Disney, News Corp target post-World Cup soccer wins

NEW YORK (Reuters) - Soccer, the No. 1 sport in most of the world, is finally getting a big roll on U.S. television.

News Corp and Walt Disney Co are making big bets on the growing popularity of top level European league soccer in the United States, thanks to global stars like David Beckham and a more diverse U.S. population.

The companies see it as a way to boost the affiliate fees they charge cable distributors, while also drawing audiences of 18-49 year-old males coveted by advertisers.

"We believe the U.S. is becoming more diversified and we've seen a steady increase in ratings for our soccer games," said Scott Guglielmino, ESPN vice president programing and acquisitions.

"Soccer will be a growth area for media conglomerates as more people are getting interested in soccer and in stars like David Beckham as well as continued immigration of people who are used to the sport," said David Joyce, a Miller Tabak analyst who covers Disney and News Corp.

While soccer -- or football as it is called in most countries -- is a favorite among pre-high school kids in U.S. suburbs, their interest shifts to American football, baseball and basketball as they get older -- and it is those games that U.S. television favors.

The U.S. Major League Soccer franchise is covered by some networks but it pales in comparison with the pedigree and star power of English, Spanish or Italian soccer leagues.

At Disney, where ABC and ESPN have the U.S. rights to live coverage of the 2010 and 2014 World Cups, the plan is to ramp up its involvement in soccer both in the United States and abroad.

In the United Kingdom alone, ESPN has committed to more than $400 million in soccer rights over the next few years, according to Credit Suisse estimates.

Closer to home, ESPN struck a deal to broadcast 46 live English Premier League matches in the United States in 2009-10, buying rights to those games from News Corp. It has enjoyed enough viewership for the sport on ESPN2 that next season it will carry 75 live matches including weekend and some mid-week matches.

What is more, soccer has proven that it can draw big U.S. viewership, at least for the top events. The U.S. audience for the 2006 World Cup final, for instance, eclipsed the audience for that year's National Basketball Association championship.

WELCOME COMPETITION

Rupert Murdoch's News Corp has built a lot of its success in pay-TV on the back of exclusive soccer deals, particularly in the UK with its satellite TV operator BSkyB.

In the United States, Murdoch's company has led the charge through Fox Soccer Channel, whose ratings jumped last season after it won rights to broadcast games from the European Champions League. That helped boost its mid-week ratings, in addition to its usual lineup of live weekend matches.

And in a sign of how seriously Fox is approaching soccer, it aired live coverage of the Champions League final in May.

Perhaps the strongest indication of Fox's belief in the future of soccer with U.S. audiences was the launch in March of Fox Soccer Plus, a new premium channel covering even more live soccer matches as well as some rugby matches.

Fox Soccer President David Nathanson said even though the new channel was launched in the second half of the soccer season, it was still well received by viewers.

"These are 700 live events you won't see anywhere else," he said. "Remember, we're marketing this to our existing Fox Soccer Channel audience."

Given that Fox Soccer Channel reaches 36 million homes -- only about a third of the total U.S. television homes -- it still has plenty of upside. For now, though, those figures put it at a disadvantage to ESPN. ESPN2, which carries the Premiership games, reaches 50 million American homes.

Nathanson said that competition benefits all players in the U.S. TV market when it comes to soccer.

"If it gets competitive in some ways that's a good thing, the more promotion will help drive interest to the sport and our channels also," he said.

But competition can also mean higher rights fees down the road, as networks vie to build up their soccer brands.

Disney is believed to have agreed to pay global soccer body FIFA around $94 million for broadcast rights of this year's World Cup and in 2014, according to Credit Suisse. Univision, which has covered the tournament every four years since 1978, has Spanish language rights.

"We like to think we've had a great influence in the growing popularity of soccer on TV in the US," said Alina Falcon, president of news at Univision. "We take soccer very seriously all year round and even non-Hispanic viewers tune into watch the passion with which we present our games."

(Reporting by Yinka Adegoke; Editing by Paul Thomasch and Richard Chang)