Fox Sports 1 launched over the weekend, giving Fox the cable sports partner it thinks can eventually dethrone ESPN from its self-appointed position as the Worldwide Leader in Sports. Fox Sports 1 has understandably attracted attention, and because it has broadcast rights fees for major sports like the NFL and Major League Baseball and for rising sports like the Ultimate Fighting Championship, FS1 may indeed be able to give ESPN a run for its money in the not-so-distant future.
A bigger challenge may be looming for ESPN, though. And this one might not just challenge the biggest sports cable network in existence but also the very sports broadcasting landscape. That challenge is Google, whose chief executive officer, Larry Page, this week met with a group of NFL officials that included commissioner Roger Goodell. Among the subjects: the NFL’s Sunday Ticket TV package that allows subscribers to choose from any of the NFL’s Sunday afternoon games, and Google’s interest in buying the rights to it once the NFL’s current deal with DirecTV expires in 2015, All Things D’s Peter Kafka reported Tuesday.
Google’s entry into the world of live sports programming wouldn’t be all that shocking. Google has, as Kafka noted, been toying with TV without really jumping in with both feet. Going after the Sunday Ticket package would change that, and for a company with its reach and balance sheet, the current $1 billion cost certainly isn’t prohibitive.
Fox Sports 1 may seem like the immediate threat to ESPN’s empire, but its companies like Google, Netflix, and Apple that likely worry ESPN executives the most, and the reasoning for that isn’t all that difficult to understand: we pay a lot of attention to personalities and original programming and gimmicks that take place on ESPN (and that will take place on FS1), but those are all just side dishes to the main course, which is broadcast rights. Nothing matters more than the ability to show live sporting events, so ESPN has shelled out billions of dollars in the last year to lock up the rights to major conference football, the new BCS playoff, Monday Night Football, the NBA, and tennis tournaments like the U.S. Open and Wimbledon. It’s why Fox Sports 1, with its rights to the NFL, World Cups, Major League Baseball, and UFC, is a bigger threat to ESPN than NBC and CBS’ sports-specific networks have been thus far.
For evidence, look no farther than the fact that on its first weekend, Fox Sports 1 drew high ratings on its live broadcast of a UFC fight and low ratings on most of its in-studio programming. Hiring Keith Olbermann and Regis Philbin and people who will yell at each other and promote “jockularity” makes headlines. Live events bring immediate eyeballs and big cable subscriber fees that pay the bills.
The way people are watching sports, though, is changing, and that’s why Google’s entry into live sports broadcasting could cause a major shift in the world of sports. For one, Google already has substantial broadcasting infrastructure in place thanks to its acquisition of YouTube, which has used not just for rebroadcasts but for live-streaming too. Secondly, it’s rolling in money. If the NFL wants a bidding war over Sunday Ticket rights to drive up prices and if Google is serious about jumping into the game, money isn’t going to be a factor. This is a company that spent $13 billion to enter the telecoms market with Motorola. A billion-plus isn’t going to scare it off of the possibility of live sports programming — especially not if it’s the NFL.
ESPN knows that, in large part because it’s been getting into the live-streaming business with increasing frequency itself. WatchESPN gives cable subscribers a way to stream sporting events on their computers or mobile devices, and ESPN’s partnership with AppleTV could be read, in one way, as an attempt to work with Apple in the future instead of competing against it. Those business models will only expand: it isn’t hard to imagine ESPN selling WatchESPN subscriptions outside of its normal cable deals if the broadcasting landscape continues to change.
And that landscape will continue to change. Whether Fox Sports 1 becomes the challenger we expect to be or not, new competitors are entering the live broadcasting frontier. When they do, they’ll be bringing deep pockets and cavalier checkbooks with them. ESPN and Fox both have their most important rights deals locked in for the foreseeable future. When the online companies get involved, though, it’ll be a whole new ball game — one that will force networks like ESPN and Fox to continue innovating and making the viewing experience and options better for sports fans everywhere.