November 21, 2012
The Big Ten expands to the East Coast, bringing along the television network it co-owns with Fox. News Corp., Fox's parent company, announces it will buy a 49% stake in the YES Network, a new sports channel likely to launch next year. What's it all about? Look no further than your DVR.
Viewers these days routinely record their favorite shows to watch later, often zipping through the commercials that are critical to network profits. But fans love to watch sports live, which has created opportunities so valuable networks will go wherever there are viewers to be found. There are millions of them in the New York-Washington D.C. corridor who, with the addition of Maryland and Rutgers to the Big Ten, may find themselves tuning into the conference network. Or YES Network for New York Yankees and Brooklyn Nets games. Either way, it's Fox.
Big Ten Commissioner Jim Delany isn't the only one smiling at the potential of more millions flowing to his membership. It's also a major move for the conference's network partner in the fierce battle for television sports supremacy. "No question, everyone has been trying to figure out a counter-punch to ESPN," says Paul Swangard, who oversees sports business studies at the University of Oregon. "We see Comcast getting into the ring and this is Fox getting into the ring in a clash of media titans. And it's all driven by sports being the king of media content." Victory requires getting televised sports in front of consumers - and that means having more than one channel to attract them. ESPN, which charges cable operators a TV industry high of more than $5 per subscriber, has used its powerful brand to bundles its new channels.
Fox's BTN will try to turn Maryland and New Jersey into so-called footprint markets, like the nine states that already have Big Ten schools. Of the 53 million households now getting BTN, about 19 million households are in those states. In the network's footprint states, cable operators pay about 80 cents per TV subscriber and give BTN broader exposure by including the channel on basic cable. In non-footprint states, operators pay about 10 cents per subscriber and usually relegate the channel to a pay tier. "Having those two schools on board and the other Fox TV assets piggybacking on top of BTN could help drive new subscriptions in those two states," says Los Angeles-based sports business consultant David Carter.
Matt Polka, president and CEO of the American Cable Association, which represents about 900 small and medium-sized independent cable operators, sees BTN's efforts in Maryland and New Jersey as another example of non-sports fans having to help shoulder the cost of TV sports. Polka suggests cable operators have to try to push the cost of TV sports onto consumers, meaning everyone has to pay, "whether you're the 75-year-old widow or 25-year-old sports fanatic." Delany, when asked by USA TODAY Sports on Tuesday if BTN will move to charge cable operators more in Maryland and New Jersey, said only that as current cable TV deals expire "we'll have discussions, and I'm sure those discussions will be constructive."
On Thursday, BTN declined comment other than a statement from president Mark Silverman: "BTN welcomes Rutgers as the latest addition to the Big Ten Conference. Fans of both the Scarlet Knights and the Maryland Terrapins around the world can look forward to unprecedented coverage of their teams and sports." Karen Weaver, a sports management professor at Drexel who wrote her doctoral dissertation on the Big Ten Network launch, suggests "it's too early to tell" if the BTN expansion will cause cable bills to rise in Maryland and New Jersey, but she says it gives Fox another card to play as it tries to increase its leverage with cable operators by bundling channels: "No question."
Weaver does see a "battle" with Fox trying to get BTN carried by cable operator Comcast, which mainly backs its own sports channels. Yet Fox's acquisition of YES, along with the BTN's impending march east, should help Fox when it launches its new national sports channel. Fox already has 20 regional sports channels. Unlike cable sports channels that are supported by broadcast networks, such as NBC Sports Network and CBS Sports Network, Fox has plenty of event programming that it could bring to a new general sports channel. It recently extended its Major League Baseball and NASCAR TV rights, added Pac-12 and Big 12 games, FUCI mixed-martial arts and soccer World Cups. Says Neal Pilson, a TV sports consultant who's an ex-head of CBS Sports: "The more powerful platforms you own, the more leverage you have in negotiations. It's like a rising tide, all the ships come up." USA Today
Chris Matthews said he was relieved that there was a clear winner and not a lot of drama surrounding the presidential election results. We spoke with the Nicetown native and MSNBC host Monday at a Philadelphia Style party at Barclay Prime (237 S. 18th). Matthews is on the cover of the new issue. At the event, he mixed and mingled, posed for photos and talked politics. Guests included Chris' brother, Montgomery County politician Jim Matthews; Philadelphia City Councilman Kenyatta Johnson; state Sen. Larry Farnese; Fox 29's Mike Jerrick; restaurateur Stephen Starr, owner of Barclay Prime; and real-estate mogul Allan Domb, a partner in Starr Restaurants. Philadelphia Daily News
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