Homepage / Technology / Op-Ed: Fox Sports has few good options after the departure of Jamie Horowitz
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Technology

Op-Ed: Fox Sports has few good options after the departure of Jamie Horowitz

The day before the July Fourth holiday, Jamie Horowitz — head of sports programming at Fox Sports — was relieved of his duties overseeing its sports cable assets of FS1, FS2, Fox Deportes and FoxSports.com.

The Los Angeles Times reported that it was related to an ongoing investigation into sexual harassment. Horowitz has hired a lawyer and is objecting to being let go.

Regardless of whatever the legal outcome turns out to be, with Horowitz out after two years on the job, it’s a natural time to assess the success or failure of his turnaround strategy and what should happen next.

Horowitz landed at Fox in April 2015, after a 10-week stint running the “TODAY” show at NBC Universal. Almost immediately, he started talking big about his desire to take down his old employer ESPN.

In April 2016, Horowitz called out ESPN’s “SportsCenter” ratings:

I loved ESPN … I have great memories of my time there. And ‘SportsCenter’ has helped give it an identity for 30 years. But if you look at recent trends, they’ve lost 30% of the audience in the last five years. And among younger viewers, it’s 40%. That’s a staggering fall. I would be a little worried if I were them. … There has been a seismic shift in how people consume content. If you want to see a highlight, you’re not going wait eight hours to see it.

Yet that seismic shift has affected FS1 just as much, if not more, than ESPN. Yet, Horowitz kept speaking out about it publicly.

Horowitz hired on-air talent and behind-the-scenes people from ESPN to work at FS1, including Skip Bayless, Colin Cowherd and Jason Whitlock. FS1 tried to replicate the “embrace debate” mentality that Horowitz had helped pioneer at ESPN. Sports highlights shows like “Fox Sports Live” were canceled in favor of more “hot take” debate shows throughout the day.

Yet ratings have continued to be disappointing. Last fall, there was some excitement during the Cubs historic run in the baseball playoffs when FS1 beat ESPN in the ratings for the first time ever. However, since then, FS1 has gone back to trailing ESPN badly. More worrying, it appears to be going in opposite directions than ESPN. Primetime ratings were down 24 percent year over year for FS1 in April, while ESPN’s were up 9 percent in the same period.

In other words, Horowitz was criticizing ESPN for poor ratings when his ratings were worse, and was also mimicking the exact same strategy that ESPN was following.

By last fall, ESPN “SportsCenter” anchor Scott Van Pelt had had enough, and said so in The Washington Post:

Jamie Horowitz … [in] every article he’s quoted in he mentions ‘SportsCenter’s’ failing ratings. And not one says, ‘Well how about ‘Speak for Yourself,’ which gets 50,000 people.’ We don’t have a single show that rates that badly. He gets constantly quoted talking about our ratings, and that is an astonishing thing that continues to happen. … At some point, if you’re going to talk [junk] about our ratings, you should be held accountable for yours. They’re not close.

Another way of measuring the success of FS1 versus ESPN is in terms of the affiliate fees it gets from cable and satellite operators for carrying their sports channels. Fox makes about $1.3 billion a year from FS1, FS2 and Fox Deportes. That’s nothing to sneeze at but it’s far less than the $9.5 billion a year that ESPN, ESPN2, ESPNU and the SEC Network brought in for Disney last year. And even though ESPN’s total number of cable subscribers has contracted in the last couple of years, recently FS1 has seen even faster declines.

The FoxSports.com website — also under Horowitz’s watch — has failed to grow its traffic. In the last 12 months, according to comScore, the average minute audience (i.e., the average number of people on the site in an average minute over an entire month) for FoxSports.com was 19,800 versus 153,000 for ESPN.com and 78,000 for Yahoo Sports/NBCSports.com. Bleacher Report and CBSSports.com both had higher average minute audiences than FoxSports.com.

Fox Sports digital also recently decided to go “video only” and let go of a few dozen staffers who produced written content. They’re not the only media company to push video over text-based content. However, when you go to the FoxSports.com website now, it’s entirely video clips of FS1 TV shows. It no longer even tells you a game’s score. As such, it’s not really useful.

Horowitz acknowledged earlier this year that “the success of FS1 is most assuredly dependent on the combination of live rights and signature personalities.” The problem is that FS1, with the exception of playoff baseball and some college football, doesn’t have the right sports rights to draw big audiences.

So what do you do if you’re Fox now that Horowitz is gone? That task falls on the shoulders of Eric Shanks, the president of Fox Sports who announced Horowitz’s departure. Here are his options, none of which are particularly attractive.

  1. Bet more on sports rights. This is unlikely until Fox’s Sky deal is approved or not by British regulators which won’t be until the fall. Then, there’s the problem that the big sports leagues are still a few years away from auctioning off their next packages of rights. Finally, those rights will be hotly contested for by not only ESPN (if it wants to keep them), but by many new digital players like Apple, Amazon, Google and Facebook. Do Rupert Murdoch and his sons really want to go on a significant spending spree for a cable channel that might continue to bleed subscribers?
  2. Cut expensive debate talent and go back to sports highlights. Skip Bayless is reported to be getting $26 million for his four years at FS1. So far, that hasn’t translated into great ratings for his show “Undisputed.” Could FS1 look to get out of those contracts? Maybe. But it’s already tried the nondebate approach and it didn’t yield great ratings either. And part of the rationale used for going all-debate was that it would be cheaper to produce than having reporters in the field for highlight shows
  3. Try to “Cheddar”-ize FS1. BTIG’s Rich Greenfield recently advised to Disney’s Bob Iger to, after firing John Skipper, “Cheddar”-ize ESPN. Cheddar is a private company who has so far raised $32 million to create a CNBC-style business content network which is available in a direct-to-consumer fashion or via distribution partners like Fusion, Twitter, Sling, Amazon and Facebook for free. Rich’s argument is that the future is not the cable bundle but direct-to-consumer, so ESPN should turn its back on its cable business in favor of building something like Cheddar is doing from scratch. Obviously, the resistance for ESPN is that it’s hard to turn your back on nearly $10 billion a year in affiliate revenues. FS1 has less in affiliate revenues, so you could argue that it has much less to lose than ESPN. But, despite having all the talk and bravado of a start-up, FS1 needs the cable bundle to continue to keep getting its $1.3 billion a year in affiliate fee revenues. And Fox investors would give the Murdochs too hard a time if they considered just shutting it down to go direct-to-consumer.

So the most likely strategy for FS1 is the one it’s been following for the last few years: status quo. Expect it to tinker with the talent and the shows. If its planned new morning show works, great. If not, expect sports highlights. Then it will promote its baseball postseason as much as it can. It will endeavor to keep FS1’s $1.3 billion a year in affiliate fees going as long as possible.

The reality for Fox is that — with or without Jamie Horowitz — there are no silver bullets for increasing the popularity of FS1.

To sign up for Eric’s monthly Tech & Media Email, go here. And to hear his podcasts on these topics, go here. You can follow Eric on Twitter @ericjackson .

Disclosure: NBCUniversal is the parent company of NBC and CNBC.

Source: Tech CNBC
Op-Ed: Fox Sports has few good options after the departure of Jamie Horowitz

Comments are closed.