Fox Bets. Will UFC Win?
It's done, and just in the nick of time. With about 72 hours to go until an embarrassment of Crystal Pepsian proportions, the deal got done for Fox Sports 1.
On Saturday, that means fights. But what does it mean today? One thing it means is that Fox took a heck of a hit in opportunity cost.
Fox Sports 1 has attractive programming scheduled beyond UFC. On Saturday night, Fox imports Dan O'Toole and Jay Onrait, witty ex-anchors of TSN SportsCentre, for the nightly highlight show, "Fox Sports Live". On Monday afternoon, Regis Philbin begins a studio show, "Crowd Goes Wild". And one week from next Thursday, Fox Sports 1's marquee property (sorry, UFC), college football, kicks off.
The problem is that they're all too late. Today, O'Toole and Onrait don't mean squat. (sorry) And Regis means even less. (not sorry) College football means something, but that is two weeks away. And the sum total of all of it is too close to nil in the game of chicken that Fox was playing with DirecTV and company.
Without leverage, Fox was faced with a choice: cave or go dark (in half the country, anyway). They chose to cave. After reportedly asking for $0.80 per subscriber each month, they took $0.23. Yes, Fox can renegotiate when contracts end and yes there is value in avoiding a piecemeal launch, but that's a lot of effin' money. Add it up for 90 million subscribers and that's about $50,000,000 down the tubes each month. To put it another way: from the time of the Fox Sports launch date to the time of the first live UFC show on Fox Sports 2 (on October 26), Fox will lose more in opportunity cost than WCW lost in its entire existence.
Fox could have gotten more than $0.23. NBCSN, which has executives giving interviews about how they're not even trying to compete at the top level of sports channels, gets $0.31 per subscriber each month. If Fox would've waited until the satellite and cable providers started feeling the threat of missing college football games in two weeks, they would have almost certainly drawn more than twenty-three cents. But they didn't.
And why didn't Fox stay firm? Part of it was surely to avoid ridicule from pundits and anger from viewers. Another reason why was UFC.
A Fox Sports 1 launch without DirecTV, Dish Network and TimeWarner Cable (which means Brighthouse Networks as well, as their deals are tied to TWC's) would have been a slap in the face to UFC. Dana White and company pulled a high end pay-per-view co-main event (Sonnen vs. Shogun) and gave it to Fox Sports 1 because Fox promise a big media push. The push was there, no doubt. But if half the nation's pay TV subscribers would have been kept in the dark it would have shown disloyalty from Fox.
As bad as it would have been for UFC to give up a good pay-per-view fight and have nobody watch it, it would have been worse to have tons of people watch it without subscribing to Fox Sports 1. Because that means streaming. Illegal streaming is one of those activities that a lot of people feel conflicted about, but that conflict tends to wash away with familiarity. Having a million or so UFC fans who know that there's a big fight on August 17 and know that the only way to watch it at home is via piracy could've snowballed. Those same fans might have been tempted to save a little money the next time a pay-per-view came around.
All of this is not to say that the Fox Sports 1 launch is perfectly peachy for UFC. The channel launch has problems, and it's too late for UFC to avoid being a windbreaker. Most sports fans don't know what number channel FS1 is, and they failed to acquire any studio talent with a name that moves the needle. Fox should have beefed up the quality of its FoxSports.com content, but instead they lost their best columnist. Plus no out-of-the-box ideas were attempted. An FS1 "preview" baseball game on big Fox? O'Toole and Onrait visiting a broadcast booth? Nothing.
Adversity can be the patriarch of opportunity, and for UFC it is no different. If Chael and Shogun somehow draw good demo numbers and lots of viewers, then they'll be the saviors. Fox will remember how the folks from Zuffa erased their mistakes. Other networks will take notice as well. And when the time comes for Dana and the Fertittas to negotiate their next television contract, Fox's big gamble will pay off for UFC.
On Saturday, that means fights. But what does it mean today? One thing it means is that Fox took a heck of a hit in opportunity cost.
Fox Sports 1 has attractive programming scheduled beyond UFC. On Saturday night, Fox imports Dan O'Toole and Jay Onrait, witty ex-anchors of TSN SportsCentre, for the nightly highlight show, "Fox Sports Live". On Monday afternoon, Regis Philbin begins a studio show, "Crowd Goes Wild". And one week from next Thursday, Fox Sports 1's marquee property (sorry, UFC), college football, kicks off.
The problem is that they're all too late. Today, O'Toole and Onrait don't mean squat. (sorry) And Regis means even less. (not sorry) College football means something, but that is two weeks away. And the sum total of all of it is too close to nil in the game of chicken that Fox was playing with DirecTV and company.
Without leverage, Fox was faced with a choice: cave or go dark (in half the country, anyway). They chose to cave. After reportedly asking for $0.80 per subscriber each month, they took $0.23. Yes, Fox can renegotiate when contracts end and yes there is value in avoiding a piecemeal launch, but that's a lot of effin' money. Add it up for 90 million subscribers and that's about $50,000,000 down the tubes each month. To put it another way: from the time of the Fox Sports launch date to the time of the first live UFC show on Fox Sports 2 (on October 26), Fox will lose more in opportunity cost than WCW lost in its entire existence.
Fox could have gotten more than $0.23. NBCSN, which has executives giving interviews about how they're not even trying to compete at the top level of sports channels, gets $0.31 per subscriber each month. If Fox would've waited until the satellite and cable providers started feeling the threat of missing college football games in two weeks, they would have almost certainly drawn more than twenty-three cents. But they didn't.
And why didn't Fox stay firm? Part of it was surely to avoid ridicule from pundits and anger from viewers. Another reason why was UFC.
A Fox Sports 1 launch without DirecTV, Dish Network and TimeWarner Cable (which means Brighthouse Networks as well, as their deals are tied to TWC's) would have been a slap in the face to UFC. Dana White and company pulled a high end pay-per-view co-main event (Sonnen vs. Shogun) and gave it to Fox Sports 1 because Fox promise a big media push. The push was there, no doubt. But if half the nation's pay TV subscribers would have been kept in the dark it would have shown disloyalty from Fox.
As bad as it would have been for UFC to give up a good pay-per-view fight and have nobody watch it, it would have been worse to have tons of people watch it without subscribing to Fox Sports 1. Because that means streaming. Illegal streaming is one of those activities that a lot of people feel conflicted about, but that conflict tends to wash away with familiarity. Having a million or so UFC fans who know that there's a big fight on August 17 and know that the only way to watch it at home is via piracy could've snowballed. Those same fans might have been tempted to save a little money the next time a pay-per-view came around.
All of this is not to say that the Fox Sports 1 launch is perfectly peachy for UFC. The channel launch has problems, and it's too late for UFC to avoid being a windbreaker. Most sports fans don't know what number channel FS1 is, and they failed to acquire any studio talent with a name that moves the needle. Fox should have beefed up the quality of its FoxSports.com content, but instead they lost their best columnist. Plus no out-of-the-box ideas were attempted. An FS1 "preview" baseball game on big Fox? O'Toole and Onrait visiting a broadcast booth? Nothing.
Adversity can be the patriarch of opportunity, and for UFC it is no different. If Chael and Shogun somehow draw good demo numbers and lots of viewers, then they'll be the saviors. Fox will remember how the folks from Zuffa erased their mistakes. Other networks will take notice as well. And when the time comes for Dana and the Fertittas to negotiate their next television contract, Fox's big gamble will pay off for UFC.
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