PSN files for Chapter 11 bankruptcy protection
PSN will file for Chapter 11 bankruptcy protection and will shut down. 150 employees at PSN's Fort Lauderdale production center will be laid off.
Hicks Muse started PSN in February 2000 as a direct competitor to FOX Sports Latin America and ESPN Latin America. With the rights to Copa Libertadores and South American World Cup Qualifying, PSN vaulted to the top position among international sports channels in both Argentina and Brazil.
However, PSN paid a heavy price to get to the top. It overpaid for TV rights to Italian, French, and Portuguese soccer throughout the Americas and it overpaid for TV rights to products such as Formula 1 racing and tennis.
With the economic crisis in Argentina, the odds for PSN to reach profitably for the forseeable future became slim. Ultimately, mounting losses forced Hick Muse to shut down PSN and barter its sports rights to FOX in exchange for shares of the partnership.
PSN's exit leaves only two major players in the international sports cable/satellite TV market in Latin America: ESPN Latin America and FOX Sports Latin America.
In Brazil, FOX has surrendered the market to ESPN by partnering with ESPN and Brazilian media giant Globo to form the ESPN FOX Sports joint venture, which is based in Rio de Janeiro.
ESPN FOX Sports in Brazil is similar to ESPN Star Sports in Asia, in which ESPN parent Disney and FOX Sports/Star Sports parent Newscorp have decided to merge operations in order to cut costs and reduce the rights fees by eliminating competitive bidding. ESPN Star Sports operates regional sports channels in Asia from a facility in Singapore.