Fox CFO: Cable Bundle Still the Most Efficient Way to Distribute Live Sports, Despite ESPN’s Plans
Disney is doing everything it can to make sure it’s ready for the future. The company has had preliminary discussions about selling off ABC and some of its cable channels, so that it can focus on building up Disney+ and Hulu and prepare for a day when ESPN is offered on its own streaming platform without the need for a cable subscription.
The people running Fox have seen those moves, but they aren’t ready to follow Disney’s lead just yet. That’s according to Fox CFO Steven Tomsic, who spoke with Wall Street analysts this week at the 2023 Bank of America Media, Communications and Entertainment conference about the company’s thoughts regarding linear TV.
“I think when we look at choices we have made with respect to distribution, we start with — well, how does the consumer want to receive our content?” Tomsic asked. “And right here, right now, the most efficient, effective way for a consumer to receive sports and news is still in the bundle. The best way that we monetize our content remains in the bundle. That may change over time and we’ll adapt to that, but we still think that a bundled offering to the consumer where sport and news will become the bedrock of that is the best way to get to the consumer.”
Tomsic was also asked about Fox’s impressive live sports portfolio in the context of companies like Disney and Warner Bros. Discovery making more live sports available via streaming. He said that the fragmented nature of sports rights deals make sending major sports to streaming difficult, and expressed skepticism that an individual provider like ESPN shifting its efforts to a direct-to-consume (DTC) model would be a meaningful disruption of the industry.
“I can see a world where the ESPNs of this world do go DTC, but I’m not sure how impactful that will be for us or your entire industry,” Tomsic said. “If there is the emergence of some sort of sports bundle, that is across different network providers then the first port of call is going to be Fox, right, in terms of people wanting to aggregate our content with their service just given how strong our sports offering is.”
Fox does indeed have a wide array of live sports, including college football from multiple conferences, NFL and MLB games, and more. Sports leagues will likely stick with linear TV as long as they can, since the cable TV model creates much bigger revenue streams for sports teams than streaming does currently.
Tomsic’s words echoed those of Fox CEO Lachlan Murdoch, who spoke about shifting sports on Fox, FS1 and FS2 to streaming in August. Murdoch said that a shift to streaming won’t be immediate, as there will be a transitory phase in which cable is phased out and streaming is phased in before pay TV is ultimately declared extinct.
Murdoch has also insisted that Fox is ready to go when the pivot to streaming is called for, so it’s not as if the company has its head buried in the sand in denial that streaming’s takeover is coming. For now, however, audiences shouldn’t expect any major live news or sports additions to Fox’s streaming platforms Fox Nation or Tubi.
Tubi
Tubi is a free video streaming service that includes on-demand access to 200,000+ movies and TV episodes - more than any other streaming service. Its ad breaks are shorter and less frequent than most free services. Fox executives have called their service “TV on steroids.”