News Corp. chairman Rupert Murdoch was optimistic about a coming economic recovery, telling an audience at an industry conference here that he is beginning to see some signs of recovery, fueled by its cable channels and improvements at its broadcast unit.
Murdoch had called a bottom to the dismal ad market in News Corp.'s last quarterly conference call with analysts. Now he believes the upturn is here.
"A couple of months ago, I was daring enough to say that I felt we hit bottom," Murdoch said at the Goldman Sachs Communacopia conference here Tuesday. "We certainly feel that very strongly at the moment, particularly in the last few weeks. There has been plenty of advertising activity at the cable channels, film is doing very well. We're well ahead of last year."
Even its broadcasting unit, Fox Broadcasting Co., is showing some improvement. Murdoch said that CPMs (cost per thousands) are down less than 1%. At its station group, which News expects to be down about 20% to 30% for the fiscal year, has been showing improvement every month. September pacings, he added, are down about 8%, which is a marked improvement over the double digit declines of past months.
"It's been a very uncomfortable ride from last November through as recently as July," Murdoch said. "We're starting to see a little movement. My guess is that the consensus is about right -- we're going to get a nice bump and then it will settle down to a fairly slow recovery."
On the cable side, operating income and revenue growth has been fueled by affiliate fee increases at Fox News Channel, which Murdoch estimated saw a 200% increase in the last round of negotiations.
"We should have put it up by 400%," Murdoch said half jokingly. "We'll get around to that in another couple of years."
Murdoch also singled out News Corp.'s Fox Sports regional sports networks as a future source of affiliate fee increases.
"We are undercharging for all of our local sports networks, which are absolutely essential carriage to any cable company," Murdoch said.
One thing the media giant won't be doing, however, is bidding for the 2014 and 2016 Olympic Games.
"If the next Summer Olympics after London [in 2010] were in Chicago, that would be very tempting, but I imagine the bidding will be high," Murdoch said. "In spite of all the propaganda and I don't want to call anyone a liar, but nobody has ever made any money off of them [the Olympic Games]."