While announcing the company’s earnings, News Corp. COO Chase Carey all but announced that the rumors about “the world’s worst kept secret,” a national cable network from Fox’s sports division to compete with ESPN.
From Daily Variety:
“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.
Competition for ESPN could mean better sports programming all around, but the travails of the NBC Sports Network on cable TV thus far have shown ESPN is a tough nut to crack.