Finance

Fox Touts Scale, Performance

Murdochs decline to comment on sale speculation; point to growth in cable, satellite 11/08/2017 6:13 PM Eastern
21st Century Fox co-chair Lachlan Murdoch: "Fox has the required scale to continue to both execute on our growth strategy and deliver increased returns to shareholders."

Lachlan and James Murdoch sure didn’t sound like two media chiefs hot to unload their programming assets Wednesday, spending a good portion of 21st Century Fox’s fiscal first quarter earnings call touting the growth prospects for their cable and satellite operations.

But while neither executive would directly address speculation around their desire to sell assets, they didn’t quite squash all of chatter either.

Fox was said to be in talks, since ended, to sell its movie studio and cable assets like FX Networks and National Geographic channel as well as its 39% stake in European satellite company Sky to The Walt Disney Co. While Fox co-executive chairman Lachlan Murdoch opened up the earnings call telling analyst he would not respond to media speculation, he had plenty of wind left to tout the company’s ongoing operations.

Overall results were strong – revenue was up 8% in the fiscal first quarter and affiliate fee revenue for its cable channels rose 11%, due to contractual increases across all of its brands.

“We told you many years ago that innovative disruption would come to our industry,” Lachlan Murdoch said on the call. “…We moved early to jettison our thin brands and went deep with investments for our rich distinctive brands, when many market pundits were skeptical of this approach.”

He added that because of that strategy, Fox’s brands have full carriage on all traditional and newly launched platforms.

“There is a lot of talk about the growing importance of scale in the media industry. And let me be very clear, Fox has the required scale to continue to both execute on our growth strategy and deliver increased returns to shareholders,”  Lachlan Murdoch said. “We are specifically seeing this in our affiliate fee growth again this quarter and the success of Hulu and our inclusion in all of the emerging MVPDs. We are excited about all of our brands and the breadth of opportunity they continue to offer.”

Asked if the changing landscape Fox is rethinking its asset mix and whether scale matters less or more today, CEO James Murdoch said that the company has changed its portfolio over the past several years.

“We’ve really simplified our operating model, we’ve got a great set of brands and a great set of assets that we really like,” James Murdoch said. “And as you can see from these quarterly results and from the past couple of quarters I hope, a real trajectory of good performance.”

James Murdoch also commented on plans to fully consolidate the Sky satellite TV business, adding that the company continues to work with U.K regulators and hopes to receive approval of the transaction by the middle of 2018.

 

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