Fox' Murdoch Says Company Will Be Fine Despite Reports Of Asset Sale To Disney
Fox co-Chair Lachlan Murdoch said that the company is "equipped to stay the course in a changing media landscape" despite reports of a possible sale of the company's movie and TV studios to Disney, according to Stephen Battaglio of the L.A. TIMES. Murdoch said, "Let me be very clear -- Fox does have the required scale to continue to both execute on our growth strategy and deliver increased returns to shareholders. Our businesses and brands are stronger than ever." Murdoch and his brother, Fox CEO James Murdoch, said that "any loss of cable and satellite TV customers is being offset by gains from those signing up for direct-to-consumer streaming services such as Hulu." Battaglio notes Q1 revenue came to $7B for Fox, up 8% from the same period last year. Meanwhile, profit for the company's programming assets saw a year-over-year increase of 9% to $151M. Earnings at the TV stations and the broadcast nets came in at $122M, a 36% drop from a year earlier. Higher rights fees for NFL and college football games also "kicked in during the quarter, driving up costs" (L.A. TIMES, 11/9). The Wall Street Journal's Joe Flint said the idea of the Murdoch family selling assets like those described in Disney talks is a "seismic shift in their thoughts on the media world and their role in it" ("Closing Bell," CNBC, 11/8). CNBC's Julia Boorstin noted that despite concerns about lower NFL ratings and Fox' interest in paying for sports rights going forward, the Murdochs believe sports is a "key driver of viewing." The Murdochs said that they will "look at each set of rights as they come up" ("Fast Money," CNBC, 11/8). At presstime, shares of Fox were trading at $28.67, up 4.8% from the close of business yesterday (THE DAILY).
AN INDUSTRY IN FLUX: The WALL STREET JOURNAL's Ben Fritz noted Disney's market cap is "almost twice as big" as that of Netflix, yet its pursuit of Fox' entertainment assets "indicates that repositioning its television business to compete in the streaming, a-la-carte world Netflix dominates has become Disney’s priority." Disney’s TV operation alone is "substantially larger than Netflix, but its growth has stalled while its digital competitor is booming." If Disney "isn't looking to take down Netflix, it is reckoning with the company's success" (WALL STREET JOURNAL, 11/8). RECODE's Peter Kafka noted potential sales involving Scripps, Time Warner and Fox are "all very different transactions." Kafka: "But they’re also the same: Managers of giant media properties have looked around and decided that it’s time to sell" (RECODE.net, 11/7).