21st Century Fox CEO James Murdoch dodged a question about the prospect of Fox selling a large portion of its assets to Disney in his Q&A on Tuesday morning at the UBS Global Media and Communications Conference.
Murdoch took the stage at the investor confab about an hour after CNBC reported that Fox is closing in on a $60 billion deal with Disney to sell its film and TV studio, FX and Nat Geo cable networks, regional Fox Sports networks, and other key assets. Murdoch wouldn’t budge when pressed to comment on the report. 21st Century Fox has yet to formally make a statement on rumors of sale talks with both Disney and Comcast that have swirled in recent weeks.
“There’s nothing to add to that other than the nothing we’ve said so far,” Murdoch said. He did allow that the company has an obligation to consider options for its assets in a changing marketplace.
“Changing the shape of the business is always going to (be considered in terms of) what is going to create the most value to all of our shareholders,” he said.
Later in the 45-minute Q&A, Murdoch obliquely referred to the Disney sale prospect in discussing how the Fox broadcast network would operate if it were no longer connected to the 20th Century Fox Television production unit.
“I think it’s feasible,” he said, noting that all networks are pushing for greater ownership stakes in the programs they carry. “For it to just go away is trickier economics.”
Murdoch made a point of touting the growth prospects of FX Networks and the National Geographic Channel group. He said investments in programming for those brands have paid off in the form of higher affiliate fees and better traction with consumers. “It all comes down to, over the long-term, how you drive affiliate growth and make them really present in people’s decision-stack,” he said. “The creative excellence at FX is really, really gratifying to see. We encourage them to set the bar high.”
The Fox chief also had high praise for the film studio’s upcoming slate. He cited Steven Spielberg’s “The Post” as “a great movie — really special,” and said there were “high hopes” for upcoming specialty pics “Three Billboards Outside Ebbing, Missouri,” “The Shape of Water,” and “Isle of Dogs.”
Murdoch added that the company had been “a little bit frustrated for a number of years” with the creative output of 20th Century Fox, but the current regime, under Stacey Snider, “has really leaned into it, taking some risks.”
Among other topics raised during the session:
NFL ratings: Murdoch acknowledged that declining NFL ratings have hit TV revenue, particularly for Fox’s local stations. He suggested that some of the problem may be a surfeit of pigskin action. “There’s just a lot of football” on TV these days, he said, citing the volume of college games and “Thursday Night Football.” “The volume is having an impact on the average ratings for any one slot,” he said. At the same time, even with tough year-over-year comps, “the NFL remains tremendously powerful,” he stressed.
TV station deals: Murdoch would not comment on the impact of the Sinclair-Tribune merger on the Fox network’s distribution profile (the deal would make Sinclair the largest owner of Fox affiliates by far). There’s been rumblings that Fox would try to buy some stations from Sinclair, if the FCC forces divestitures as part of approving the $3.9 billion transaction. Acquiring more local TV stations “is not a place where we want to go and deploy a ton of capital,” he said, but they would be open to opportunities to “enhance our distribution opportunities” and potential to generate more retrans dollars from MVPDs.
“Buffy” regrets: 20th Century Fox TV has prospered by selling hit shows to networks outside of the Fox family. NBC’s “This Is Us” is the latest example of a show from the studio that became a hit for a rival broadcaster. But that still provides Fox a diverse mix of revenue sources from its investment in content. It’s also important that producers find the right home for the show, even if it costs the Fox network a potential hit. The only 20th TV show that Murdoch feels should have been on Fox’s air was “Buffy the Vampire Slayer,” which went to the WB Network back in 1997.