When we learned about Fox Sports 1 suddenly getting clearance from DirecTV, Dish and Time Warner earlier this week, it didn't take a rocket scientist to deduce that Fox had to make some concessions in order to get Fox Sports 1 into its desired 90 million homes for Saturday's launch. Fox had been seeking 80 cents per subscriber for the new all-sports cable network. However as Sports Business Daily's John Ourand reported, with Fox Sports 1 taking the place of Speed and the deals for the old channel yet to expire, the company agreed with Cablevision, Cox, DirecTV, Dish and Time Warner to keep the present rate of 23 cents per subscriber per month for now.
In hopes of getting viewers hooked on FS1, Fox is leaving millions of dollars on the table, but it's willing to negotiate for the new rate when Speed's contracts expire. While this is unorthodox, Fox did not want subscribers to all of the major cable and satellite providers to be left hanging or be on the outside looking in.
And down the line, Fox could bundle FS1 with its Fox Sports Net regional networks such as YES in New York when it has to negotiate a new contract with Time Warner Cable and with Cox has which to negotiate new pacts for several FSN channels across the country and that could also lead to the higher rate for Fox Sports 1.
So in sacrificing some money in the short term, Fox could end up making it back in spades later, but with the cable and satellite providers winning this first round of negotiations, they'll be ready to dig in their heels once again. And as the stories about the disputes got boring, just know that they could start all over again.
At least we won't be hearing about Fox Sports 1 being shunned by DirecTV, Dish and Time Warner for the next few months.
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