which would begin in 2017, according to Sports Business Daily.

The six-year deal is reportedly worth $250 million per year and would include half of the Big Ten’s Tier 1 rights package, which would include 25 college football games and 50 college basketball games per year on both FS1 and Fox’s broadcast channel. ESPN is currently paying $100 million per year for all of the Big Ten’s Tier 1 package.

This deal comes less than two months after reports that Fox Sports was planning to cut $250 million from its operational costs by buying out or laying off its longtime employees. Now we know where that money is going.

This deal also comes amid reports that cord-shaving is cutting into Fox’s carriage fee income, with all 21st Century Fox networks losing a combined 0.9% of their subscribers in March — a small number compared to Disney’s 3.6% subscriber loss, but one that might be bolstered by Fox Sports 2 surpassing the 50-million subscriber mark.

Regardless, Fox is making it clear to all carriers that this deal adds value to FS1 — which means the asking price for the network will go up next year, though it remains to be seen by how much. According to SNL Kagan, FS1 receives $0.99/month per subscriber, and the most recent published Nielsen reports put FS1 in more than 84 million homes.* That’s roughly a billion dollars per year, which just about covers for Fox Sports’ four biggest rights deals:

  • Major League Baseball ($500 million/year through 2021)
  • NASCAR ($300 million/year through 2022)
  • The Big 12 Conference ($90 million/year through 2025)
  • The Pac-12 Conference (~$110 million/year through 2024)

Fox also pays $90 million per year for UFC, $53.1 million/year for FIFA competitions (including the Men’s and Women’s World Cups), and $30 million for Major League Soccer. Tacking on another $250 million per year practically guarantees that FS1 will demand a higher carriage fee, which will undoubtedly be tacked on to your cable and satellite TV bills.

It’s worth noting that Fox also struck a deal recently with Sling TV. The result of that deal is a new $20/month package from Sling TV that puts Fox’s broadcast network, FS1, FX, and a Fox regional sports network (where applicable) with Turner, AMC, and A+E Networks channels, but removes all Disney channels, including ESPN and ESPN 2. The package does not include Fox News or FXX. More importantly for Big Ten fans, it does not include the Big Ten Network, either. 

Sling TV’s new Fox-centric bundle might appeal to fans of local sports teams who want access to a Fox RSN without paying much for anything else. (Yankees fans stuck in the YES Network-Comcast carriage battle might take note.) For Big Ten fans looking to ditch their cable or satellite TV service, however, Sony’s new PlayStation Vue service might end up being a more compelling offering overall — especially if ESPN gets the other half of the Big Ten Tier 1 rights, which is the most likely scenario. PlayStation Vue is still a bundle, though, which begs the question: is a cord-cutter who gets Sling TV or PS Vue really cutting all that much?

* – Nielsen numbers on cable households in 2016 have been incredibly difficult for the general public to obtain. Those numbers will be reported here as soon as they are uncovered.

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