Discounting the demise of CNNfn as a factor in moving ahead, News Corp. chairman Rupert Murdoch said Wednesday that he’ll launch a business channel in the “foreseeable future.”
During a first-quarter conference call, Murdoch told reporters he couldn’t pin down exactly when the new channel would debut, although he did say it would use the infrastructure and share overhead with his Fox News Channel.
Murdoch has previously said News Corp. planned to create a financial-news network, and the issue surfaced Wednesday when the looming shutdown of CNNfn came up during the call. Murdoch reiterated that he would proceed with the business channel, while outlining the reasons why its timetable is hazy.
“Distribution will be a factor,” Murdoch said. “CNNfn was never a factor in our thinking at all. CNBC is. We expect to go ahead with that in the foreseeable future. I can’t give you a date because it depends on negotiations that are only just beginning for distribution.”
During the conference call, News Corp. president Peter Chernin also provided an update on another network the media giant has in the hopper: Fox Reality Channel.
“We’re on plan to launch the reality channel in the first half of the calendar year,” Chernin said. “Right now, it looks like we’ll be able to launch that somewhere between 10 million and 15 million subs, which will be a pretty substantial launch.”
He didn’t discuss where that distribution will come from, or if it includes carriage on the service News Corp. now has a controlling interest in -- namely direct-broadcast satellite service DirecTV Inc. with its 12 million subscribers.
Chernin said Fox Entertainment Group was “close” to completing a carriage-deal renewal for its cable networks, including FX, with DirecTV. But at another point, he made it sound like the deal was actually done.
When asked which side had the leverage in those talks, Chernin said, “I would say they were certainly well-discussed negotiations, but I’m not sure either side won. I think there was a fair deal for both sides. I think Fox got the fair and appropriate value for our channels, and I think DirecTV certainly negotiated this at arm’s length and paid marketplace pricing.”
There have been published reports that News Corp. was asking DirecTV for compensation for retransmission consent for its Fox TV stations as part of the renewal for its cable networks. When asked about that, Chernin was closed-mouthed about those details.
“I have nothing to say about it,” he said. “We will announce our deal when we’re ready to announce it and we’ll talk about what our strategies are.”
However, Chernin then went on to talk about News Corp.’s philosophy about retransmission consent in general.
“What I would say is: Look, we expect to be adequately compensated for retransmission,” he said. “And we think the value of our broadcast stations, the strong Fox stations -- not only Fox, obviously primetime, but also our news product, our sports product and also the growing strength of our UPN stations -- we expect to be adequately compensated by all of the constituents that we deal with.”
He added that DirecTV’s renewal with Fox didn’t include Fox News, as its contract still hadn’t expired.
As an aside, Murdoch noted that on election night, Fox News generated more revenue than during its first eight months of existence: $5 million.
“It sounds good, but there wasn’t much revenue the first eight months,” he added, sparking laughter.
On a final note, on the implications of media deregulation, Murdoch said, “There’s so much media in this country that no one can possibly complain about concentration.”
News Corp. reported consolidated revenues of $5.2 billion for its fiscal first quarter, up 12% from the year-ago period.
Consolidated operating income rose 12% to $805 million from $719 million in the prior-year quarter.
News Corp. said its cable networks posted operating income of $196 million, a $63 million gain (47%) from the year-earlier quarter.
Strong advertising-sales growth led Fox News to a 20% gain in revenue during the period.
At the company’s other cable channels -- including its regional sports networks, FX and Speed Channel -- operating profit jumped 39% for the quarter driven by strong revenue growth at the regional sports networks and FX.
Higher affiliate revenues at the regional sports networks -- largely due to increased rates and additional DBS subscribers -- were partially offset by increased programming costs from higher rights fees and additional events versus the same period a year ago, News Corp. said.
“Double-digit earnings gains at our television, cable, newspapers and magazines and inserts segments, as well as strong profits from filmed entertainment, underscore the sustained financial strength across our diverse and balanced collection of assets,” Murdoch said in a prepared statement.
“At the same time, we are also quickly establishing another growth engine with our global pay TV assets, particularly at Sky Italia, BSkyB [British Sky Broadcasting Group plc] and DirecTV [Group Inc.], each of which has positioned itself for substantial earnings generation in the years ahead,” he added.