Great, I can see it now. 24 hours of NASCAR and FOX gets rid of F1 and all
the *real* racing.
Dan
-----Original Message-----
From: owner-autox@autox.team.net [mailto:owner-autox@autox.team.net]On
Behalf Of Murray, Matthew D.
Sent: Thursday, April 19, 2001 7:31 AM
To: Teamdotnet
Subject: FOX CABLE Eyes Speedvision (part two)
I had sent this to a few other lists last night but, it bounced due to it
being over 10K. So here is part two.
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An FYI for all.
Matt Murray
mattm@optonline.net
Fox Cable, then Fox/Liberty Networks, bought 34 percent of Speedvision/OLN
in 1998 for about $90 million. Along with that stake came the right to buy
out the other partners, beginning in March 2001. Fox's rights extend to
2004.
While that would suggest Fox could take its time in working out a deal,
sources familiar with the situation have said Fox would like to hammer out
an agreement soon.
According to sources, Cox and AT&T put their shares to Fox on March 24,
which triggered a valuation of the network by independent auditors. Fox,
AT&T and Cox are in the process of hiring investment bankers to value their
stakes. After that occurs, it's then up to the parties to agree on a price.
By putting its shares, Cox gave up its co-management rights for
Speedvison/Outdoor Life. Fox Cable is now sole manager of the networks.
"Right now it's pretty early on, but people are talking," said one source
familiar with the negotiations.
The source said a deal could be hammered out by the summer.
"Fox wants to get something done before the next NASCAR season starts in the
fall," the source said.
According to the source, both Werner and the Daniels estate have indicated
they will also put their shares to Fox.
AT&T has publicly expressed an interest in selling its stake in
Speedvision/OLN, as well as stakes in other programmers. Last July, AT&T
received permission from the Federal Communications Commission to talk with
parties interested in buying the stake.
Fox Cable apparently has the most interest in Speedvision, particularly
after Fox, NBC and TBS Superstation acquired the rights to NASCAR event
coverage for $2.8 billion. The six-year contract was signed in November
1999.
That deal originally called for a 24-hour racing channel. If Fox is
successful in gaining control of Speedvision, that's what the network could
turn out to be.
The belief is that Fox can move some of that programming to Speedvision,
essentially making the network its own cable NASCAR channel.
Speedvision is currently available in about 39 million homes, according to
April Nielsen Media Research data. Fox thinks that could increase fast if
the channel were more closely associated with NASCAR.
Werner started Speedvision in 1996. When Fox bought into Speedvision/OLN in
1998, it was in only 14.5 million homes.
NASCAR programming has been a qualified hit for Fox so far. Fox
Broadcasting's inaugural showing of the Daytona 500 - in which racing legend
Dale Earnhardt was killed in the final lap - received a 10 rating, NASCAR's
best ever.
Through April 1, Fox's NASCAR telecasts averaged a 5.7 Nielsen rating, up 23
percent from races that aired on ABC and CBS in 2000. Among the various
sports properties, its ratings rank second only to the National Football
League.
Non-race NASCAR programming that airs throughout the week and on Sundays has
also improved ratings-wise, according to Fox Sports Net officials. But Fox
has had some troubles selling ad time during its first NASCAR season, amidst
a tough advertising market.
As with other sports properties, including baseball, Fox has split NASCAR
programming across its broadcast and cable networks. NASCAR Busch Series
races have shown up on FX, and the racing circuit was credited with helping
accelerate FX's growth with several cable operators.
"If you look at their portfolio, they made the investment in NASCAR, which
is helping them drive penetration of FX network," said one source familiar
with the negotiations. "Adelphia [Communications Corp.] and Charter
[Communications Inc.] have accelerated their launches of FX because of
NASCAR."
Speedvision launched in 1996. Its programming ranges from news shows like
Auto Week and Bike Week, direct feeds from auto shows, car-care programming
and Formula One and Championship Auto Racing Teams (CART) racing.
The channel also offers a steady diet of boating and aviation programming,
such as Ship Shape TV and Sport Aviation.
While OLN has value to Fox - especially since its launch of National
Geographic Channel in January - if given a choice, Fox might relinquish that
stake in negotiations for full control of Speedvision.
OLN has about 35 million subscribers and offers hunting, fishing and other
outdoor adventure-related programming such as bicycle racing, snow sports
and water sports. It has landed the rights to the 2001 Tour de France.
That segment is also growing and attracting other programmers. Besides
competitor Outdoor Channel, which offers fishing, hunting and other outdoor
fare and has about 15 million subscribers, ESPN recently bought fishing
organization Bass Anglers Sportsman Society Inc. and suggested that its
programming could help launch an ESPN outdoors network.
Janco Partners Inc. analyst Matthew Harrigan said swapping the OLN stake for
Speedvision could be a way to lessen the financial burden of acquiring the
network. He also said he didn't think Fox would be in a hurry to do a
Speedvision deal.
"I would be surprised if they do anything immediately out of the block,"
Harrigan said. "You could argue that Fox could wait a while."
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