Built on the idea that “sports are tribal,” Fox Sports Net was launched more than a year ago to provide extensive home-team coverage combined with the kind of cutting-edge production quality associated with national network broadcasts.
Launched at a cost of more than $1.25 billion, the network reflects the vision of News Corp. chief Rupert Murdoch, who believes that sports represents one of the last types of programming that can attract a mass audience.
With 1,300 employees, Fox Sports Net is the U.S. telecasting arm of the worldwide sports alliance formed in 1995 between News Corp., Liberty Media, and cable giant Tele-Communications Inc. In addition, Rainbow Media Holdings, a subsidiary of Cablevision Inc., joined the alliance last year, and there are numerous smaller companies that own part or all the affiliated regional networks.
Together, Fox and Liberty own and operate 10 regional sports networks around the country, including Fox Sports West and Fox Sports West 2 based in Los Angeles, which were re-launched under the Fox Sports Net moniker in 1996.
In addition, there are six regional networks co-owned by Fox/Liberty and Rainbow Media Holdings, and six other networks owned by various parties that have affiliate agreements with Fox Sports Net.
All told, Fox Sports Net’s regional networks provide more than 3,000 hours of live programming each year, covering more than 1,200 events nationwide and reaching 58 million homes ? representing 57 percent of TV households nationwide.
The idea is to capitalize on fans’ home-team loyalties instead of simply providing national coverage like ESPN and the broadcast networks.
The two local Fox operations, for instance, offer home-game coverage of the Lakers, Kings, Angels and Dodgers.
“There were a lot of stumbling blocks to implementing this idea,” said Tracy Dolgin, chief operating officer of Fox Sports Net. “We’ve added 60 million degrees of complication. It’s a lot of mechanics to get all those (game) schedules together.”
“I think it’s a good long-term strategy they’re using,” said Steve Cesinger, head of the entertainment group at investment bank Greif & Co. “If you talk to sports fans, one of their complaints is that they have foisted on them national games they don’t want to see, but can’t get access to the local teams they do want to see.”
Los Angeles is the only region with two separate Fox sports networks. Fox Sports West 2 had a stormy launch last year, with many local cable systems reluctant to carry the new channel.
“Cable companies were afraid they’d have to jack up the cost of basic cable,” said David Carter, a sports management consultant who teaches sports finance at the USC Graduate School of Business. “(They felt) Fox was trying to make more money by adding a second network.”
Most of those issues have been resolved. In the Los Angeles area, about 65 percent of households have cable, and of these, about 99 percent have access to Fox Sports West and 85 percent can access Fox Sports West 2.
Kathryn Cohen, general manager of Fox Sports West and West 2, said the company added the second network because “we were just jammed with product.”
Cesinger says there are some “wild cards” yet to be played out, such as satellite and Internet sports programming, which could prove formidable competition in the future.
“There are definitely risks,” Cesinger said, noting out that the Internet will not only enable fans to watch sports, but buy merchandise. “The problem is that it’s such a fast-evolving market,” he said.
But Cesinger said he believes Fox is well positioned to negotiate with whatever emerges as the delivery option of choice ? largely because it is also getting into the content business by acquiring teams like the Los Angeles Dodgers.
