21st Century Fox co-executive chairman Lachlan Murdoch defended the current scale of the media conglomerate Wednesday at its annual shareholders meeting — indirectly addressing recent speculation triggered by reports of a possible sale.
“There’s a lot of talk about the growing importance of scale in the media industry,” Murdoch said Wednesday in his prepared remarks. “Sub-scale players are finding it difficult to leverage their positions in new and emerging video platforms. Let me be very clear: We are not in that category. We have the required scale to continue to both execute on our aggressive growth strategy and deliver significant increased returns to shareholders.”
Murdoch pointed to the inclusion of Fox brands on new digital MVPDs as an indicator of the strength of its portfolio.
The shareholders meeting took place fewer than two weeks after reports emerged that 21st Century Fox had held discussions with the the Walt Disney Co. about a possible sale of the bulk of Fox’s entertainment assets. Although talks apparently ran aground, many analysts and observers interpreted them as a signal that the Murdoch family, which has a controlling interest in 21st Century Fox, feels that the company does not have and cannot acquire the scale necessary to compete with the likes of Disney and a potentially combined AT&T-Time Warner, as well as digital competitors such as Netflix, Apple, and Amazon.
Fox had pursued an acquisition of Time Warner in 2014 in an effort to acquire that scale, but fell short.
Murdoch also on Wednesday addressed Fox’s proposed takeover of U.K. broadcast company Sky, which has come under heavy scrutiny from British regulators, and which, he said, “We are confident will close by the middle of next year.”
Earlier this month, Fox reported better-than-expected profits in the fourth fiscal quarter, although the company’s revenues fell short of projections. Revenues at the company grew 2% to $6.75 billion for the three-month period ending in June.
In introductory remarks at Wednesday’s meeting, founder and co-executive chairman Rupert Murdoch said, “Universal connectivity and access to nearly every piece of content ever made is ushering in a period of remarkable opportunity” for the company.