Does Fox Dream of an ESPN?

Anyone wondering why News Corp's Fox has been negotiating so many sports deals in recent weeks, including a stake in the YES Network and a likely deal to renew TV rights to the Los Angeles Dodgers, has only to look at one number for a possible explanation: $42 billion. That's the value put on Walt Disney's sports juggernaut ESPN by Wall Street research firm Sanford C. Bernstein.

It is more than the market capitalization of several big entertainment companies, including Viacom and CBS Corp., and nearly as much as that of Time Warner Inc. It reflects in part ESPN's outsized share of subscription fees split with cable- and satellite-TV operators. ESPN's flagship channel alone generates four times as much revenue from such fees as the next biggest cable channel, according to market researcher SNL Kagan. Enter Fox, which early next year is expected to announce plans for a national sports cable channel through the rebranding of its motor-sports network Speed, according to people familiar with the plans. The new venture, to be called Fox Sports 1, is expected to launch later in 2013, say these people. With the network, Fox will be in a position to capture a bigger share of TV viewers and advertisers' seemingly insatiable appetite for sports, not to mention the subscription fees shared by pay-TV operators. Even next to ESPN, insiders say, there's still room for Fox to carve out its own chunk of the market.