21st Century Fox CEO James Murdoch and Exec co-Chair Lachlan Murdoch in a wide-ranging interview addressed the state of Fox Sports and their willingness to spend on live sports rights, according to a cover story by Matthew Belloni of the HOLLYWOOD REPORTER. Excerpts of their "first sit-down interview together" since taking over for their father Rupert on July 1 are below.
Q: Fox always has moved aggressively in sports. Fox Sports 1, by a lot of measures, has been a successful launch, but the ratings aren't huge.
James: They're higher than ESPN's this summer.
Q: For the World Cup?
James: And some other events. And baseball (playoffs have) been great.
Q: Are you committed to spending the astronomical fees it takes to put the kinds of sports on that make a difference?
Lachlan: We're best when we build businesses, when we're the underdog and when we're competing against an entrenched player that's much bigger -- and you can see that in Fox Sports -- so, absolutely. We're absolutely committed to continuing to grow it, and that's going to be our main continued investment.
James: That doesn't mean that any price is the right price, and we have been very comfortable walking away from opportunities. I think with Fox Sports 1, we're really happy with the packages we have. There's baseball, NASCAR, UFC, golf. It's a very, very strong lineup. You combine the Fox Sports brand with the broadcast (network) sports, the NFL, World Series baseball, the FS1 platform, with everything I just mentioned, and then some regional nets under the Fox Sports brand with the Yankees and the Mets, or St. Louis with the Cardinals, etc. These are things that really drive an enormous amount of viewership.
Q: ESPN has been under scrutiny from Disney and is facing layoffs, and some say the costs the network has incurred and the high subscriber fees actually could come back to bite Disney as we move to an OTT world.
James: You have to make a distinction between an incumbent (network) that is fully distributed and has been without serious competition for decades and a startup that's a year and a half old. We're very happy to just take (market) share.
Lachlan: When we launched Fox News (in 1996), James and I were much younger, but I do remember the conversations around it. A lot of people internally in the company said, "Why would you launch a news service when there's CNN?" It's the same thing with ESPN (HOLLYWOOD REPORTER, 10/30 issue).
