Murdoch said the scarcity value of audiences coming together around national events continues to riseGETTY IMAGES
Several analysts yesterday "questioned the strategy behind Fox’s recent decision" to spend $3.3B for the rights to air "Thursday Night Football" over five years given the NFL’s recent ratings challenges, according to Maria Armental of the WALL STREET JOURNAL. 21st Century Fox CEO James Murdoch during an earnings call "defended the move." Murdoch: "As the scarcity value of large audiences coming together around national events continues to rise, we want to be the home of that kind of compelling product." Fox execs said that they see live sports coverage as "integral." Meanwhile, Armental notes Fox' cable networks division "powered revenue growth" in Q2, but higher costs related to sports programming and theatrical releases "weighed on operating profit." The quarterly report is the first since Fox in December "agreed to sell most of its entertainment assets" to Disney in a $52.4B deal. Overall, Fox' Q2 profit "more than doubled" to $1.83B from $856M a year earlier. Fox' cable networks unit, home to FS1, "drove the December quarter results with a 12% increase in domestic affiliate fee revenue." Lower ratings for NFL and World Series games, along with lower revenue from political ads, "contributed to a difficult quarter for the broadcast TV unit." Revenue was down 6% to $1.81B, while sports programming costs rose and operating profit in the segment "plunged" 85% (WALL STREET JOURNAL, 2/8). Fox Exec Chair Lachlan Murdoch also noted that Fox Sports featured 34% "more live sports coverage than the nearest competitor" over the past year (HOLLYWOODREPORTER.com, 2/7).
