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Can Fox Sports 1 Challenge with ESPN's Dominance?

  +Follow August 23, 2013 8:14AM
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Since its inception in 1979, it has become almost a religious routine for the average american male to watch ESPN’s flagship sports new program, SportsCenter. It has been so deeply engraved into the lives of sports lovers that many have trouble sleeping without having the soothing voices of sportscasters in the background of their rooms.

ESPN has dominated the sports world with little to zero competition for over 30 years. Annually, the company rakes in $9 billion for its parent company, The Walt Disney Company (DIS) , and its closest competition has been itself, ESPN2.

However, FOX Sports, owned by 21 Century Fox Inc (FOXA) , has taken up this seemingly impossible challenge and has a fighting chance against the colossal ESPN.

On Aug. 17, FOX Sports turned off their SPEED motor racing channel and launched a new cable TV channel called Fox Sports 1. The channel is dedicated to broadcasting sports programs 24 hours a day.

Fox Sports 1 has armed themselves with an impressive lineup of TV talent. Regis Philbin headlines the cast of TV talents and has his own show called Crowd Goes Wild. Fox Sports Live, the sports news program set to rival ESPN’s SportCenter, is hosted by Jay Onrait and Dan O'Toole. The Canadian duo is an interesting hire and although they are beloved in Canada, they will have to win their American audience over.

In addition, Fox Sports has added a panel of famous athletes including Andy Roddick, Gary Payton, Donavan McNabb, and Ephraim Salaam. Former ESPN sports personality Charissa Thompson has crossed over to Fox Sports to join the panel. 

With over 35 years of experience ESPN knows exactly how to feed into their audience’s appetite. Their programs serve the viewers with a well-balanced diet of reporting, analysis, and highlights. However, with no true rival before, it is hard to say whether the audience really enjoy ESPN or is just left with no other choice to satisfy their sports craving.

Fox Sports 1 has the chance to become the alternative option to ESPN for sports fan. However, it has a lot of ground to make up and their debut has casted doubts in some minds.

ESPN has a tremendous lead over FOX Sports 1 and currently demands $5.40 per subscriber. To put that in perspective, the former Fox SPEED channel was getting a mere 20-25 cents per subscriber and Fox Sports 1 now aims to charge 60-80 cents per home.

Fox Sports 1’s greatest edge over ESPN is not its fresh take on sports, its humorous segments, or the talentened cast; it is the willingness to spend big money in order to secure licenses to live sporting events.

Fox Sports 1 has taken the right steps by beating out ESPN and NBC and claiming the U.S. Open broadcasting rights. In addition, FOX signed a $4 billion contract with Major League Baseball that will allow them to broadcast baseball games starting in 2014. UFC Fight Night that aired on Aug. 17 boosted the channels ratings and drew in almost 1.8 million viewers. 

What matters most to the audience is not the highlights, debates, and analysis, but watching the actual live game. If Fox Sports 1 can continue to possess media rights to the major sporting events, then ESPN might have finally found themselves a real fight.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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  +Follow August 23, 2013 8:14AM
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