NEW YORK–News Corporation today announced the appointment of Antoinette Cook Bush as Executive Vice President and Global Head of Government Affairs for the new News Corporation, the proposed global publishing entity to be formed as part of the Company’s intended separation into two independent, publicly traded companies. In her new role, effective June 24, Ms. Bush will report to Robert Thomson, Chief Executive Officer of the new News Corporation, and be based in Washington, D.C. READ MORE »
News Corp chief Rupert Murdoch this morning sent this memo to staff everywhere. Again, while the parent company logo changes after the corporation splits, the film and TV studio’s 20th Century Fox name will not:
It isn’t the kind of thing a network exec wants to admit the week before broadcasters open the upfront ad sales season. But the News Corp COO, in a quarterly call with analysts, couldn’t avoid the fact that this season’s ratings declines show “it’s not been a great year for the broadcast business overall from a creative perspective.” Carey says it’s time for networks to “discard a few habits and rules and take some shots. Hopefully next week will be the beginning of that process.” While he didn’t offer specifics, he says one possibility is to “be a bit more targeted [in programming] and invest deeper—take fewer bets and bet deeper.” Carey acknowledged that as digital video becomes more popular “there’s no question there’ll be more and more choices and people will find those choices.” But the exec says he still has faith in broadcasting — as long as it can collect revenues from subscriptions as well as ad sales. He declined to offer more insight into his recent threat to make Fox a pay TV service if the courts jeopardize the dual revenue stream model. Some analysts say that could happen if justices agree that streaming service Aereo can distribute local over-the-air signals without paying broadcasters. “If that dual revenue stream is not available, there are other paths we can pursue,” Carey says. He adds that the “most exciting” opportunity for Hulu is to focus on boosting subscriptions. Broadcasters can add “original and other unique product” and “take advantage of its leadership position in the digital space.”
BSkyB revenues were up 6% to £5.38B ($8.37B) with operating profit beating forecasts by jumping 9% to £994M ($1.55B). The News Corp.-controlled company announced its third-quarter results this morning with CEO Jeremy Darroch noting that it would add 550 jobs to meet demand and serve a growing customer base. He added that the number of Internet- connected Sky+HD boxes grew by almost 45,000 each week during the quarter, leading to a five-fold increase in On Demand downloads and a 37% growth in movie rentals against last year. Britain’s largest pay-TV operator said it had over 30M paid-for subscription products across TV, broadband and telephony the first time in its history. Its customer base is now at 10.7M in the UK and Ireland. The churn rate was up, however, to 10.8% versus 10.1% in the comparable quarter last year. BSkyB competes most notably with BT and Virgin Media in the UK and is likely to see that competition heat up with John Malone’s Liberty Global recently getting the go-ahead from European authorities to acquire Virgin in a $23.3B takeover.
He’ll receive a total of at least $28.3M from both entities in the fiscal year that ends June 2014, up from $24.6M planned from News Corp for fiscal 2013, …
The new memorandum of understanding should end a suit in Delaware’s Chancery Court that stemmed from News Corp’s $675M acquisition of Elisabeth Murdoch’s Shine Group. Shareholders led by Amalgamated Bank charged that the high price showed that her dad, Rupert, “has operated News Corp. as his own private fiefdom with little or no effective oversight from the board.” Under the settlement, News Corp walks away with no admission of wrongdoing — but also agreeing to governance practices that enhance the power of independent directors, provide more transparency about the company’s political contributions, and encourage anonymous whistleblowing. Due to the unusual way the case was structured — Amalgamated sued the board on behalf of News Corp — the company will collect $139M from insurance proceeds. The agreement ends a headache for News Corp as it prepares to split into two companies: one featuring its entertainment assets and the other with publishing ones including The Wall Street Journal. News Corp says that it already has begun to modernize its governance and has “committed to building on those efforts going forward.”
UPDATE: Forget that News Corp is renaming its new separate media and entertainment business 21st Century Fox to take it into the future. 20th Century Fox is sticking to its past. ”The film …
BREAKING… 21st Century Fox replaces the previously announced name Fox Group for the independent media and entertainment company. The publishing side will retain the name News Corp when the Big Media corporation splits off its two main businesses. The new name will be effective with the separation and “draws on the Company’s creative heritage, while also speaking to the future as well as the innovation that defines its portfolio of businesses,” according to today’s press release. (I hear Rupert Murdoch‘s giant actually hired a naming company for this rather obvious choice unofficially pictured here.) Under the 21st Century Fox umbrella will be a global portfolio of cable and broadcasting networks and properties, including FOX, FX, FXX, FS1, Fox News Channel, Fox Business Network, Fox Sports, Fox Sports Network, National Geographic Channels, Fox Pan American Sports, MundoFox and STAR; film studio Twentieth Century Fox Film; and television production studios Twentieth Century Fox Television and Shine Group as well as its pay-television services in Europe and Asia, including Sky Deutschland, Sky Italia and its equity interests in BSkyB and Tata Sky. On June 28, 2012, News Corp announced the separation of its businesses into two separate independent companies, with the other containing newspapers, information services, and integrated marketing services, digital real estate services, book publishing, digital education and sports programming and pay-TV distribution in Australia. The split still needs federal regulatory approval. Here is Murdoch’s memo to all employees about the new name announcement:
BREAKING…This would be a nuclear option for News Corp, which owns 27 TV stations and serves dozens of affiliates. But the company COO’s threat to take Fox off the public airwaves — made today at the NAB annual confab in Las Vegas — suggests how deeply concerned broadcast moguls are about the possibility that they might lose their legal battle against Aereo, and how much that could undermine their ability to extract retransmission consent fees from cable and satellite providers. Aereo uses tiny antennas to capture broadcasters’ over-the-air signals which it then streams to local subscribers. It does so without TV stations’ permission, and without paying them a dime. Broadcasters say that violates their copyrights. But last week a U.S. Appeals Court rejected the industry’s plea to shutter Aereo during the trial over that claim. What’s more, it seemed to favor Aereo’s counterargument that it simply rents antennas, enabling customers to watch transmissions already available to them for free.
If Aereo prevails — and cable and satellite companies decide that they, too, can retransmit broadcast signals for free — then Carey says “We have no choice but to develop business solutions that ensure we continue to remain in the driver’s seat of our own destiny. One option could be converting the Fox broadcast network to a pay channel, which we would do in collaboration with both our content partners and affiliates.” News Corp-owned stations collected about $308M in retransmission consent fees last year, SNL Kagan estimates. That’s up 20% vs 2011 and accounted for about 19% of their total revenues.
I’m surprised to see Credit Suisse analyst Michael Senno’s raise his recommendation for News Corp this morning to “outperform” from “neutral.” A few weeks ago he warned that we should expect “modest” growth in …
Australian Government Prepares For Fight Over Media Reforms
News Corp warns that media reforms introduced to Parliament on Thursday local time could harm the company’s new publishing spinoff and may be challenged in the High Court. Kim Williams, CEO of Australia’s News Limited, attacked the proposal to create a public interest media advocate, which would have the power to approve or reject mergers and takeovers and oversee self-regulatory bodies such as the Australian Press Council. He described the legislation as an attempt by the Labor Government to “constrain and harness News Limited” and said the reforms may hurt the asset values of the new News Corp. The government also proposes creating a parliamentary committee to examine abolition of the rule prohibiting a broadcaster from reaching more than 75% of the country. The Liberal/National Party Coalition, which is heavily favored to win the federal election in September, has vowed to block or repeal the legislation. - Don Groves
Former BBC Daytime controller Liam Keelan was originally named dirctor of BSkyB‘s flagship Sky 1 HD back in December, but he later pulled out to move to BBC Worldwide. After opening up the search again, Sky has now …
The analysis today from Nomura Equity Research’s Michael Nathanson could dampen the mood at TV networks as we head into the big upfront ad sales season. The most startling discovery: total ad revenues didn’t grow at all in 2012 at the Big Media companies he tracks. Declines at Viacom and News Corp outweighed gains at Discovery and Scripps Networks while sales were “essentially flat” at CBS, Disney, and Time Warner. “Given the surge in media stocks, the aggregate 0% growth was somewhat surprising,” Nathanson says. Factoring out political and Olympics-related ads in 2012, he sees ad sales at the companies growing 3.6% in 2013. But the analyst is “cautious” about his forecast. The pickup in the U.S. economy has been “weak” and the ongoing budget stalemates portend “an uncertain economic future.” Meanwhile Internet-based media are taking market share, and driving ad rates down. “In effect, online advertising — specifically online display advertising — is enabling advertisers to reach their ‘eye-ball targets’ with less (and sometimes even no) ad dollar budget growth.” For example, last year media and entertainment companies cut their ad spending 4.2% — even as box office sales hit a record high.