One way or the other, Fox is getting out of making scripted TV and movies. Whether Disney really does buy its movie studios and TV production companies, or Comcast swoops in for another bite at that particular apple, Fox will be waving goodbye to almost everything that’s defined it as a broadcast network. And it appears the company wants to spend its massive $70 billion war chest on the only TV left people watch live: sports. But can Fox turn itself into ESPN?
It’s already working towards that. It’s cut an expensive deal to star airing Smackdown Live and has picked up the rights to Thursday Night Football. CNN predicts that’s just the start:
…analysts say the decisions to double down on live TV and ink major sports and entertainment contracts makes sense. Fox is making moves that capitalize on an audience it is already good at attracting, said Brandon Ross, an analyst at BTIG Research. “The strongest asset that’s in their portfolio going forward is Fox News,” he said, adding that the “core Fox viewer” likely lives in a red state and / or likes live sports. “I think the reason they did the WWE deal is because it fits with both of those things.”
But it may make less sense than it first appears. ESPN is an instructive example about how sports programming isn’t infallible; it largely built its empire on the back of retransmission fees, which you pay for a channel on your cable dial whether you watch it or not. Once people started dumping cable packages, the layoffs and cost-cutting measures arrived right behind them.
Similarly, one has to question the business sense of picking up Thursday Night Football. It’s true that football remains the highest-rated content on broadcast, even with a 10 percent drop in ratings, but Fox was able to swoop in and buy the rights in part because CBS and NBC were losing hundreds of millions on it, losses that are projected to keep going up. Add to this that even the head of the NFL players’ union thinks a strike in 2021 is all but inevitable, and Fox seems set to lose money.
But perhaps a bigger problem is who watches these sports and where they watch them. Despite what you hear, it’s not that millennials don’t watch sports — it’s that everybody is watching less sports overall. Scandals don’t help, with some leagues, but far more difficult to fight is the fact that people simply have more options to amuse themselves. This is probably why most sports are staring down a rapidly aging TV audience. Add to this the problem of platforms; leaving aside the annoyances of using an antenna, broadcast’s biggest source of viewers (and revenue, through retransmission fees) is cable. Fox may be working on a solution to “broadcast” to people on their tablets and phones, but that will be a complicated problem no broadcast network has fully solved.
Fox won’t cease to exist tomorrow, and neither will sports leagues. But there’s a degree of refusal to accept that what customers want, and how they want it, is changing quickly while Fox appears to be doubling down on the past. In the short term, buying up sports rights and trying to be the broadcast ESPN isn’t a bad idea. But sooner or later, Fox will have to figure out where it fits in a world where any network, even with live programming, can easily be ignored.
