NEW YORK — Fox Entertainment won’t bid for Chris-Craft “unless something changes dramatically,” said Rupert Murdoch Tuesday as the chairman-CEO of Fox parent News Corp. speculated that the station group will wind up with either Tribune or Viacom/CBS.
But the News Corp. topper saved his biggest news, at least potentially, for later. Murdoch, perhaps playfully, told his Fox News Channel that General Electric Co. has offered to sell its NBC television network to Time Warner Inc. for $25 billion.
“I understand … one or two people on the board are very much in favor of buying it and the rest are very much opposed to it,” Murdoch told commentator Neil Cavuto.
But a GE spokeswoman said there was “no truth” to what Murdoch said. “We don’t usually comment on the musings of other people, but in this case we’re giving a flat-out denial.” And Time Warner spokesman Ed Adler said, “It’s just not true.” Further, the deal could not be closed without major changes in the FCC’s ownership rules, which bar broadcasters from owning cable systems and TV stations in the same market.
Fox’s decision to pass on a bid for Christ-Craft was based on a combination of price and regulatory concerns, Murdoch told reporters after Fox’s first annual shareholders meeting since it became a public company. Fox-owned stations already cover nearly 35% of the nation, the federal limit.
Murdoch, flanked by News Corp. president and co-chief operating officer Peter Chernin and co-COO Chase Carey, also defended the financials of the film studio against tough year-on-year comparisons, anticipated improvements at the Fox TV network and discussed an eventual spinoff of Internet assets led by Fox.com, a new online venture to launch early next year.
“The film division had a lean year” in fiscal 1999, but who wouldn’t coming up against “Titanic” last year, Murdoch asked.
Chernin noted that Fox received only a “modest fee” to distribute the summer blockbuster “Star Wars: Episode I — The Phantom Menace,” and he and Murdoch touted the upcoming slate as one of the studio’s strongest ever with “Anna and the King,” “The Beach,” “Cast Away,” “Me, Myself and Irene” and others featuring an array of stars and A-lis directors.
Cruise in control
Fox is planning to begin production on Tom Cruise thriller “Minority Report” this spring, Chernin added, contingent on approval of a rewritten script received Tuesday.
Addressing the current bout of cost cutting at major studios, Chernin said Fox, with its manageable slate of 15-20 pics a year, is ahead of its peers. The studio’s scare over the soaring budget of “Titanic” a few years ago brought it “religion” early, he said, and its negative costs are at least 15% below the Motion Picture Assn. of America’s average.
Murdoch nodded, but chimed in, “For all that, they’re still too high.”
Chernin said Fox has a “premier financing vehicle in New Regency” but remains adamantly opposed to split-rights deals, which dilute a pic’s risk but erode upside potential as well. “If you don’t believe there’s an upside, you shouldn’t be in this business,” he noted.
At the faltering Fox net, “We’re working very hard at our schedule and our marketing,” Murdoch said, citing the recent promotion of Fox exec Sandy Grushow to the newly created post of chairman of Fox Entertainment Television. He’ll oversee Doug Herzog, who recently joined the network from Comedy Central.
“I fully expect better results soon,” Murdoch added.
Chernin said Fox is eating into its unsold upfront ad time for “make goods,” or extra commercial time, for advertisers since the network hasn’t delivered the ratings it promised.
Execs noted that sports programming, unlike entertainment, has exceeded its commitments to advertisers. Fox and its cable units recently won the rights to six years of NASCAR for the February-June portion of the stock-car racing season. The company isn’t planning to ask its broadcast affiliates to share the cost.
“If we had outbid CBS on college basketball, we may have had to pass around the begging cup,” Murdoch said. Last week, CBS outbid Fox as well as ABC/ESPN on rights to the NCAA Men’s Basketball Tournament, agreeing to pay $6.2 billion for 11 years starting in 2003. Murdoch said the Eye net topped Fox’s bid by more than $100 million a year. “Maybe they have some secret,” he added.
Sports channels are a key business for Fox, he said, especially since the company’s recent purchase of partner Liberty Media’s 50% stake in Fox Sports Net. Murdoch called the now wholly owned network “a potent competitor to the established ESPN franchise.”
He also recently brought in former Warner Bros. co-chief Bob Daly to run News Corp.’s ailing Los Angeles Dodgers baseball team. Murdoch said there are no plans for Daly to take a larger role within the entertainment company, although his advice will always be welcome.
The TV station group is faring better than the network due, in part, to a booming economy and a jump in technology and Internet advertising. The execs were noncommittal on duopoly, saying they’d certainly be interested in pursuing two stations in a market but only for the right price.
Fox currently has a duopoly in Dallas.
Along with Chris-Craft, Fox has also apparently been eyeing Telemundo, a Spanish-language broadcaster whose investors include Sony Corp. and Liberty Media. But that’s a tricky deal, too, Murdoch said, since it means entering the Hispanic market in second place, far behind Univision, which rules this market.
The TV studio, with a record number of shows on primetime this season, is roaring. Execs said Fox already has booked a whopping $2.5 billion in syndication revenues from its stable of programming that will start to show up on the bottom line in September 2001 — and there’s more to come as additional shows mature into syndication.
Cash could also roll in from a spinoff of Fox.com into a separate public company. The site, with an initial investment of about $10 million, will launch early next year, focusing on e-commerce and tie-ins with Fox properties, and moving into original comedy and entertainment content.
Murdoch also said News Corp. is in talks to invest cash and other assets in Healtheon/WebMD Corp. to become a “large” minority shareholder in the Internet health-information company.
(Michael Schneider in Los Angeles and Christopher Stern in Washington, D.C., contributed to this report.)