Sports hasn't been kind to the Walt Disney (DIS) of late. Falling subscribers at its ESPN cable-TV sports giant have siphoned off revenue and sent its stock price skidding.
But over at Rupert Murdoch's Twenty First Century Fox (FOX) , it's an entirely different ball game. Its two-year old Fox Sports 1 cable network, which draws fewer viewers than the 36-year old ESPN, is quietly on track to show a profit in 2016 on the strength of robust ad sales, rising affiliate fees from cable, satellite and telco distributors, and the absence of many expensive rights contracts that can pressure profits.
According to industry analyst SNL Kagan, Fox Sports 1 will show an operating profit of $116.5 million in 2016 as earnings skyrocket to $450.3 million in 2017.
The surprise earnings windfall is vintage Fox. Time and again, Murdoch has scoffed at traditional wisdom by taking on the Big Three broadcast networks, more memorably with his Fox TV network and then with Fox News's successful battle with Time Warner's (TWX) CNN. Both ventures withstood years of losses before becoming moneymakers.
Fox Sports 1 lost $261.8 million in its first year, according to SNL Kagan, and will lose $56.5 in 2015. A Fox spokeswoman had no comment.
Fox set out to take on ESPN in 2013, when it remade Fox's motorsport channel Speed, giving its startup national sports channel more than 80 million U.S. households and popular NASCAR programming. Fox Sports 1 added major league baseball and pro soccer as well as college sports, boxing and high-end events like the U.S. Open golf tournament that didn't require onerous, long-term contracts.