Concentrating cable-TV-sports power at three big firms

A new era in the mega-billions cable-TV sports business launched Saturday.

Fox Sports kicked off the 24-hour Fox Sports 1, and NBCUniversal televised for the first time Premier League soccer matches. NBC has said it would cover every Premier League game - 380 of them.

In two years, Comcast Corp.-owned NBC Sports Network will add to its programming late-season NASCAR races, some of the most-watched sporting events on television, after a stunning 10-year deal in July. Comcast took TV rights for those races from ESPN and Turner Broadcasting System Inc.

The reported $4.4 billion for NASCAR is the same that Comcast paid to televise the Olympics through 2020 on the NBC broadcast-TV network and the NBCUniversal cable channels.

The broad competitive landscape in the cable sports-TV business now belongs to three big and financially powerful companies: Twenty-First Century Fox Inc., Comcast's NBCUniversal, and the Walt Disney Co.'s ESPN. All will be looking to boost subscriber fees charged to pay-TV customers and add millions of new homes of distribution.

This business model - boosting monthly subscriber fees and adding homes - has driven TV rights fees for live sports in recent years as the media companies positioned themselves for this clash.

After NBC's NASCAR deal, Fox agreed to pay a reported $1.2 billion over 12 years for the TV rights to the U.S. Open, taking the golfing championship from NBC.

"They are the elephants in the tall grass," Neal Pilson, the former head of CBS Sports and now an industry consultant, said of ESPN, Fox, and NBCUniversal.

The media companies view the channels as new businesses with strategic value, and the values of the TV-sports-rights contracts have to be considered in that context, creating a more profitable cable-TV sports channel.

Steve Burke, the head of NBCUniversal, said in a recent conference call: "We look at NASCAR as being very, very important for the NBC Sports Network and the network itself because it basically gives us 20 weekends a year at a time the NHL is not playing. So now we have year-round professional sports, very highly rated."

NBC believes that NASCAR, in addition to the Premier League games, could help it expand the distribution of its sports channel, currently at 80 million homes, and hike subscriber fees to $1 a month or more, compared to about 40 cents currently. NBC Sports Network is transitioning the name for the channel, formerly Versus, to NBCSN.

Pilson believes that NBCUniversal's acquisition of NASCAR and Premier League matches enhanced NBCSN's profile.

"It's now a destination for major sports, which it wasn't a year ago," Pilson said of NBCSN.

"Regarding Fox Sports 1," Burke said on the conference call, "I don't think it changes the playing field for NBC Sports too much one way or the other. We've always had a lot of competition for rights, and between ESPN and Fox and Turner and others, a lot of people have been in the sports business competing for rights with us for a long time."

Experts believe that Fox - an aggressive and creative programmer - will seek to directly challenge ESPN, which will likely attempt to grow the ESPN and ESPNews cable channels.