News Corp. Eyes New Network5/06/2004 5:59 AM Eastern
Buoyed by strong financial results at its cable- and broadcast-television operations, News Corp. said it is planning to launch a new cable channel -- likely in the business, entertainment or sports-news genre -- by the end of the year.
News Corp. reported strong earnings growth in its fiscal third quarter -- net income was up 69% to $465 million -- fueled by gains in its cable and broadcast networks. Revenue rose 19% to $5.2 billion and operating income rose 22% to $838 million.
At the cable networks, operating income was up 51% to $143 million, driven by strong performance at Fox News Channel (where operating income doubled on a double-digit increase in advertising revenue) and its Fox Cable Networks Group (where a 15% increase in operating income was driven by affiliate revenue growth).
During a conference call with analysts, chairman Rupert Murdoch said he would launch a new channel later this year.
“We’re looking at a number of genres, which would be natural extensions of our Fox brands,” Murdoch said on the conference call.
He would not reveal what that channel would be, but he said, “Whatever we choose, I suspect it will be a significant uplift to DirecTV [Inc.].”
That channel would also have to be shared with cable operators -- as part of government approval of the DirecTV purchase, News Corp. agreed not to launch channels that were exclusive to DirecTV.
The industry has been waiting for News Corp. to launch a channel after winning the 12.5 million-subscriber platform of DirecTV. Many had expected the media giant to launch a business-news channel to rival CNBC.
News Corp. also said on the conference call that it is in talks to renew the contract of president and chief operating officer Peter Chernin, who had been rumored to be a possible replacement candidate for current The Walt Disney Co. CEO Michael Eisner.
Murdoch said talks with Chernin are “very advanced and in the hands of lawyers.”
Later, on Fox News’ Your World with Neil Cavuto, Murdoch said the company was considering business, entertainment and sports channels for the new launch.
“We’ve got a lot of plans for different channels, but we haven’t chosen which way we will go,” Murdoch told Cavuto. “But we certainly will before the year is out. Whether we’ll have another channel on the air or be very close to it, we will definitely have shown our hand ...whether it will be in sports or another aspect of news or entertainment has yet to be decided.”