A Time to Punt

News Corp.'s chairman Rupert Murdoch is now looking to launch a new sports cable network to compete with the likes of ESPN, but he says it will only happen if Fox Broadcasting negotiations for the NFL are successful.

One wonders why. Press stories note that not a single national TV partner of the NFL is profitable with the games - not ABC, CBS, ESPN, or Fox. Not even DirecTV - which is now owned by News Corp. DirecTV offers NFL Sunday Ticket, a pay-for-TV package with out-of-market games. The satellite service, though growing steadily, is still a national TV outlet with limited distribution.

While press reports have talked about the lack of profitability, stories haven't discussed Fox's financial history with sports. Several years ago, Fox took a $1 billion write down due to overpaying for a number of sports franchises, including the NFL, NASCAR, and Major League Baseball.

No matter. Murdoch still wants more NFL and, according to reports from yesterday's Goldman Sachs media conference in New York, would spend millions more for the league (but not $300 million more).

What can one say? Hasn't Murdoch learned from Fox Broadcasting Co.'s recent history? Perhaps he needs to observe NBC. Years ago, it abandoned all the Big Four sports, leaving it with only the Olympics, which has been consistently profitable. Starting next year, NBC will try again with the lowly NHL - but the network didn't pay much for it.

Here's the tease: The NFL is one of the few sports leagues that consistently delivers healthy ratings, especially with hard-to-come male viewers. NFL has been immune -- so far -- from the major TV ratings erosion that has affected the nationally aired NBA, NHL, and Major League Baseball games.

Perhaps a better story would be to analyze what NFL games bring to local Fox stations. No doubt those outlets with major local advertising are stronger because of the league.

A more pressing analysis is observing any attempt to launch a new sports cable network in a mature and contracting cable network market.

Mr. Murdoch would be better served to punt.

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