And there's the queasy feeling that Fox would have to live with if it played a wallflower while others seized the day.
"Look, it's scary, right?" says Fox Sports Media Group co-prexy and chief operating officer Eric Shanks. "It's a big endeavor; it's a big investment by the company. And so even though this is a mature market and there's a lot of competition, it just feels like a very Fox thing to do."
Support for Fox's move goes beyond in-house cheerleading. Analysts, while cognizant of concern over the rising costs associated with televised sports, believe Fox has its ducks in a row, with little to lose and much to gain.
"I think it's about as risk-mitigated as it possibly could be," says David Bank, RBC Capital Markets managing director of equity research, citing Fox's pre-existing distribution agreements and rich vein of content. Not going the national sports cable route would have left all of Fox's rights agreements, in Bank's words, "a melting iceberg as an asset."
Marci L. Ryvicker, Wells Fargo managing director of media and cable equity research, notes that Fox already has the rights necessary for a build-out. "It would be one thing if all of a sudden they tried to do a national sports network and then went out bidding for sports," she says. "We wouldn't know how high those costs would be. This way, it's relatively easy to trace back their costs.
Indeed, the rights aren't cheap, but the list of sports is impressive. There's Major League Baseball ($4 billion for eight years), NASCAR ($2.4 billion for eight years), the UFC ($700 million for seven years), FIFA soccer ($800 million for eight years) and college conferences Pac-12 ($3 billion for 12 years) and Big 12 ($1.2 billion for 13 years).
By going national with FS1 and FS2, Fox gives itself the best chance to leverage those investments with gains in the subscriber fees they'll be paid by multichannel video program distributors that carry the channels.
Fox had been getting in the neighborhood of 20Â¢ to 30Â¢ per subscriber each month for Speed (which will become Fox Sports 1) and about 20Â¢ monthly per sub for Fuel (which morphs to Fox Sports 2). Analysts expect subscriber fees from FS1 to triple in the short term (Fox was re-negotiating several deals with distribs of the two channels in the weeks leading up to the Aug. 17 switchover).
The numbers add up quickly. Banks sees FS1's sub fee boosting to 80Â¢ a month. Figuring a slight uptick in subscribers to 90 million (up from Speed's 86 million) that translates to a revenue stream of close to $1 billion annually for FS1 alone. Analysts feel that in years to come, a $1.50 per-sub rate is a reasonable target. And while Fuel/FS2 launches from a lower base, that also means there's greater room for growth.
Meanwhile, advertising income for the networks is expected to skyrocket. "Ad dollars are definitely key," Ryvicker says. Analysts project a fivefold increase in ad revs to $463 million (from $92 million) in the first year.
Adds Banks, "Even for News Corp., that's a lot of money."
Of course, it's not as if while Fox was collecting its array of sports rights that the company wasn't considering where it would eventually place them.
"It became pretty clear when we were starting to look at things like college football and baseball, that you weren't doing anybody any favors by having some stuff on FX, some stuff on Soccer (which will become entertainment network FXX in September)," Shanks says. "We really needed a national, multi-sport channel to kind of make it all work together."
One goal that isn't on the Fox agenda is trying to topple ESPN, whose self-proclaimed status as "The Worldwide Leader in Sports" remains unquestioned. ESPN earns more than $5 per subscriber monthly -- income that has allowed it to become the dominant sports rights bidder.
Many believe Fox Sports won't compete with ESPN until it can bring the NFL to one of its cable channels -- Fox's current nine-year, $9.9 billion NFL package is for broadcast only. As a comparison, ESPN had been in existence for eight years before it landed the "Sunday Night Football" franchise (dropping that for the Monday night game in 2006).
But playing second-fiddle to ESPN doesn't change the significant gains Fox can make with the two new networks, which will work together in much the same way ESPN and ESPN2 did at the outset. With so many rights deals in place long-term, the sports entertainment sector is big enough for ESPN, Fox and others to coexist.