News Corp. to Start Cable-Sports Channel Challenging ESPN

Rupert Murdoch’s News Corp. will start a national cable sports network in August, joining a field dominated by Walt Disney Co.’s ESPN.

Fox Sports 1 will be available to more than 90 million pay-TV homes, New York-based News Corp. said today in a statement.

The channel’s start coincides with the beginning of the college football season. Fox and other major networks have turned to live programming like sports to bolster ratings and draw in viewers, who can easily record other programs to watch later. That’s created a crowd of competitors that also includes NBC Sports and CBS Sports.

“We’re not trying to beat ESPN,” News Corp. Chief Operating Officer Chase Carey said at an investor conference today. “That wouldn’t make sense. Sports is a big huge arena. We’ve proven over the years we can do some interesting and exciting things.”

Bloomberg News reported in March 2012 that News Corp. was developing the sports network.

For News Corp., the challenge will be assembling a lineup of sports events that will draw viewers, and to convince pay-TV systems and advertisers they should pony up for the new network.

“They’ve lined up an impressive amount of sports rights and they appear to be off to a good start,” Derek Baine, an SNL Kagan cable analyst in Monterey, California, said in a telephone interview. “But nobody expects them to be ESPN overnight.”

‘A Cornerstone’

The network will sustain losses as Fox tries to increase the subscriber fee, Carey said. Speed, which Fox Sports 1 will replace, collects 31 cents a month per subscriber on average from pay-TV systems, according to SNL Kagan. The researcher estimates Fox will seek $1. ESPN received $5.13 in 2012.

“Three to five years down the road, it’s a multibillion-dollar asset,” Carey said. “It could really be a cornerstone for us.”

Fox has been signing contracts for the past year, Carey said at the event sponsored by Deutsche Bank. Those include “expanded baseball rights, college football, college basketball, World Cup soccer, UFC -- an array of rights that we put together that didn’t reside anywhere.”

News Corp. has rights to Pac-12 Conference and Big 12 Conference college games and owns at least 20 regional sports networks. The company also has TV rights to soccer’s World Cup in 2018 and 2022.

Yankees Games

Last year, News Corp. agreed to buy 49 percent of YES Network, the biggest regional sports network by viewers, with the option to increase the stake to 80 percent in three years. Fox can carry as many as 18 of its New York Yankees baseball games nationally starting in 2014, Sports Business Journal reported in January. News Corp. owns three of the five biggest local channels, including Fox Sports Southwest and Fox Sports West, according to SNL Kagan.

Fox Sports 1 will air a daily program, “Rush Hour,” with talk-show host Regis Philbin. Former Pittsburgh Steelers quarterback Terry Bradshaw will appear on “Fox Football Daily.” ESPN’s most valuable franchise is the “Sports Center” talk show, Carey said.

“Our real job and challenge is to put together the right portfolio of rights first, and add dimensions that really resonate with consumers.”

News Corp., led by Chairman and Chief Executive Officer Murdoch, is preparing to split into two companies -- a publishing operation and an entertainment business with television and films.

Murdoch, who built Fox News into a cable powerhouse, will be chairman of both companies and CEO of the entertainment company, Fox Group.

News Corp. added 2.4 percent to $30.19 at the close in New York. The Class A shares have climbed 18 percent this year.

ESPN, the dominant sports-cable channel, also faces competition from Comcast Corp.’s NBC and CBS Corp., and regional sports networks from News Corp. and Time Warner Cable Inc.

Before it's here, it's on the Bloomberg Terminal.