To listen to Mike Mulvihill, Fox Sports isn’t just writing huge checks to acquire sports rights and willing to sit back and watch consumers foot the bill. Fox isn’t looking to collect increasingly higher fees from cable and satellite operators and let them deal with the frustrated, economically struggling customers.
Mulvihill, a Fox Sports senior vice president, says sports programmers are often wrongly portrayed in their approach to the sports TV money chain that has consumers at the bottom. “Certainly, we’re sensitive to it,” he said.
It is an economic imperative. If cable or satellite operators start dropping Fox Sports properties or consumers can’t afford pay-TV, then Fox will have trouble recouping the big dollars (about $20 billion) that Mulvihill said it has invested recently in the NFL, UFC, Major League Baseball, etc. And Fox isn’t stopping yet as Mulvihill confirmed a Sports Business Journal report Fox should close a NASCAR renewal very soon, while looking to re-up with the English Premier League.
“Certainly when you’re paying the kind of rights escalations that we are and you know that some of that cost is going to be passed on to the individual consumer, you do worry about the price point getting to a point where the model just breaks down,” he said speaking at an Advertising Week event in New York.
Fox has been working on a four-year calendar. Mulvihill said the company – Fox Sports Media Group – has spent the past two years loading up on rights for the long term. Now, the next two will be about deciding how to best apportion them within the Fox Sports portfolio, which stretches from the flagship broadcast network to Fox Soccer to Fuel to maybe a national cable sports network.
“We have been extremely aggressive in just compiling weapons and from a programming and scheduling point of view, I now feel I am sitting on top of this fantastic arsenal that we have to figure out what to do with,” he said this week.
Besides consumers, Fox also has to keep attracting advertisers. Mulvihill said a dual-revenue stream with ad and subscription dollars supporting live TV may be the most sound revenue generator in all of entertainment.
“Obviously, our belief in live sports and in the business model that we operate under is as strong as it can responsibly be,” he said.
The ad business offers some inspiring dynamics, he said, in more women watching sports as the aim is to broaden the appeal. Top Zenith buying executive Ava Jordhamo, who was sitting next to him, said “it’s not just the traditional advertisers that you would expect” using sports.
(Mulvihill said Fox’s late NFL game on Sundays is the top live show on TV in the female 18-to-49 demo, by one measure.)
To get the ad business humming further, Mulvihill said Fox Sports needs better data that captures engagement. He said Nielsen does a good job in tracking number of viewers and demographic breakdowns, but there needs to be ways to capture the “intensity of experience.”
Neuroscience – watching a brain light up when Peyton Manning or Wayne Rooney does something special -- might work, but research from an Innerscope or NeuroFocus isn’t cheap. (Fox may be tapped out after the $20 billion.)
“I think they do tremendous work and what they do is really is exciting, but it’s cost prohibitive,” he said. “In terms of having something that isn’t necessarily going to have a seven-figure price tag and that will speak to the entire industry, we are a long way from being there. And I think the deficiency in metrics probably hurts sports more than it does any other part of the business.”