it appears so (FS1 and FS2 are not part of the deal) So what will this mean??
http://adage.com/article/media/espn--acquisition-fox-regional-game-changer-streaming/311537/
FOX REGIONAL SPORTS NETWORKS WOULD BE A GAME-CHANGER FOR ESPN
By Anthony Crupi. Published on December 05, 2017.
While investors may be riveted by the implications of the Walt Disney Co.'s impending bid to snap up 21st Century Fox's entertainment assets, the most transformative element of the proposed $60 billion deal could very well be the transfer of Fox's regional sports networks.
Reports on earlier talks did not include the sale of the 22 Fox owned-and-operated RSNs, which distribute local NBA, NHL and Major League Baseball games to roughly half the country's TV markets. According to CNBC's David Faber, Disney and Fox could close ona revised deal, including the sale of the regional sports networks, as early as next week.
Fox's flagship broadcast network and the cable sports nets FS1 and FS2 are not included in the latest offer.
Should the deal go through, ESPN's national cable networks would be supplemented by a clutch of RSNs that serve sports-crazed markets such as New York, Los Angeles, Dallas, Cleveland, Detroit and Kansas City. While the Yankees' YES Network is clearly the crown jewel of the Fox RSN empire (this past season, the Baby Bombers averaged a 3.6 household rating on their home network, which works out to just shy of 255,000 in-market viewers per game), the smaller channels also pack a wallop.
Fox's Ohio-based RSN in 2017 averaged an MLB-high 8.3 rating during its coverage of live Cleveland Indians games, and the same outlet delivered the second-highest local NBA ratings thanks to LeBron James and the Cavaliers.
Fox holds a controlling 80 percent stake in YES Network, the remainder of which is owned by the New York Yankees.
That Fox is willing to part with its lucrative RSN business -- according to SNL Kagan, YES Network alone commands a princely $6.50 per sub per month affiliate fee, quite a premium when compared to the cable industry average of 30¢ a pop -- suggests that the Murdoch family foresees the day when the fundamentals of doing business in local sports markets will outweigh the concomitant financial advantages. The dynamics of cord-cutting/-shaving and younger viewers' ongoing exodus from traditional TV may very well make it impossible for Fox to continue to charge the dizzying carriage fees it currently extracts from cable and satellite operators, which in turn would only exacerbate the spiraling costs of procuring rights to top-tier live sporting events.
Pushback from the operators is nothing new; some 900,000 Comcast subscribers in the Tri-State area missed out on the Yankees' entire 2016 campaign after the cable giant refused to pony up for what it characterized as a 33 percent carriage fee hike. The two sides came to terms in time for the 2017 MLB season.
Which brings us to ESPN. If Fox presumably no longer believes that it can operate at the sort of scale that will allow it to continue to compete with the likes of Bristol, Disney is confident that the addition of the RSN suite will give ESPN a license to print (even more) money. Besides giving it a virtual stranglehold over local sports (the Fox RSNs currently are home base for 44 MLB, NBA and NHL franchises), the acquisition of the rights to an additional 5,500 live events per year would sweeten the pot for fans who may be thinking of signing up for ESPN's upcoming direct-to-consumer streaming service.
While Disney has played its ESPN OTT cards close to the vest, keeping its own counsel on how it will brand, price and program the new service, the infusion of live NBA games could go a long way toward generating greater interest in the initiative. When Disney first announced its OTT scheme, the company said the live content would be limited to MLB, NHL and Major League Soccer games, plus some Grand Slam tennis events and college sports. Of the latter category, it is believed that ESPN does not plan to offer OTT content from the Power Five athletic conferences (ACC, Big Ten, Big 12, Pac-12, SEC).
Back in 1998, Disney shelved plans to establish a West Coast RSN after two of the franchises it had hoped to lure from Fox Sports West elected to renew their carriage agreements. For the better part of the last 20 years, ESPN has shown little interest in carving out a local TV business, although the ongoing migration of MLB and NHL audiences from national to hometown platforms may prove top be another mitigating factor. According to Magna research, 25 percent of NHL fans during the 2016-17 season watched their local teams exclusively on RSNs rather than turn to the national NBC/NBCSN feeds.
As expected, Fox had little to say about today's news. "There's nothing to add to that other than the nothing we've said so far," 21st Century Fox CEO James Murdoch said at Tuesday morning's UBS Global Media and Communications Conference.
http://adage.com/article/media/espn--acquisition-fox-regional-game-changer-streaming/311537/
FOX REGIONAL SPORTS NETWORKS WOULD BE A GAME-CHANGER FOR ESPN
By Anthony Crupi. Published on December 05, 2017.
While investors may be riveted by the implications of the Walt Disney Co.'s impending bid to snap up 21st Century Fox's entertainment assets, the most transformative element of the proposed $60 billion deal could very well be the transfer of Fox's regional sports networks.
Reports on earlier talks did not include the sale of the 22 Fox owned-and-operated RSNs, which distribute local NBA, NHL and Major League Baseball games to roughly half the country's TV markets. According to CNBC's David Faber, Disney and Fox could close ona revised deal, including the sale of the regional sports networks, as early as next week.
Fox's flagship broadcast network and the cable sports nets FS1 and FS2 are not included in the latest offer.
Should the deal go through, ESPN's national cable networks would be supplemented by a clutch of RSNs that serve sports-crazed markets such as New York, Los Angeles, Dallas, Cleveland, Detroit and Kansas City. While the Yankees' YES Network is clearly the crown jewel of the Fox RSN empire (this past season, the Baby Bombers averaged a 3.6 household rating on their home network, which works out to just shy of 255,000 in-market viewers per game), the smaller channels also pack a wallop.
Fox's Ohio-based RSN in 2017 averaged an MLB-high 8.3 rating during its coverage of live Cleveland Indians games, and the same outlet delivered the second-highest local NBA ratings thanks to LeBron James and the Cavaliers.
Fox holds a controlling 80 percent stake in YES Network, the remainder of which is owned by the New York Yankees.
That Fox is willing to part with its lucrative RSN business -- according to SNL Kagan, YES Network alone commands a princely $6.50 per sub per month affiliate fee, quite a premium when compared to the cable industry average of 30¢ a pop -- suggests that the Murdoch family foresees the day when the fundamentals of doing business in local sports markets will outweigh the concomitant financial advantages. The dynamics of cord-cutting/-shaving and younger viewers' ongoing exodus from traditional TV may very well make it impossible for Fox to continue to charge the dizzying carriage fees it currently extracts from cable and satellite operators, which in turn would only exacerbate the spiraling costs of procuring rights to top-tier live sporting events.
Pushback from the operators is nothing new; some 900,000 Comcast subscribers in the Tri-State area missed out on the Yankees' entire 2016 campaign after the cable giant refused to pony up for what it characterized as a 33 percent carriage fee hike. The two sides came to terms in time for the 2017 MLB season.
Which brings us to ESPN. If Fox presumably no longer believes that it can operate at the sort of scale that will allow it to continue to compete with the likes of Bristol, Disney is confident that the addition of the RSN suite will give ESPN a license to print (even more) money. Besides giving it a virtual stranglehold over local sports (the Fox RSNs currently are home base for 44 MLB, NBA and NHL franchises), the acquisition of the rights to an additional 5,500 live events per year would sweeten the pot for fans who may be thinking of signing up for ESPN's upcoming direct-to-consumer streaming service.
While Disney has played its ESPN OTT cards close to the vest, keeping its own counsel on how it will brand, price and program the new service, the infusion of live NBA games could go a long way toward generating greater interest in the initiative. When Disney first announced its OTT scheme, the company said the live content would be limited to MLB, NHL and Major League Soccer games, plus some Grand Slam tennis events and college sports. Of the latter category, it is believed that ESPN does not plan to offer OTT content from the Power Five athletic conferences (ACC, Big Ten, Big 12, Pac-12, SEC).
Back in 1998, Disney shelved plans to establish a West Coast RSN after two of the franchises it had hoped to lure from Fox Sports West elected to renew their carriage agreements. For the better part of the last 20 years, ESPN has shown little interest in carving out a local TV business, although the ongoing migration of MLB and NHL audiences from national to hometown platforms may prove top be another mitigating factor. According to Magna research, 25 percent of NHL fans during the 2016-17 season watched their local teams exclusively on RSNs rather than turn to the national NBC/NBCSN feeds.
As expected, Fox had little to say about today's news. "There's nothing to add to that other than the nothing we've said so far," 21st Century Fox CEO James Murdoch said at Tuesday morning's UBS Global Media and Communications Conference.
