Fox Boss Lachlan Murdoch On NFL Talks, Fox News And Life After Covid: “It’s A Good Year Not To Own Movie Studios And Theme Parks”

Lachlan Murdoch

About two years after Fox Corp. started a new chapter as a slimmed-down, TV-centric company, CEO Lachlan Murdoch observed, “It’s a good year not to own movie studios and theme parks.”

In a rare appearance at a Wall Street conference, the executive weighed in on NFL negotiations, the outlook for Fox News, ad-supported streaming and other topics. Covid-19 has also posed a number of challenges to Fox, even though it doesn’t have movie or parks assets, with advertising and sports taking a dive last spring before recovering.

Talks with the NFL talks have “a ways to go,” Murdoch cautioned during an online session at Morgan Stanley’s annual Technology, Media & Telecom conference. Participants have signaled the league and its media partners could take the wraps off deal announcements as soon as next week. “The most likely scenario” would be for Fox to ditch Thursday Night Football, which it acquired in 2019 for $650 million a year in a five-year pact. That would leave the network’s traditional Sunday late-afternoon slot, which has proven to be the beach-iest of NFL beachfront property, ratings-wise.

“When we picked up Thursday night, we did so because it provided a great programming platform to a business that would be spinning off” from 21st Century Fox, he said. “It has offered us a tremendous platform” from which to market franchises like The Masked Singer, he said, “but it was always something that we always knew would give us some optionality.”

Murdoch didn’t address specific numbers, but reports have said Fox and other broadcast rights holders could see fees double over agreements lasting a full decade. In Fox’s case, the ticket could be as much as $2 billion a year. “These are big dollars,” Murchoch acknowledged, but said the longer duration of the pact brings some advantages. “Historically, they’ve gone up, not down” in value, he said, meaning “a longer-term deal makes sense.”

Fox News has been under the microscope for its ratings declines and its proper place in the TV news ecosystem in a world after Donald Trump as president. The variability in the network’s ratings was entirely predictable, Murdoch maintained — except for one piece. “What we didn’t foresee was the news cycle post the election,” he said, meaning Trump “not accepting the results” and the January 6 Capital assault and the impeachment trial.

CNN and MSNBC saw “huge spikes” with their coverage of the aforementioned events, but then have settled back down. In February, Fox stabilized and won primetime and has run “neck-and-neck” with MSNBC during the day.

Looking out at 2021 and beyond, Murdoch said Fox has a chance to play a role similar to the one MSNBC played during the Trump years — the “loyal opposition,” as he put it. “They called out the president when he needed to be called out. That’s our role now in the Biden administration.”

In terms of outlets to the right of Fox News, like NewsMax and One America News, Murdoch said, “We welcome the competition. But that’s different from saying that we have to change our programming or change our direction because of that.” He said “the center-right” is “where America is.” About 75 million Americans voted for a Republican president, “sometimes in spite of his personality at times. They believe in those politics. They believe in those policies and those positions. And that’s what we represent.”

Murdoch spent the first 10 minutes of the session tubthumping for Tubi, the ad-supported streaming service the company acquired for $440 million in 2020. He said Tubi has grown quickly and shown a profit, which he joked “is a bad thing,” indicating a preference for reinvesting profit back into the streaming service.

As to advertising, on a national level Murdoch said the company is seeing “great strength” heading into pre-upfront discussions with advertisers. Scatter pricing for entertainment programming is as much as 50% above upfront levels, he said, and up to 20% in news and mid-single digits in sports. On the local level, where Fox operates a cash-generating string of stations, the station group is “pacing down,” he said. But if the Super Bowl and political comparisons are stripped out, the pacing is flat.

In the current quarter, comparisons between the current quarter of calendar 2021 with the year-ago period, show “staggering” gains because of the damage done by Covid. Digital advertising is “very, very strong,” and Tubi, which cleared $100 million in the most recent quarter, is on pace for more growth.

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