LOS ANGELES — Walt Disneys ESPN, which bills itself as the worldwide leader in sports, is meeting Fox Sports 1s challenge with additional shows, broader online offerings and a new studio.
The Fox network debuted Aug. 17, as 21st Century Fox takes aim at Disneys most profitable business. ESPN, which was watched in more than twice as many homes last weekend, invited reporters to its Bristol, Conn., headquarters on Aug. 21 to show off its changes.
ESPN accounts for about 70 percent of the $5.7 billion in operating income Disney reported from its cable networks in fiscal 2012, according to Martin Pyykkonen, a Wedge Partners analyst. Margins at the sports network have peaked at mid-40 percent, as it will be hard for ESPN to keep raising ad rates and fees from cable and satellite TV providers, he said.
If Fox Sports 1 kicks into high gear then there could be further margin impact and ad spend shifting somewhat away from ESPN, Pyykkonen, who is based in Greenwood Village, Colo., said in an email. But thats a big if at this moment.
Fox Sports 1 averaged 627,000 homes tuning in during prime time on the Aug. 17-18 weekend, according to data from Nielsen. ESPN averaged 1.7 million homes.
To keep Fox Sports 1 at bay, the Disney sports network is making changes including rehiring former ESPN host Keith Olbermann, whose new show for the ESPN2 network starts airing Aug. 26. Olbermann will be on at the same time as the ESPN channels SportsCenter news show on weeknights.
Our goal is to have the most significant competition for ESPN come from ESPN, John Skipper, the networks president, said Aug. 21 at a news conference.
ESPN is also expanding its College GameDay football preview program to three hours from two on Saturdays, and has introduced NFL Insiders, a weekday afternoon program that Seth Markman, who supervises NFL coverage, said will focus on news about players and teams for football nerds.
The network is hiring reporters to cover each of the National Football Leagues 32 teams for online and TV, said Rob King, who heads ESPNs digital media efforts. In October, it will begin converting users of its ESPN ScoreCenter mobile application to a new app called SportsCenter that will offer customizable statistics, videos, news and social networking. ScoreCenter has been downloaded 45 million times, King said.
ESPN will add a channel in 2014 called the SEC Network that will feature Southeastern Conference college sports. The 14 schools, including the University of Alabama and Texas A&M University, account for 38 percent of game-day viewers, while no other conference gets more than 11 percent, said Lee Fitting, who produces College GameDay.
Our ratings research tells us theres never too much SEC, he said.
Steve Levy, a SportsCenter anchor since 1993, said the competition from Fox has energized him and his colleagues.