Sports and television were not always seen as a winning combination. Prior to the first televised sporting event, a college baseball game between Princeton and Columbia on May 17, 1939, televised sports was strongly opposed by owners and other sports industry decision makers. The prevalent sentiment among powerful sports executives was that showing games on television would lower attendance. Thus the owners and teams would lose out on gate receipts, concessions, and merchandise at the stadium. However, as time went by, television became an integral part of the sports landscape. Television serves as a way for fans to stay connected with the team at all times, without having to physically be at the game.
Today, sports are some of the most watched events on television and the owners’ fears from yesteryear are somewhat coming to fruition. The quality of sports programming is top notch. Live sporting events are among the best marketing tools for advertisers in any industry. Sports attract the coveted male 18-49 demographic, and sports give advertisers a key advantage over other programming; sports are practically DVR proof. Nearly 45 percent of American households have DVR’s now and sports are almost immune to it. When it comes to sports, fans do not want to watch the game after they know what happens, and in today’s media landscape it is almost impossible for you NOT to find out a score; whether it’s through Twitter, Facebook, mobile updates, or just the guy walking down the street, the world of sports is always happening “in the now.”
Since sports broadcasts are such an advantage from an advertising revenue standpoint, networks are spending top dollar for the rights. The NFL is making nearly $6B per year in total revenue from broadcast rights sold to CBS, NBC, FOX and ABC (Monday Night Football on ESPN). The individual price tags are huge for each network because they sell commercial advertisement space at premium prices. But even with the high price of advertisements, these networks lose money on the NFL. The real value for these networks is being able to advertise their other programming and draw viewers to those shows.
The king of cable television is the Worldwide Leader, ESPN. If you have ESPN, about five dollars out of your cable bill is going directly to ESPN. The subscriber fee is nearly three times as large as the next highest station. Since its inception in 1979, ESPN has grown into the Goliath of sports media. There have been ebbs and flows throughout its history, but ESPN has remained as the gold standard of sports television. For instance, in the early 2000’s ESPN showed everything from MLB to the NBA to the X-Games to the Great Outdoor Games to Magic the Gathering Tournaments (shout out, Dr. Baker). But while showing this eclectic group of sports (does Magic count?), they faced reduced viewers and brought in John Skipper to head up TV programming. How did Skipper respond? He decided to cut the fat. In the words of current ESPN employee, Jalen Rose, he gave the people what they want. And the people wanted to watch the “big” sports. ESPN focused on the NFL, MLB, the NBA, college football and basketball, and the NHL to a certain degree. They bought the rights to these games (not the NHL) and created entire five-hour blocks of programming dedicated to the games and analysis. He took out watching re-runs of Billiards tournaments that happened three months prior and filled it with talk shows that engaged in conversations about the sports that actually moved the needle. This worked out great for ESPN as their viewership went up, and didn’t work out too bad for Skipper, as he is currently President and CEO. ESPN has thrived in the PTI, Around the Horn, and Skip Bayless era. Moreover, they have quality game broadcasts, which is truly their bread and butter.
Fox Sports 1, which started nearly two weeks ago, poses the first real challenge to the ESPN-dominated sports entertainment television market. However, their start has been inauspicious. Leading up to the launch of the channel, the network did not have widespread distribution due to their demand of charging nearly one dollar per customer. Some cable companies balked at this idea, as it was nearly a 200 percent increase from the Speed channel price of approximately a quarter. At the last second the network budged and settled at a low subscription fee to get into American homes. This was probably the right move, because the network may not have bounced back from being in 60 percent of households. Then after they have good ratings, they can bump the price up.
The problem the first two weeks has been the ratings. The Regis Philbin-hosted “Crowd Goes Wild”… is not making the crowd go wild. It got a .1 rating for the premier episode. I watched an episode and it all seemed forced. There was too much of an effort and not enough ease between the host and co-hosts. Needless to say, Fox Sports 1 is not going to count this show as a stalwart of its network. Also, their counter to “SportsCenter” is called “Fox Sports Live.” The best way to describe this show is a combination of “SportsCenter,” with its two anchors going through highlights, and the “Best Damn Sports Show Period,” with a panel of five discussing topics sporadically throughout the episode. This show is not the caliber of its rival, but has some potential and probably will work through the kinks and become a highly entertaining hour of sports highlights.
Just like with how ESPN regained its dominant market share, Fox Sports 1 will make its money by attracting viewers through its focus on the main sports. Fox Sports 1 promises to provide premium in-depth pregame coverage for NFL Sundays. Also, the network has spent millions to acquire the rights to major college football and basketball games. Fox Sports 1 simply cannot challenge ESPN without game broadcasts. The future of the network will probably be much clearer in the next couple of months, after we are able to see whether or not people are watching games and subsequent programming on FS1.
The moral of the story is that if Fox truly wants to challenge ESPN, the network needs to take a page from ESPN and focus on the main sports that draw the largest crowds and spend a large majority of their programming on those sports. It may seem like the dumbing down of sports, or alienation of alternative preferences, but it’s a surefire way to make money and the only way for Fox Sports 1 to last.