uploads/2018/09/5-22.jpg

Why Is Fox Picking Up Sports Rights?

By

Updated

Fox acquires media rights to PBC fights

Earlier this month, 21st Century Fox (FOXA)(FOX) inked a deal to purchase the broadcast rights to Premier Boxing Champions (or PBC) fights. PBC programming is slated to begin in December and run for four years.

Buying the media rights to PBC enhances the major sports content deals that Fox has inked in recent months. In January, Fox announced a deal to acquire the broadcast rights to NFL Thursday night games, paying a reported $3.3 billion for the rights covering five seasons.

In June, Fox reached a deal to broadcast World Wrestling Entertainment’s (or WWE) SmackDown weekly show for five years, paying a reported $1.0 billion for the rights. WWE gave the broadcast rights to its weekly Raw show to the Comcast-owned USA Network.

Article continues below advertisement

Fox to focus on sports and news after Disney deal

Fox has said that the sale of the majority of its entertainment operations to Walt Disney (DIS) would allow it to return to its primary focus—sports and news programming. So, the sports content rights the company is picking up can be seen as part of the preparation for a future where its sports programming would be core to the business.

Disney is buying several Fox assets, such as Fox’s 30.0% stake in Hulu and its 31.0% stake in British broadcaster Sky.

Fox transferring production studio to Disney

Fox is selling its 20th Century Fox studio business as part of its $71.3 billion deal with Disney. As a result, the company would be left without a major production house after the transaction closes. Fox may be racing to nail down premium content such as professional boxing matches to deliver compelling programming—even without a major in-house production house. 

Facebook (FB) and Twitter (TWTR) are also in the race for premium sports content, as they seek to attract more television ad spending away from traditional broadcasters like Fox. Facebook and Twitter exited the second quarter with 2.2 billion and 335.0 million monthly users, respectively. Fox’s advertising revenues declined 2.6% to $7.8 billion in the fiscal year ended June 30.

Advertisement

More From Market Realist