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

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