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Tag: Lachlan Murdoch

  • Fox beat analyst expectations in fiscal Q2 earning

    Fox beat analyst expectations in fiscal Q2 earning

    MUMBAI– Fox Corporation reported financial results for the three months ended December 31, 2019.

     The Company reported total quarterly revenues of $3.78 bn, a 5 per cent increase from the $3.58 bn of revenues in the prior year quarter. This increase includes affiliate revenue growth of 7 per cent, reflecting growth at both the Television and Cable Network Programming segments, and advertising revenue growth of 1%, which was achieved despite the comparative effect of record political advertising revenues from the mid-term elections at the Company’s owned and operated television stations in the prior year quarter.

    The Company also reported a 32 per cent increase in other revenues, led by growth at the Cable Network Programming segment and higher revenues at the Other, Corporate and Eliminations segment attributable to the operation of the FOX Studios Lot for third parties and the consolidation of Credible Labs Inc.

    Quarterly net income increased to $314 million from the $24 million in the prior year quarter, primarily due to unrealized gains recognized in other, net related to changes in the fair values of the Company’s investments in Roku, Inc. and The Stars Group Inc., partially offset by higher operating, selling, general and administrative and net interest expenses. The increases in selling, general and administrative and net interest expenses primarily reflect higher costs related to FOX operating as a standalone public company following the Distribution.

    Quarterly net income attributable to Fox Corporation stockholders increased to $300 million ($0.48 per share) compared to $8 million ($0.01 per share) in the prior year quarter. Quarterly Adjusted EBITDA2 of $261 million was lower than the prior year quarter, primarily due to lower contributions at the Television segment. Adjusted net income attributable to Fox Corporation stockholders3 was $64 million ($0.10 per share), lower than the $268 million ($0.43 per share) adjusted result in the prior year quarter.

    Commenting on the results, Executive Chairman and Chief Executive Officer Lachlan Murdoch said: “Our results reaffirm that Fox Corporation is delivering on the operational and financial objectives that we established less than twelve months ago. Our brands are exhibiting strength in a competitive marketplace and delivering healthy top-line growth as we continue to invest strategically to expand the reach of our portfolio and further diversify our revenue streams. Meanwhile, we are taking a balanced approach to capital allocation, including the return of $500 million to shareholders in the form of share repurchases since our last earnings release. Coming off an incredibly successful Super Bowl LIV and with the buildup to the November Presidential Election ahead of us, we look forward to continuing our momentum through calendar 2020.”

  • Murdoch promotes 5 top execs to Fox ahead of Disney deal

    Murdoch promotes 5 top execs to Fox ahead of Disney deal

    MUMBAI: After Disney won the bid to acquire 21st Century Fox (21CF) assets against Comcast earlier this year, future CEO and chairman Lachlan Murdoch has set key leadership positions for the properties left behind in the merger that will now be called new Fox.

    Steve Tomsic, currently deputy CFO for 21CF, will be promoted to chief financial officer at new Fox. Eric Shanks, currently chief operating officer and executive producer at Fox Sports, will become CEO of Fox Sports.

    In a statement, Murdoch said, “Collectively they bring to Fox the vision, entrepreneurial spirit and proven track records to position Fox to seize future opportunities for its leading and deeply resonant brands across sports, news and entertainment.”

    Mike Biard will become president of operations and distribution for Fox, another key revenue function. His current title is president of distribution for the Fox Networks Group.

    Paul Cheesbrough will remain chief technology officer, but his job will be expanded to include oversight of the company’s direct-to-consumer platforms in anticipation of launching a streaming service.

    Marianne Gambelli will see her portfolio expand as she becomes president of ad sales. She manages ad sales for the Fox News channel and the Fox business network.

    Tomsic said, “We are fortunate to be able to continue working with these enormously talented executives who have helped make our businesses the incredible successes they are today.”

    The appointments of the soon-to-be leadership team will take effect after the Disney transaction closes. Disney is buying Fox’s television production and movie studio, FX cable channel, National Geographic, stake in Hulu and such international operations Star India.

  • Star India, FNG help prop up 21st CF Q2 numbers

    Star India, FNG help prop up 21st CF Q2 numbers

    BENGALURU: Rupert Murdoch’s media conglomerate 21st Century Fox has three segments–cable network programming (CNP) that contains Star India and Fox Networks Group International (FNG International), television and filmed entertainment (films). 21st Century Fox reported 4.6 per cent yoy growth in revenue for its second quarter ended 31 December 2017 (Q2 2018, the quarter under review) as compared with the corresponding year ago quarter (Q2-2017, prior year quarter). Of its three segments, it was only for CNP that Fox reported growth in revenue and increase in profits as operating income before depreciation and amortisation (OIBDA), for the other two divisions, the company reported decline in revenue combined with an even steeper decrease in segment OIBDA.

    21st Century Fox revenue for the quarter under review increased by 4.6 per cent yoy to USD 8,037 million from USD 7,682 million. OIBDA reduced 27.9 per cent yoy to USD 1,438 million from USD 1,994 million. However, net income attributable to Fox shareholders more than doubled (2.14 times) to USD 1,831 in Q2 2018 from USD 856 million because of a tax benefit of USD 1.84 billion. Quarterly income from continuing operations before income tax benefit of USD 703 million decreased 49.2 per cent yoy from the USD 1,385 million reported in the prior year quarter.

    Commenting on the results, 21st Century Fox executive chairmen Rupert and Lachlan Murdoch said, “We delivered another quarter of solid top-line revenue growth including the further acceleration of gains in global affiliate revenues and despite challenging revenue comparisons for our TV segment. Our results also reflect increased investment behind higher volumes of global sporting events as well as film releases from our studio, which led the industry in Golden Globe awards and Oscar nominations. Looking ahead, we are focused on continuing to deliver value to our shareholders through achieving our near-term growth plans, completing our proposed acquisition of the balance of Sky, obtaining the required approvals for the successful completion of our transaction with Disney and planning for the exciting launch of the new ‘Fox’.”

    CNP

    CNP quarterly segment OIBDA increased by 2.6 per cent as compared with the prior year quarter to USD 1,365 million driven by an 11 per cent revenue rise on higher affiliate, syndication and advertising revenue partially offset by a 15 per cent jump in expenses. The increase in expenses was primarily due to higher global sports programming costs reflecting the inaugural broadcasts of Big Ten college football at FS1 and Argentine Football Association matches at FNG International as well as the impact of contractual increases and more National Basketball Association games at the regional sports networks due to the earlier start of the season and a shift in timing of cricket matches at Star India.  

    Domestic affiliate revenue rose by 12 per cent driven by contractual rate increases across all of 21st Century Fox’s domestic brands. Domestic advertising revenue decreased 3 per cent from the prior year period due to lower general entertainment ratings primarily reflecting a lower volume of original series in the current quarter. Domestic OIBDA contributions increased 1 per cent over the prior year quarter as higher contributions from Fox News were partially offset by lower contributions from the domestic sports networks and National Geographic.

    International affiliate revenue increased 13 per cent driven by rate and subscriber growth at both FNG International and Star. International advertising revenue increased 14 per cent led by double digit growth at Star and continued growth at FNG International. International OIBDA contributions were 8 per cent higher than the prior year quarter as higher contributions at FNG International and Star entertainment networks were partially offset by lower contributions at Star sports networks where higher sports programming costs more than offset the higher reported revenues.

    Television

    Television reported quarterly segment OIBDA of USD 56 million, a decrease of 85 per cent against the USD 376 million reported for the prior year quarter. Quarterly segment revenue was 5.8 per cent lower yoy in Q2 2018 at USD 1,806 million than the USD 1,918 million in the corresponding period in the prior year. 21st Century Fox says that revenue declined as higher retransmission consent revenue was more than offset by lower advertising revenues reflecting lower cyclical political revenues at the TV stations, lower National Football League and World Series ratings and the absence of revenue generated in the prior year quarter by the granting of a licence of one of 21st Century Fox’s television stations to permit the commercial use of adjacent wireless spectrum in that market. The decrease in segment OIBDA was primarily driven by the lower revenues as well as higher contractual sports programming costs at the Fox Broadcast Network, including a higher volume of college football and National Football League games broadcast in the current year quarter.

    Films

    Films generated quarterly segment OIBDA of USD 131 million, a 66.3 per cent decrease from the USD 389 million reported in the prior year quarter. 21st Century Fox says that the OIBDA decrease was driven primarily by higher theatrical releasing costs which more than offset higher theatrical revenues in the quarter under review to support a heavier theatrical film release slate which included Murder on the Orient Express, Ferdinand, The Greatest Showman, The Shape of Water, Three Billboards Outside Ebbing, Missouri and The Post. Partially offsetting these higher expenses were higher television production contributions reflecting higher subscription video-on-demand revenue. Quarterly segment revenue of USD 2,246 million was similar (1 per cent yoy decline) to USD 2,269 million of the year-ago quarter as higher television production revenue offset lower film studio revenue reflecting lower home entertainment and pay and free TV licencing revenue says 21st Century Fox.

    Also Read :

    Disney to buy 21st Century Fox assets for $52.4 billion

    21st CF spins-off into new live news & sports co Fox

    Disney expected to announce 21 CF buyout tomorrow: media reports

     

     

  • Double digit growth at Star India helps push Fox’s numbers up

    Double digit growth at Star India helps push Fox’s numbers up

    BENGALURU: 21st Century Fox reported that international affiliate revenue increased 11 percent driven by rate and subscriber growth at both FNG International and Star India for its cable network programming segment for the quarter ending 30 September 2017. The segment’s international advertising revenue increased 10 percent led by double digit growth at Star India and continued growth at FNG International says a 21st Century Fox release. International OIBDA (Operating Income Before Depreciation and Amortisation) contributions were similar to the prior year quarter as higher contributions at Star India were offset by lower contributions at FNG International where higher entertainment and sports programming costs more than offset the higher reported revenues.

    21st Century Fox reported total quarterly revenues of $7.002 billion, a $496 million, or 8 percent, increase from the $6.51 billion of revenues, reported in the prior year’s quarter. This increase reflects revenue growth reported across all operating segments, led by higher affiliate revenues at both the cable network programming and television segments and higher content revenues at the filmed entertainment segment.

    The company reported quarterly income from continuing operations attributable to 21st Century Fox stockholders of $839 million ($0.45 per share), as compared to $827 million ($0.44 per share) reported in the prior year quarter. Excluding the net income effects of impairment and restructuring charges, Other, net and adjustments to equity earnings of affiliates adjusted quarterly earnings per share from continuing operations attributable to 21st Century Fox stockholders was $0.49 compared to the adjusted result of $0.51 for the same quarter of the prior year.

    Commenting on the results, 21st Century Fox executive chairmen Rupert and Lachlan Murdoch said, “The company’s double-digit gains in affiliate revenues demonstrate our strength in the dynamic global market for distinctive video brands and content, across both established distributors and new entrants. We delivered top-line growth at all of our businesses, backed by stand-out storytelling, sports and news, as well as a product focus that will drive greater consumption and compelling opportunities for financial returns on our content investment. Our solid first quarter performance puts us on track to achieve our overall financial and operational objectives for this fiscal year.”

    Watch this space for more …

     

  • Lachlan Murdoch opens up about Fox & Star TV’s billion-dollar EBITDA target

    Lachlan Murdoch opens up about Fox & Star TV’s billion-dollar EBITDA target

    MUMBAI: The billion-dollar EBITDA target for Star India is not just talk. 21st Century Fox executive chairman Lachlan Murdoch stated this firmly at the Goldman Sachs  Communacopia 2017 conference mid-last week.

    Labeling the billion-dollar target as Fox’s second highest priority at present, while speaking with Goldman Sachs analyst Drew Borst, Murdoch further waxed eloquent calling Star TV the group’s “greatest growth asset.”

    “We are on track to hit the billion-dollar EBITDA mark by 2020, which we have flagged for a few years  now,” he said, explaining that Star’s successful  IPL bid of $2.55 billion would not have happened if there was any doubt.

    “We strongly believe in…and we would have not bid for it at that price without being absolutely confident that we can hit out 2020 target. There are a lot of assumptions within that in terms of how we will monetise the IPL and also the growth that we have already seen in the Indian advertising market,”  he emphasised.

    The acquisition of the 61 per cent of satellite TV powerhouse Sky in the UK for $15 billion has been accorded the highest priority status for the group, Lachlan  revealed at the investor confab.

    He highlighted that the group believes the transaction is on course to get completed by mid-2018. That’s taking into consideration Britain’s culture and media secretary Karen Bradley’s decision to refer the acquisition to the Competition & Markets Authority (CMA) on both, plurality and broadcast standards.

    “We are disappointed that it has taken us six months to come to this point of view to refer to the CMA,” he said. “Especially as the regulator Ofcom has agreed that we can get through on the plurality arguments with certain concessions that we have made. Also there’s no grounds…and the secretary in her own words said that the Ofcom, her regulator, was unequivocal in saying there were no grounds on broadcast standards. Having said that, as we are likely to be referred, we would like to be referred as early as possible.”

    In fact, almost as if taking heed of what Lachlan was saying Bradley did refer the Sky bid to the competition watchdog – a process that is likely to take 24 weeks – just as the week was coming to a close. The Murdochs have said that they will work closely with the CMA  to expedite its go-ahead.

    Lachlan further stated that Fox will continue its focus on its five core television brands – National Geographic, FX, Fox Sports, Fox News and Star television in Asia. “Our entire content and  distribution strategy is built around these brands , strengthening them and the shows that are associated with them in a way to make consumers engage deeply with them across multiple platforms,” he explained.

    The older of Rupert Murdoch’s two sons was categorical in stating that the industry is being forced to go directly to the consumer.  “I don’t think  there will be any major media company on this planet which will not go direct to the consumer with a product launched in the short to medium term. ”

    He, however, cautioned that care should be taken to not damage the current profitable ecosystem in the process of building a direct connect with viewers. Hence, the group has been investing hundreds of million of dollars into its core  five  brands in content and programming.

    “Every one of them is on every new digital multichannel video programming distribution (MVPD) platform that exists out there,” he said. “We have to have must-watch-entertainment and sports associated with valuable brands,” he added.

    He stated that, even in the US, the industry is only at the very beginning of the over-the-top (OTT) distribution to the world.

    “The models that are evolving…there would not be a single successful model,” he elaborated. “Our channels are fully distributed over the entire cable and satellite TV universe. We have our own authenticated apps where we put our brands in our own ecosystem on an app  – which Comcast and AT&T Direct TV customers can get. Then, you have the new DMVPD and SVoD services. Plus, you have a direct to consumer for a bouquet of channels. There will be tremendous competition amongst all these, which is good for the consumer, and he will win out. All you have to do is produce great content, and you will do well out of it.”

    Murdoch clarified that Fox’s fundamental belief is that the consumer should be able to access its shows anywhere and everywhere; that exclusive content deals are something it rarely signs, if at all.

    “We believe that the exclusivity of content to a platform is detrimental to the consumer experience as well as to the content-owner.  We have been moving over to a model that is non-exclusive,” said Lachlan. “I would like to have our content on as many platforms as possible. We have noticed that in every single case of digital MVPDs we have earned in multiples of what we earn per subscription in the traditional distribution world. Also, the DMVPD allows us to significantly upsell our advertising because of the consumption data we get.”

    He added that Fox varies its model depending on the market. “In some markets there are low broadband speeds, so we take the route that suits that market and we are happy that we have several models in different markets.”

    ALSO READ :

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    21st Century Fox outlook on Star bullish despite $30 million demonetisation hit

    21st Century Fox says it expects Sky buy to be completed by June 2018

     

  • Star India’s ent. prog costs & De-Mon impact 21st CF even as revenue beats expectations

    MUMBAI: Even in the absence of Fox News’ star Bill O’Reilly, 21st Century Fox earnings for the year and quarter ended 30 June, 2017, have beaten expectations, narrowly missing revenues, however.

    International affiliate revenue increased seven per cent driven by strong local currency growth at both FNG International channels and STAR, partially offset by a four per cent adverse impact from the strengthened U.S. dollar. International advertising revenue decreased three per cent due to the effect of the Indian government demonetisation initiatives on the general advertising market, a lower volume of cricket matches broadcast in the current year at STAR and the negative impact of foreign exchange, partially offset by local currency growth at FNG International. Annual OIBDA at the international cable channels increased four per cent reflecting higher affiliate revenues at both FNG International and STAR and lower sports programming costs at STAR due to lower volume of cricket matches broadcast in the current year.

    The increase in expenses was primarily due to higher domestic sports programming costs driven by higher professional team rights costs at the regional sports networks (“RSNs”) and increased MLB and National Association for Stock Car Auto Racing (“NASCAR”) rights costs at FS1, higher programming and marketing costs at FX Networks and National Geographic and higher entertainment programming costs at Fox Networks Group International (“FNG International”) and STAR India (“STAR”).

    The Company continued the expansion of its video offerings by introducing non-linear packages in Europe, Asia and Latin America under the labels FOX+ and FOX Premium, all tailored for specific markets and offering consumers more choice, and re-launching its domestic suite of authenticated entertainment apps through a unified FOX NOW app, and through further penetration and engagement of its Hotstar platform in India, where watch time has increased over the prior year by 300 per cent.

    The Company reported annual income from continuing operations attributable to 21st Century Fox stockholders of $3.00 billion ($1.61 per share), compared with $2.76 billion ($1.42 per share) in the prior year. Excluding the net income effects of Impairment and restructuring charges, Other, net and adjustments to Equity losses of affiliates1, adjusted annual earnings per share from continuing operations attributable to 21st Century Fox stockholders2 was $1.93, a 12 per cent increase compared to the adjusted year-ago result of $1.73.

    The Company reported annual revenues of $28.50 billion, an increase of $1.17 billion, or four per cent, from the $27.33 billion of revenues reported in the prior year. This revenue growth reflects higher affiliate and advertising revenues at both the Cable Network Programming and Television segments partially offset by lower theatrical and home entertainment revenues at the Filmed Entertainment segment.

    Full Year Highlights

    The Company continued to grow its cable channel and television businesses through eight per cent growth in affiliate revenues and 5 per cent advertising gains while positioning these businesses for the future through the inclusion in the core bundles of new digital MVPD entrants.

    The very successful broadcasts of Super Bowl LI and the Major League Baseball (“MLB”) World Series, which delivered the most watched baseball game in a quarter century, grew Fox Sports broadcast viewership by approximately 25 per cent over the prior year driving a 20 per cent increase in television segment contributions.

    Fox News Channel was the most watched basic cable network over the last twelve months during which it achieved its highest-rated quarter ever in 24-hour viewership.

    The Company strengthened its core domestic cable brands with the successful first seasons of Taboo, Legion, and Feud on FX and the global event series Mars and Genius on National Geographic.

    The Company continued the expansion of its video offerings by introducing non-linear packages in Europe, Asia and Latin America under the labels FOX+ and FOX Premium, all tailored for specific markets and offering consumers more choice, and re-launching its domestic suite of authenticated entertainment apps through a unified FOX NOW app, and through further penetration and engagement of its Hotstar platform in India, where watch time has increased over the prior year by 300 per cent.

    The box office successes of Logan, an extension of the X-Men franchise, and Hidden Figures underscore the range and quality of what the Company’s studio brings to its audiences.

    Twentieth Century Fox Television production studio produced the number one show on five different networks, including Empire on FOX, American Horror Story: Roanoke on FX, Modern Family on ABC, This Is Us on NBC, and American Dad on TBS.

    Fox Television Stations sold broadcast spectrum in the Federal Communications Commission’s completed reverse auction for which the Company received approximately $350 million in proceeds in July 2017.

    The Company reached an agreement with Sky plc (“Sky”) on the terms of an offer to acquire the Sky shares which the Company does not already own, which the Company believes will result in enhanced capabilities of the combined company, underpinned by a more geographically diverse and stable revenue base, and an improved balance between subscription, affiliate fee, advertising and content revenues. The acquisition of Sky remains subject to certain customary closing conditions, including approval by the UK Secretary of State for Digital, Culture, Media and Sport and the requisite approval of Sky shareholders unaffiliated with the Company.

    Commenting on the results, executive chairmen Rupert and Lachlan Murdoch said: “We delivered strong financial and operational momentum in fiscal 2017 driven by an acceleration in affiliate revenue growth which fueled fourth quarter cable segment OIBDA growth of 19 per cent. The investment we have made in our video brands, and in programming that truly differentiates, is proving to be the right strategy. It is driving the value of our brand portfolio across both established and emerging distribution platforms and reflects our deep commitment to creative excellence across all of our entertainment production businesses. In addition, the outstanding performance of our live news and sports programming drove advertising growth for the year and continues to set our business apart. What we achieved in 2017 sets us up well for this year and beyond.”

    Full Year Company Results

    Full year income from continuing operations before income tax expense of $4.69 billion increased $535 million from the $4.15 billion reported in the prior year. Full year total segment operating income before depreciation and amortization (“OIBDA”)3 of $7.17 billion, was $576 million, or 9 per cent, higher than the amount reported in the prior year. The OIBDA growth was driven by higher contributions from the Company’s Cable Network Programming and Television segments partially offset by lower contributions from the Filmed Entertainment segment. The adverse impact of foreign exchange rates impacted annual OIBDA growth by $105 million, or 2 per cent in total.

    Fourth Quarter Company Results

    The Company reported quarterly income from continuing operations attributable to 21st Century Fox stockholders of $501 million ($0.27 per share), as compared to $567 million ($0.30 per share) reported in the prior year quarter. Excluding the net income effects of Impairment and restructuring charges, Other, net and adjustments to Equity earnings (losses) of affiliates4 adjusted quarterly earnings per share from continuing operations attributable to 21st Century Fox stockholders was $0.36 as compared to $0.45 reported in the same quarter of the prior year. The prior year quarter adjusted earnings per share included a tax benefit of $0.07 per share from the receipt of a favorable tax ruling.

    The Company reported total quarterly revenues of $6.75 billion, a $102 million, or 2 per cent, increase from the $6.65 billion of revenues reported in the prior year quarter. This revenue growth reflects higher affiliate and advertising revenue at the Cable Network Programming segment partially offset by lower content revenues at the Filmed Entertainment segment and lower advertising revenues at the Television segment.

    Quarterly income from continuing operations before income tax (expense) benefit of $815 million increased $269 million from the $546 million reported in the prior year quarter. Quarterly total segment OIBDA of $1.45 billion was consistent with the amount reported in the prior year quarter. Higher contributions from the Company’s Cable Network Programming segment were offset by lower contributions from the Filmed Entertainment and Television segments.

    CABLE NETWORK PROGRAMMING

    Full Year Segment Results

    Cable Network Programming annual segment OIBDA increased nine per cent to $5.60 billion, driven by a 7 per cent revenue increase led by continued growth in both affiliate and advertising revenues partially offset by a 7 per cent increase in expenses.

    Domestic affiliate revenue increased 8 per cent reflecting continued contractual rate increases, led by Fox News, FS1 and FX Networks. Domestic advertising revenue grew 6 per cent over the prior year led by higher ratings and pricing at Fox News and higher postseason baseball ratings at FS1. Domestic OIBDA contributions increased 10 per cent over the prior year led by higher contributions from Fox News, FS1 and FX Networks.

    Fourth Quarter Segment Results

    Cable Network Programming quarterly segment OIBDA increased 19 per cent to $1.44 billion, driven by 10 per cent higher revenue from strong affiliate, content and advertising growth, partially offset by a 7 per cent increase in expenses. The increase in expenses was primarily due to the broadcast of the International Cricket Council (“ICC”) Champions Trophy in the current quarter and higher programming and marketing costs at National Geographic.

    Domestic affiliate revenue increased 10 per cent reflecting higher pricing across all of our domestic cable brands, led by Fox News, RSNs, FX Networks and FS1. Domestic advertising revenue increased 6 per cent over the prior year period as the impact of higher ratings at Fox News and increases at National Geographic were partially offset by the absence of the prior year quarter broadcast of the Copa America soccer tournament at FS1 as well as a lower number of National Basketball Association and National Hockey League playoff games broadcast on the RSNs compared to the prior year quarter. Domestic OIBDA contributions increased 22 per cent over the prior year quarter led by higher contributions from Fox News, the RSNs and FS1.

    International affiliate revenue increased nine per cent driven by higher rates and subscribers. International advertising revenue increased 9 per cent from high double digit advertising increases at STAR, led by the current quarter broadcast of the ICC Champions Trophy. Quarterly OIBDA at the international cable channels increased 6 per cent from the prior year quarter primarily reflecting higher contributions from FNG International partially offset by lower contributions from STAR.

    TELEVISION

    Full Year Segment Results

    The Television segment generated annual OIBDA of $894 million, a $150 million, or 20 per cent, increase over the $744 million reported in the prior year. Annual segment revenues were 11 per cent higher than the prior year due primarily to strong sports advertising revenue growth led by the broadcast of Super Bowl LI, the MLB World Series, which benefited from strong ratings and two additional games versus last year, and the inclusion of one additional National Football League divisional playoff game. Higher local political advertising spending at the television stations and continued growth of retransmission consent revenues also contributed to the segment revenue growth. These revenue increases were partially offset by lower network entertainment advertising revenues reflecting lower general entertainment ratings.

    Fourth Quarter Segment Results

    Television reported quarterly segment OIBDA of $137 million, a $7 million decrease compared to the prior year quarter. Quarterly segment revenues declined as lower national and local advertising revenues from lower general entertainment ratings were partially offset by higher retransmission consent revenues. Total segment expenses were 3 per cent lower than the prior year quarter due to lower entertainment programming costs.

    FILMED ENTERTAINMENT

    Full Year Segment Results

    Full year Filmed Entertainment segment OIBDA of $1.05 billion decreased $34 million from the prior year primarily due to a 4 per cent adverse impact from foreign exchange rate fluctuations. Higher revenue from the television studio was more than offset by lower revenue at the film studio. The television studio’s revenue increased due to higher subscription video-on-demand licensing led by Homeland and The People v. O.J. Simpson: American Crime Story. The film studio’s revenue decline was attributable to difficult theatrical and home entertainment revenue comparisons to the prior year slate which included Deadpool and The Martian.

    Fourth Quarter Segment Results

    Filmed Entertainment generated a quarterly segment OIBDA loss of $22 million, a $186 million decrease from the $164 million contribution reported in the same period a year ago. The OIBDA decrease in the current quarter was principally driven by lower revenues at both the film and television studios. Quarterly segment revenues decreased $235 million to $1.80 billion, primarily reflecting lower home entertainment revenues due to the strong performance of Deadpool in the prior year quarter and lower pay and free television revenues due to the timing of feature film availabilities and fewer deliveries of returning television series.

    Full Year Results

    Annual equity losses of affiliates were $41 million as compared to $34 million of equity losses of affiliates in the prior year. The $7 million increase in losses primarily reflects higher equity losses from Hulu and lower equity earnings from Sky partially offset by lower equity losses from Endemol Shine Group.

    Fourth Quarter Results

    Quarterly equity earnings of affiliates were $16 million as compared to $72 million of equity losses of affiliates reported in the same period a year ago. The $88 million improvement in equity results primarily reflects lower equity losses reported at Endemol Shine Group and higher equity earnings reported at Sky.

    OTHER ITEMS

    Dividends

    The Company has declared a dividend of $0.18 per Class A and Class B share. This dividend is payable on October 18, 2017 with a record date for determining dividend entitlements of September 13, 2017.

    Pending Acquisition of the Remaining Shares of Sky

    The Company’s pending acquisition of the public shares of Sky has been cleared on public interest and plurality grounds in all of the markets in which Sky operates except the UK, including Austria, Germany, Italy and the Republic of Ireland. The acquisition has also received unconditional clearance by all competent competition authorities. The transaction is subject to certain other customary closing conditions and the requisite approval of Sky shareholders unaffiliated with the Company. In the event that the UK Secretary of State for Digital, Culture, Media and Sport makes a final decision to refer to the Competition and Markets Authority for a phase two review, the transaction is expected to close by June 30, 2018.

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  • De-mon contributes to lower international ad revenue at 21st Century Fox

    BENGALURU: Rupert Murdoch’s 21st Century Fox (TFC-Fox) reported five per cent decline in net income attributable to TFC-Fox stockholders (net income) for the quarter ending 31 March 2017 (Q3-17, current quarter) as compared to the corresponding periods of the previous fiscal.  The company’s Q3-17 net income was $799 million as compared to $841 million in Q3-16. As reported by us earlier, (21st Century Fox outlook on Star bullish despite $30 million DeMon Hit), TFC-Fox CFO John Nallen, in conversation with analysts had admitted that Star too ‘got affected’ from last quarter to first quarter of 2017 to the extent of $30 million.

    Demonetisation in India partially contributed to the drop in revenue in Q3-17 going by some statements in TFC-Fox’s earnings release for Q3-17. The company’s press release says: “International advertising revenue decreased 18 percent from lower advertising revenues at Star India due to the absence of the prior year broadcast of the ICC Cricket World Twenty20 matches and the effect of the Indian government demonetization initiatives on the general advertising market. Quarterly OIBDA at the international cable channels increased 44 percent from the prior year quarter primarily reflecting lower sports programming costs at STAR India and higher contributions from Fox Networks Group International (FNGI).”

    Advertising revenue in the current quarter increased 15.5 percent to $2,203 million from $1,907 million. Affiliate Fees in Q3-17 increased 7.5 percent to $3,160 million from $2,939 million in the corresponding year ago quarter. Content revenue in Q3-17 declined 9.2 percent to $2,078 million from $2,288 million in Q3-16. Other revenue increased 30.9 percent to $123 million from $94 million.

    Overall TFC-Fox revenue in the current quarter increased 4.6 percent to $7,564 million as compared to $7,228 million in Q3-16. Total operating income before depreciation and amortisation (OIBDA) for the quarter increased 3 percent to $1,938 million from $1,881 million in the year ago quarter.

    Commenting on the results, TFC-Fox executive chairmen Rupert and Lachlan Murdoch said, “We delivered a quarter marked by operational momentum and strong domestic affiliate fee growth. We continue to demonstrate our ability to capture opportunities to grow distribution of our domestic portfolio of video brands, whether through established MVPD partners or new digital entrants such as Hulu’s recently launched live television service. We made progress in the quarter against our key strategic priorities, exemplified by our creative successes across screens, from theatrical releases Logan and Hidden Figures to new FX debuts of Legion, Feud and Taboo. Our proposed combination with Sky, which was recently approved unconditionally by the European Commission, will advance another of our strategic priorities, driving innovation for customers. We remain confident the proposed transaction will be approved by the end of the calendar year following a thorough review process.”

    Three segments contribute to TFC-Fox numbers: Cable Network Programming (Star India is a part of Cable Network Programming); Television; and Filmed Entertainment.

    Cable Network Programming

    Cable Network Programming quarterly segment OIBDA increased 5 percent to $1.45 billion and revenue increased 2 percent to $4.02 billion.

    Expenses were consistent with the prior year quarter as higher entertainment programming and marketing costs at FX Networks and National Geographic Channels, higher National Association for Stock Car Auto Racing (NASCAR) rights costs at FOX Sports 1 (FS1) and higher National Basketball Association (NBA) rights costs at the regional sports networks (RSNs) wereoffset by lower sports rights costs at STAR India due to the absence of the prior year broadcast of the International Cricket Council (ICC) Cricket World Twenty20 matches.

    Domestic affiliate revenue increased 8 percent reflecting continued contractual rate increases led by Fox News, FS1, the RSNs and FX Networks. Domestic advertising revenue was flat over the prior year period as the impact of higher ratings at Fox News and FS1 was offset by lower revenues at the National Geographic Partners businesses. Domestic OIBDA contributions were equal to the prior year quarter as higher contributions from Fox News were offset by lower contributions from FX Networks and National Geographic Channels.

    International affiliate revenue increased 5 percent driven by local currency growth of 7 percent partially offset by negative currency impacts from the strengthened U.S. dollar. International advertising revenue decreased 18 percent from lower advertising revenues at Star India due to the absence of the prior year broadcast of the ICC Cricket World Twenty20 matches and the effect of the Indian government demonetization initiatives on the general advertising market. Quarterly OIBDA at the international cable channels increased 44 percent from the prior year quarter primarily reflecting lower sports programming costs at STAR India and higher contributions from Fox Networks Group International.

    TELEVISION

    Television reported quarterly segment OIBDA of $190 million, an increase of 52 percent as compared to the prior year quarter driven by 30 percent revenue growth reflecting increased advertising revenue and continued growth of retransmission consent revenues.

    Quarterly advertising revenues grew 39 percent from the corresponding period of the prior year driven by the broadcast of Super Bowl LI and the inclusion of one additional National Football League divisional playoff game, partially offset by the impact from lower general entertainment ratings, led by the absence of American Idol, which concluded its final season in the prior year. The segment results also included higher sports programming costs associated with the broadcast of Super Bowl LI and the additional National Football League divisional playoff game.

    FILMED ENTERTAINMENT

    Filmed Entertainment generated quarterly segment OIBDA of $373 million, a $97 million decrease from the $470 million reported in the same period a year-ago. The OIBDA decrease in the current quarter was driven primarily by lower film studio contributions reflecting difficult comparisons to last year’s strong worldwide theatrical performance of Deadpool and the home entertainment performance of The Martian, partially offset by higher television production contributions from higher subscription video-on demand revenues led by the licensing of The People v. O.J. Simpson: American Crime Story and higher network revenue.

    Quarterly segment revenues decreased $65 million to $2.26 billion, primarily reflecting lower worldwide theatrical and home entertainment revenues partially offset by higher television production revenues. Quarterly results also included the successful theatrical performances of both Logan and Hidden Figures, which have grossed approximately $600 million and $230 million in worldwide box office, respectively.

  • Hotstar targets billion minutes watch time daily

    Hotstar targets billion minutes watch time daily

    MUMBAI: The new mantra at the Twenty First Century Fox-owned Star India subsidiary Novi Digital’s Hotstar is the figure of a billion. Yes, a billion. Not a billion subscribers, but a billion minutes. Speaking at a conference in China yesterday, its senior vice-president and head of product Varun Narang stated that the OTT service’s target is to get to a billion minutes of watch time daily.

    “Once you get to a billion minutes a day, you’re talking about a real, real business,” stated Narang at the conference.

    Narang was roped in to Hotstar from Whipclip last year and has had more than half a decade’s product experience with top-notch services such as Hulu and Amazon in the US. He was recruited to lead the team which is helping build mobile solutions for the app and help innovate content discovery, quality of video playbacks as well as build native advertising platforms for the app.

    Speaking at the Bank of America Merrill Lynch Media and entertainment conference earlier this month Twenty First Century Fox executive chairman Lachlan Murdoch had stated that Hotstar had gone from streaming 750 million minutes to 2.5 billion minutes between July and August 2016. That means it has some distance to travel before it gets to that billion minutes a day figure.

    Responding to a question from ace analyst Jessica Jean Reif Cohen on the media powerhouse’s plans for India, Lachlan had elaborated that Hotstar is expected “to grow significantly with the launch of Reliance Jio’s mobile 4G service, which Hotstar is the exclusive (sic) program provider for. So, on the Reliance Jio phones — the biggest launch of consumer product in many many years – Hotstar is the exclusive television provider on the platform. And so we think where every single single consumer will have access to Hotstar premium which is a $3 service. And, they’ll have it provided by Reliance for free. So, it’s a very exciting time in India for us. Just to have this in perspective, those streaming numbers for Hotstar is about, if you compare with Netflix in India, Netflix is about six per cent the size of Hotstar”.

    Among the initiatives, Hotstar is looking to scale up the product quickly is rolling it out globally in the near future, targeting the south Asian diaspora, Narang revealed at the conference. This was something that even Star India chairman Uday Shankar had stated at the Ficci Frames conference in Mumbai earlier this year.

    Narang admitted that what was helping Hotstar is the fact that “content rights are a lot easier for us in India than they are in the US.”

    Other things that could aid it get there is its catalogue of around 35,000 hours of entertainment content. At its investor call conference during the announcement of its annual results Twenty First Century Fox CFO John Nallen had pointed out that “in the beginning, we saw pretty severe sort of volatility and spike, largely around sports viewership on the Hotstar platform to when there was a big cricket tournament or something like that. But, gradually over the last year, what’s really built and gotten much more momentum is scripted programming, it’s Indian-scripted programming in multiple languages, and that’s really driving, that’s been the most gratifying and to see more consistent viewership of that and that’s really a big, big part of the volume now, and it’s the fastest way growing part of the volume on a consistent basis, local Indian-scripted programming at very high volumes.”

    Currently, Hotstar has an estimated 72 million downloads with around 50 million active users.

  • Hotstar targets billion minutes watch time daily

    Hotstar targets billion minutes watch time daily

    MUMBAI: The new mantra at the Twenty First Century Fox-owned Star India subsidiary Novi Digital’s Hotstar is the figure of a billion. Yes, a billion. Not a billion subscribers, but a billion minutes. Speaking at a conference in China yesterday, its senior vice-president and head of product Varun Narang stated that the OTT service’s target is to get to a billion minutes of watch time daily.

    “Once you get to a billion minutes a day, you’re talking about a real, real business,” stated Narang at the conference.

    Narang was roped in to Hotstar from Whipclip last year and has had more than half a decade’s product experience with top-notch services such as Hulu and Amazon in the US. He was recruited to lead the team which is helping build mobile solutions for the app and help innovate content discovery, quality of video playbacks as well as build native advertising platforms for the app.

    Speaking at the Bank of America Merrill Lynch Media and entertainment conference earlier this month Twenty First Century Fox executive chairman Lachlan Murdoch had stated that Hotstar had gone from streaming 750 million minutes to 2.5 billion minutes between July and August 2016. That means it has some distance to travel before it gets to that billion minutes a day figure.

    Responding to a question from ace analyst Jessica Jean Reif Cohen on the media powerhouse’s plans for India, Lachlan had elaborated that Hotstar is expected “to grow significantly with the launch of Reliance Jio’s mobile 4G service, which Hotstar is the exclusive (sic) program provider for. So, on the Reliance Jio phones — the biggest launch of consumer product in many many years – Hotstar is the exclusive television provider on the platform. And so we think where every single single consumer will have access to Hotstar premium which is a $3 service. And, they’ll have it provided by Reliance for free. So, it’s a very exciting time in India for us. Just to have this in perspective, those streaming numbers for Hotstar is about, if you compare with Netflix in India, Netflix is about six per cent the size of Hotstar”.

    Among the initiatives, Hotstar is looking to scale up the product quickly is rolling it out globally in the near future, targeting the south Asian diaspora, Narang revealed at the conference. This was something that even Star India chairman Uday Shankar had stated at the Ficci Frames conference in Mumbai earlier this year.

    Narang admitted that what was helping Hotstar is the fact that “content rights are a lot easier for us in India than they are in the US.”

    Other things that could aid it get there is its catalogue of around 35,000 hours of entertainment content. At its investor call conference during the announcement of its annual results Twenty First Century Fox CFO John Nallen had pointed out that “in the beginning, we saw pretty severe sort of volatility and spike, largely around sports viewership on the Hotstar platform to when there was a big cricket tournament or something like that. But, gradually over the last year, what’s really built and gotten much more momentum is scripted programming, it’s Indian-scripted programming in multiple languages, and that’s really driving, that’s been the most gratifying and to see more consistent viewership of that and that’s really a big, big part of the volume now, and it’s the fastest way growing part of the volume on a consistent basis, local Indian-scripted programming at very high volumes.”

    Currently, Hotstar has an estimated 72 million downloads with around 50 million active users.

  • Roger Ailes steps down as Fox News chairman & CEO

    Roger Ailes steps down as Fox News chairman & CEO

    MUMBAI: The Murdoch family-promoted 21st Century Fox has announced Roger Ailes has stepped down as chairman and CEO of Fox News and resigned from Fox Business Network and Fox Television Stations, effective immediately.

    Rupert Murdoch, Executive Chairman of 21st Century Fox, will assume the role of Chairman and acting CEO of Fox News Channel and Fox Business Network.

    It’s a stunning fall for Ailes, a long time political operative and Murdoch ally, who is credited with building Fox News and leading the cable channel to ratings dominance.

    In a statement released to the media last week, Rupert Murdoch said: “I am personally committed to ensuring that Fox News remains a distinctive, powerful voice. Our nation (the US) needs a robust Fox News to resonate from every corner of the country.”

    Murdoch will be assisted in running the Fox businesses by existing management team under Bill Shine, Jay Wallace and Mark Kranz.
    Ailes, 76, was in the eye of the storm having been accused of sexual harassment in a lawsuit filed earlier this month by former Fox News host Gretchen Carlson.

    Though Ailes has vigorously denied Carlson’s claims, Fox News launched an internal investigation. The developments, critics and media observers claim, was a result of public and political pressure and perception.

    “Roger Ailes has made a remarkable contribution to our company and our country. Roger shared my vision of a great and independent television organization and executed it brilliantly over 20 great years,” the company statement quoted Murdoch as saying.

    In a letter to Murdoch, released by a publicist, Ailes said, “I am proud of our accomplishments and look forward to continuing to work with you as an adviser in building 21st Century Fox.”

    “We join our father in recognizing Roger’s remarkable contributions to our company,” a joint statement from Murdoch’s two sons, Lachlan and James, said. The sons are in charge in charge of Fox News.
    Ailes began his television career in the early 1960s as a producer at The Mike Douglas Show in Cleveland, and went onto serve as media consultant for several Republican presidents, including Richard Nixon and Ronald Reagan.

    “I take particular pride in the role that I have played advancing the careers of the many women I have promoted to executive and on-air positions,” Ailes wrote in the letter to Murdoch, adding that many of these talented journalists have deservedly become household names known for their intelligence and strength whether reporting the news, fair and balanced, and offering exciting opinions on opinion programmes.

    In his defence, Ailes further stated in the letter that Fox News has become No. 1 in all of cable because he “identified and promoted the most talented men and women in television, and they performed at the highest levels.”

    In 1996, Murdoch, seeing a market for a conservative cable news outlet, hired Ailes to create Fox News. And Ailes moulded the network to run like a political campaign operation with primetime shows that were unabashedly conservative and hosts who openly espoused Republican talking points.

    The network eventually unseated CNN as the highest rated cable news network and became one of the most popular cable networks of all genres, reaching more than 90 million households.

    “It is always difficult to create a channel or a publication from the ground up and against seemingly entrenched monopolies,” Murdoch Sr. said, adding, “To lead a flourishing news channel, and to build Fox Business, Roger has defied the odds.”