×
You will be redirected back to your article in seconds

Chase Carey: Sports net is ‘worst kept secret’

News Corp. reports strong Q2 earns but lowers full-year estimates

The ‘Ahas!’ were audible Wednesday as News Corp. COO Chase Carey admitted what he called “the world’s worst-kept secret”: Fox’s plan to launch a national sports network to compete with ESPN.

“That’s the plan we’re on. That’s what we’re planning to execute,” he said on an earnings conference call with analysts. Carey stayed mum on the launch date, preferring to stoke pent-up demand, he said. “If we were launching something next month, we’d have to announce it. We’re not.”

News Corp. unveiled robust fiscal second quarter earnings that were powered by growth at its cable networks. But softness at the Fox broadcast net, Sky Italia and the Australian newspaper biz forced the conglom to lower its profit estimates for the fiscal year ending in June.

Net income for the December quarter surged to $2.4 billion from $1.1 billion. Revenue rose 5% to $9.4 billion.

At Fox, “The X Factor” and post-season NFL football declined from the year before. Carey was candid about “X Factor’s” underwhelming perf and said the network needs to invest in developing new signature series.

“Clearly, ‘X-Factor’ was a disappointment for us. Maybe early in the year we were a little too optimistic,” he said.

“We need to create shows that are franchise shows for us to build a business around. We need to have shows that can be a signature that you build a night around… That’s the core challenge for us as we move forward,” Carey said.

Broadcast television operating income rose 19% to $224 million, fueled by higher retrans revenue and local political advertising at Fox O&O stations, offset by lower national advertising at the broadcast network on lower primetime ratings. Total revenue was flat at about $1.5 billion.

Cable networks profit grew 7% to $945 million year-over-year on a 19% revenue surge powered by regional sports, Fox News, FX and National Geographic. The gains were offset, however, by a 26% jump in expenses in part from higher sports programming costs.

Affiliate revenue rose 13% domestically and 42% internationally driven by the addition of Fox Sports Australia and Fox Star Sports Asia.

Advertising revenue rose 8% domestically and 29% internationally, respectively.

Last fall, News Corp. acquired the 50% of ESPN Star Sports it didn’t own for $220 million and renamed it Fox Star Sports Asia. It also paid $2.2 billion for Consolidated Media Holdings, which owned half of Fox Sports Australia. That move allowed News Corp. to consolidate the net’s earnings for the first time.

Filmed entertainment profit dipped by $10 million to $383 million; “Taken 2” and “Life of Pi” were top performers. Revenue was flat at $2 billion.

Sky Italia swung to a loss of $20 million from a $6 million profit the year before. Revenue dipped 6% to $890 million. Sky reported a net loss of 28,000 subscribers in the quarter.

Carey said News Corp. will cut its cost base at the satcaster, and he wasn’t upbeat about the Italian economy recovering anytime soon.

Publishing, which includes HarperCollins, Dow Jones and U.S., U.K. and Australian newspapers, saw earnings tip higher to $234 million from $218 million. Revenue of $2.1 million was a hair higher.

News Corp. said the latest profit figure includes $1.4 billion in gains on the additional ownership in Fox Sports Australia and Fox Star Sports Asia; $56 million in charges related to the phone hacking scandal in the U.K. (vs. $87 million the year before) and $23 million in costs related to the planned separation of News Corp. into two companies.

The split into an entertainment company called Fox Group and a publisher that will keep the News Corp. name is on track to close by the end of June, Carey said.

Popular on Variety

More TV

  • Reed Hastings seen on day one

    Reed Hastings on the Streamer Wars: 'It's a Whole New World Starting in November'

    After dominating the subscription streaming scene for so long, Netflix is girding for a new phase in the SVOD wars with the entry of more deep-pocketed players like Disney and Apple, CEO Reed Hastings said Friday. “While we’ve been competing with many people in the last decade, it’s a whole new world starting in November…between [...]

  • BBC ITV BritBox Streaming

    Viacom's Channel 5 and Comedy Central Join BritBox Ahead of Its U.K. Launch

    Viacom-owned Channel 5 and Comedy Central have joined BritBox, the “best-of-British” subscription streaming service created by the BBC and ITV. The platform, already available in North America, is due to launch on home turf in Britain by year’s end. Under the deal with Viacom, shows from the U.K.’s Channel 5 can appear on BritBox following [...]

  • The-Head

    Behind the Scenes With Mediapro’s Antarctic Thriller Series 'The Head'

    On Sept. 13, the cast and crew of Mediapro’s upcoming dramatic thriller “The Head” gathered at a swanky Santa Cruz de Tenerife hotel to kick off promotional duties for this English-language series, which will wrap shooting later this month. It was day 50 of production, and the cast had been working late, rushing to get [...]

  • The Plague Season 2 Spanish TV

    Telefonica, Atresmedia to Create Content Factory Behemoth

    SAN SEBASTIAN  — In a game-changing move for Spanish-language production Telefonica, Europe’s third biggest telco, and Atresmedia, the original co-creators of “La Casa de Papel,” are uniting to create a new joint contents production giant. Aimed at gaining more scale and uniting talent relations – writers, directors and producers – the 50/50 joint venture will [...]

  • KKR-Backed German Media Conglomerate Finally Has

    KKR-Backed German Media Conglomerate Finally Has a Name: Leonine

    The KKR-backed German media company formed through the merger of Tele München Group, Universum Film, i&u TV, and Wiedemann & Berg Film finally has a name: Leonine. The company revealed its moniker Friday, saying that “Leonine” met its criteria of being associated with its home region of Bavaria and Munich, in southern Germany, and of [...]

  • PERFECT LIFE

    San Sebastian: Leticia Dolera on Canneseries Winner ‘Perfect Life’

    SAN SEBASTIAN —  “La Casa de Papel” (“Money Heist”) may be the most seen of Spanish series this year. Leticia Dolera’s still-to-bow “Perfect Life,” however, is the most laureled, sweeping at April’s 2nd Canneseries TV festival both best series and best special performance for its female leads, Dolera herself, Celia Freijeiro and Aixa Villagrán, from [...]

  • Screen writer Beau WillimonMary Queen of

    Beau Willimon Re-Elected as President of Writers Guild of America East

    Beau Willimon, the playwright and showrunner who launched Netflix’s “House of Cards,” has been re-elected without opposition to a two-year term as president of the Writers Guild of America East. Willimon also ran unopposed in 2017 to succeed Michael Winship. Kathy McGee was elected to the vice president slot over Phil Pilato. Secretary-treasurer Bob Schneider [...]

More From Our Brands

Access exclusive content