ESPN’s acquisition of Fox’s regional sports networks among other Fox assets became official yesterday. With the rapid increase in sports media rights fees, controlling 22 regional sports networks may have been getting too costly for Fox.
According to the Sports Business Journal’s John Ourand, Fox CEO “[Rupert] Murdoch has not been high on the RSNs for several years. Same old media story: rights fees rising at a faster rate than affiliate revenue.” Sports media rights fees are expected to continue rising due to increased competition with digital companies such as Google, Facebook, and Amazon bidding for sports packages.
“The one that’s coming at sport is Facebook, they unsuccessfully bid just for the digital rights of half of the Indian cricket for $600 million, so that was a warning shot you know” said Rupert Murdoch, Executive Chairman of 21st Century Fox during an interview with Maria Bartiromo on Fox Business’ “Mornings With Maria.” “They’ve announced they’ll spend billions on sports rights, so we don’t know which country they’ll go after or what they’ll do”, Murdoch added.
Last month, Ourand reported via SBJ, Facebook has been interviewing candidates in search of an executive to conduct sports rights deals. Ourand also stated the person hired for that position will be provided a budget of a “few billion dollars” to spend on those deals.
The $600 million bid by Facebook for Indian cricket was lost to Fox’s winning bid of $2.2 billion. Murdoch and Fox have bid for dozens of sports rights contracts over the years, but this past process included a new competitor. There’s no question Facebook’s desire to spend money on digital sports rights resonated with Murdoch.