OLN Gets in Ring vs. ESPN with Fight Deal

Jun 26, 2006  •  Post A Comment

OLN has found a sport where “Vs.” is already on the event posters.

The Comcast-owned network, which changes its name to Versus in September, is making a significant investment in a new boxing program with leading fight promoter Top Rank. The deal includes 12 live two-hour events and access to Top Rank’s 40-year-old boxing library. OLN plans to use the content for a 52-week Thursday prime-time boxing series, tentatively titled “Fight Night.” The series will present a new fight once a month and library material the remaining weeks.

The deal edges OLN, formerly known as Outdoor Life Network, further from its field-and-stream programming roots and closer to competing directly with professional sports behemoth ESPN. The Walt Disney Co.-owned ESPN family of networks has the only basic cable boxing franchise, “Friday Night Fights,” which appears on ESPN2. “Tuesday Night Fights” recently was added on ESPN2, and the boxing reality series “The Contender” runs on the main ESPN channel.

OLN will pay Top Rank top dollar–about $150,000 per live match, sources familiar with the deal confirmed. ESPN pays about $20,000 for “Fights” and Showtime pays $50,000 for its up-and-comer boxing series “ShoBox.”

Larger license fees enable OLN to attract higher-profile boxers. For championship events on HBO and Showtime, license fees are unique to each fighter or match and can climb into the millions.

“Boxing is a sport we can grow ourselves into,” said Marc Fein, OLN’s senior VP of programming and production. “With professional baseball or football, the rights get locked up. For boxing, you can enter at a decent level and grow into it. In terms of non-premium services, we want to establish ourselves as the best out there.”

OLN will also provide exclusive boxing content for its new broadband channel, dubbed The Player, which was announced last week. Live fights typically include several undercard bouts that are not shown during the broadcast, and OLN plans to offer the undercard matches on the broadband site.

In addition, OLN will leverage its relationship with Comcast by having the cable operator offer the fights via video-on-demand.

Several cable networks, looking to gain the young-male demographics of Spike TV’s Ultimate Fighting Championships franchise, have invested recently in mixed-martial arts fighting shows. Mr. Fein acknowledged UFC’s appeal, but said he’s confident traditional boxing will continue to draw viewers.

“UFC is great, but they’re such a clear leader right now,” he said. “We don’t want to come in as No. 2. If you look at the history of boxing, it’s been around forever and it’s going to be around forever.”

Viewership Stable on Cable

Boxing averages about 620,000 viewers on ESPN2, according to Nielsen Media Research. On the premium channels, average ratings are not as clear-cut. Showtime draws about 350,000 and HBO about 1.7 million viewers, according to Nielsen Media Research. But that excludes pay-per-view viewers. For five 2006 PPV boxing events, HBO generated $112 million in revenue.

Comcast has taken an unusual path with OLN.

Two years ago Outdoor Life Network was easily confused in the marketplace with Outdoor Channel and Sportsman Channel-all catering to deer–hunting and bass-fishing enthusiasts. In an effort to broaden the network’s appeal, Comcast approved “Survivor” reruns and America’s Cup and Tour de France telecasts. The company also changed the network’s name to OLN.

Last August the channel outbid ESPN for rights to the National Hockey League franchise, spending a reported $65 million for the first season. The move demonstrated the network’s willingness to get into the professional sports game, even if it entailed a significant investment.

All the while, OLN made ratings gains– though the network continually has been ranked in the Nielsen nether regions (last quarter OLN was rated 48 out of 64 basic cable networks among total prime-time viewers). Two months ago, OLN announced a second name change, to Versus (which will be abbreviated in logos and marketing as “Vs.”), and said the channel will become devoted to competitive sports.

“Comcast would really, really like to own ESPN,” said Derek Baine, a cable analyst for Kagan Research. “ESPN are just a huge pain for all of the cable operators.”

Comcast made an unsuccessful offer to purchase ESPN parent Disney in 2004. Mr. Baine added that he expects OLN’s cash flow to swing into the black next year.

“OLN has lost quite a bit of money [and] has not really found a big enough audience,” he said. “It makes sense to do a radical redefinition and really try to create value there. I have them losing money this year, but making it next.”