SBD/February 7, 2013/Media

News Corp. COO Chase Carey Discusses Sports Rights; Calls Dodgers Deal "Too Rich"

Carey says RSNs will be profitable without big sports TV rights fees
News Corp. COO Chase Carey yesterday “conceded” that the TV sports landscape is "becoming increasingly tricky -- and expensive,” according to Meg James of the L.A. TIMES. Carey said, “We believe we are making the right decisions in navigating this invaluable yet complicated business.” He added that Fox had “no qualms" about its Prime Ticket network losing the "mammoth" Dodgers TV rights deal. Carey said, “Too rich for our blood.” He declined to say if losing the Dodgers rights would "force the company to lower the fees it charges to distributors to carry Prime Ticket.” Cable TV “drove profits" at News Corp. in Q2, but sports “proved to be a double-edged sword.” Expenses at the company's cable network division “jumped 26% in the quarter, largely because of the higher costs of some of its sports deals.” The Fox network “had to pay more because of its expanded coverage of college football.” Then the World Series “lasted only four games in October, robbing the network of its chance to hit a ratings home run” (L.A. TIMES, 2/7). THE WRAP’s Brent Lang noted the topic of sports “dominated" Carey's call with analysts yesterday. Carey “assured analysts and investors that by avoiding shelling out the big fees to air the basketball and baseball games, News Corp. ensured that its regional television business will remain profitable" (THEWRAP.com, 2/6). In N.Y., Amy Chozick reported the “real driver" of News Corp.’s growth came from its cable channels, which reported operating income of $945M, a 7% increase "from the previous year.” The company “continues to invest in sports rights," including the UFC. Carey called speculation about News Corp. introducing a cable sports channel "the world’s worst-kept secret." He declined to comment on "when that channel might make its debut” (NYTIMES.com, 2/6).

ACROSS THE POND: News Corp. execs said the company will "stay the course" with its 39.1% stake in BSkyB. However, Carey indicated that the company "was still looking at the long-term case for either selling the stake or trying again to take full control, after abandoning bid plans in the wake of the UK phone hacking scandal” (FINANCIAL TIMES, 2/7).

TURNER PACES TIME WARNER: Time Warner said that an “increase in advertising revenue and subscription fees paid by cable and satellite companies" to carry channels like TNT and TBS “helped lift net income" in Q4 to $1.17B, up from $773M. The N.Y. TIMES’ Chozick reported subscription and advertising revenues at Time Warner's “suite of cable channels" grew 7% and 3%, respectively, in the quarter, "compared with last year.” An increase in the number of NBA games on Turner channels, as well as “coverage of the presidential election on CNN, led to higher ratings” (NYTIMES.com, 2/6). Time Warner Chair & CEO Jeff Bewkes said Turner has “the strongest lineup of national sports rights than any other network other than ESPN.” However, CABLEFAX DAILY reports “launching a dedicated sports channel isn’t in the cards.” Bewkes: “We are focused on having the right sports” (CABLEFAX DAILY, 2/7).
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