Fox Sports 1 Execs Reveal Strategy to Take on ESPN (Q&A)
A version of this story first appeared in the Aug. 2 issue of The Hollywood Reporter magazine.
On Aug. 17, Rupert Murdoch's 21st Century Fox will launch Fox Sports 1 in about 90 million U.S. homes -- the largest cable channel startup, by audience size, in history. The well-funded move represents perhaps the most significant challenge yet to ESPN's dominant $9 billion a year business and joins upstart networks from CBS and NBC in pursuing DVR-resistant sports content. Shepherding the launch are Los Angeles-based Randy Freer and Eric Shanks, co-presidents and COOs of Fox Sports Media Group.
The veteran duo -- Shanks, 40, was the youngest president of a network sports division when he joined Fox Sports Networks in 2010 at age 38; Freer, 53, became president of FSN in 2007 -- have been spending hundreds of millions of dollars acquiring broad TV rights since at least 2011 from the NFL, Major League Baseball, Pac 12, UFC, FIFA World Cup Soccer and others. The goal with Fox Sports 1 (and a sister network that will replace Fox-owned Speed Channel) is to create a lighter, less serious alternative to "Worldwide Leader" ESPN, an ethos that former Fox Sports chief David Hill (now running American Idol) called "jockularity." "Everything has to have Fox attitude," says Shanks. "And everything has to be fun."
The Hollywood Reporter: There are more sports on TV than ever. Will the audience for Fox Sports 1 justify the huge expense?
Randy Freer: When you go back to when there was CNN, and Fox News and MSNBC launched, the marketplace expanded. Today, the sports marketplace has expanded rather dramatically, so there's lots of room to exploit that.
Eric Shanks: If you don't have a multisport national outlet, you don't really have the ability to compete for the rights packages out there. That was one of the deciding factors. You need to have shelf space on a national sports network.
THR: How will FS1 be different from ESPN?
Freer: This is not about Fox Sports 1 versus ESPN, NBC or anyone. This is about the collective Fox Sports, on the broadcast network, NASCAR, baseball, football, all of it. FS1 is the national cable side of a fully distributed sports network along with our local businesses, our digital operations and other things that go with it.
Shanks: We have always lived by the mantra that we're going to coat the information pill with a little bit of entertainment. That's still the key because sports fans, no matter what age they are, want to sit down at night and get caught up. The highlights can be presented a certain way, the discussion can be a certain way, and I think that's where the Fox attitude does come in. Fans know when they see the Fox Sports shield that they are going to get something that is probably a little bit different, done a different way, with on-air talent you really want to sit down and have a beer with, and you're going to have a little bit of fun.
THR: One recent study said only about 4 percent of viewers actively watch sports, but every cable subscriber pays for them. FS1 will only put more pressure on distributors to raise prices, right?
Freer: I would like somebody to question where that 4 percent came from because there is no contextual value to it. Look, the Fox channels today, among men 18 to 49, reach close to 60 percent of all men in the country on a monthly basis. ESPN is reaching probably 50 to 55 percent of men. At the Sun Valley conference, Barry Diller threw out something claiming only 10 percent of the people who have ESPN watch ESPN. He had no facts, no ability to back it up.
THR: There has been a lot of discussion about switching the way cable TV is sold -- allowing consumers to pick and choose channels to cut costs. Your take?
Freer: Let's look at that option. In general, you can sit in your home any time of day and watch whatever you want to watch. I can watch sports, I can watch movies, I can watch TV shows, news, whatever and it all costs $75 or more. I think that's an unbelievable value. I have a bunch of friends who are single, don't have any kids, are we going to stop them from paying for Nickelodeon? Are they going to separate out Cartoon Network? The entire noise around the cost of cable is, to me, overblown. It's misleading and it apparently does not look at the value that's created and the choice that's created by the product that is out there.
Then look at the percentage of the bill. Take a dollar and you've got 30 to 35 percent coming off the top for profit to the cable companies, which I guess is their right. You have another 10 percent for administrative and other things. You have another 10 percent in fees. You ultimately have only about 40 to 45 percent of the total bill that is programming, and we think sports is probably in the 15 percent range of that.
THR: Why did Fox lose the L.A. Dodgers TV rights to Time Warner Cable?
Freer: Look, deals are deals. They get complicated. In the end, it wasn't that hard because the Guggenheim folks [owners of the Dodgers, THR and more] were very clear about what they were trying to achieve. We were pretty clear on what we could do. We weren't able to marry those two, and they did what they needed to do with someone else -- who, by the way, is a distributor that complains first and foremost about the cost of sports rights.
THR: Didn't Fox try to start a national sports network to take on ESPN years ago?
Freer: That's not exactly right. In 1997, we were partners with TCI and Cablevision and created our collection of [regional sports networks]. Nationally, we had a program we attempted to syndicate called, I think, Fox Sports News. We had a belief that at its core, sports was local and we could grow a national programming service on the back of that local business. That didn't turn out the way we hoped. We realized it's hard to serve two masters. That particular program was neither fish nor fowl. It wasn't national to the best extent it could be on either side. So when you can't be the best, you are somewhere in between. We felt at that time we had to change our focus to be as local as we could.
THR: Many of your talent hires so far have been mostly unknown or untested. Who will be front and center?
Shanks: The base we have to work from includes all the people who are part of the Fox Sports family now -- Terry [Bradshaw], Howie [Long], Jimmy [Johnson], Strah [Michael Strahan], Troy [Aikman], Curt [Menafee], Jay [Glazer], Mike Pereira, Joe Buck, Erin Andrews. They're going to be with us. Then we will have new folks. We've kept an eye out for fresh faces, and we've put some established faces in fresh roles, like Regis Philbin. We will bring on Donovan McNabb, Gary Payton, Andy Roddick. We've got [personalities] Jay and Dan from Canada. The prime minister said it was a dark day for Canada when they left.
THR: Will FS1 cover more than the games and scores? For instance, how much of athletes' personal lives will you get into?
Shanks: We are investing in a 24/7 news operation. We will cover events as news whether it's our event or not. Take the British Open. Obviously next year we will have a presence and coverage from around the course. We won't have a pregame, but we will have coverage. First and foremost, we want to present both sides of the story. Secondly we live in this age -- even as we sit here, I've had alerts, pop-ups -- [where] there is an explosion of different voices in sports. Sports fans don't just have talk radio. They have all this information coming at them from all different directions -- Twitter, blogs, established journalistic outlets -- people talking about what's interesting in sports, not just what some editor somewhere has decided is important. No made-up, fabricated stories just based on what an editor feels. We want to be on the pulse of what fans are actually talking about, and provide context or even a different point of view.
THR: Soccer looks like it will be an important part of FS1, and Fox is reportedly looking to launch its own global soccer league. Is that moving forward?
Shanks: Our international guys are looking at a summer tournament, not specifically a league.
THR: There are Fox sports channels all over the world. Will you coordinate with them and share rights?
Shanks: That is usually not the case because rights are for specific territories. Where coordination comes in is on things like branding, presentation, brand philosophy. There may be some shoulder programming that crosses over in certain territories. Shoulder programming means things like our late-night news, Fox Sports Live -- certain elements of that. We do share footage, features, and certain shows.
Freer: We truly are the only company out there -- certainly in sports -- that has a global reach. Others don't have distribution platforms like Sky Italia, Sky in the U.K., Sky Deutschland, and other platforms around the world. We are the only ones in Asia, Italy, Germany, Latin America and others parts of the world. That's one of the exciting things about 21st Century Fox. Somebody who is looking to expand globally can come to us because we're a place they can do it under one umbrella. We can coordinate and create real value across the globe.
What sports do you play personally?
Freer: On weekends I mostly spend as much time as I can with my wife and two daughters, whether it's a horse show or horse riding or skiing. I grew up a fan of the New York Giants and loved sports.
Shanks: In high school, I played football, baseball, wrestled and played a bit of soccer. I never ended up graduating college, so this was the only business that would actually take me. (Laughs.) I love everything about it. I grew up a farmer. When you wake up as a farmer every day you never know what the day is going to hold. And it's the same thing in sports.