Lachlan Murdoch, named this week to succeed his father Rupert Murdoch as chairman of Fox Corp., received total compensation of $21.8 million in fiscal 2023, according to a filing with the Securities and Exchange Commission.

Lachlan Murdoch, executive chairman and CEO at Fox, received roughly the same amount of compensation for 2022. His 2023 pay included a salary of $5 million, incentive plan compensation of $4.4 million, stock awards of $5.8 million and option awards of $1.8 million.

Rupert Murdoch took 2023 compensation of $21.9 million, up from $18.4 million in 2022.

Viet Dihn, who is leaving his post as Fox’s Chief legal and policy officer, received $10.7 million in compensation.

Rupert Murdoch, chairman of Fox Corp. and News Corp., will step down from each company’s board of directors when annual shareholder meetings happen in mid-November. Murdoch will become chairman emeritus of each board. 

Following the annual general meetings, Lachlan Murdoch will become chair of News Corp. and will continue as executive chair and CEO of Fox Corp. 

Murdoch is 92. 

“On behalf of the Fox and News Corp, boards of directors, leadership teams, and all the shareholders who have benefited from his hard work, I congratulate my father on his remarkable 70-year career,” Lachlan Murdoch said. “We thank him for his vision, his pioneering spirit, his steadfast determination, and the enduring legacy he leaves to the companies he founded and countless people he has impacted. We are grateful that he will serve as chairman emeritus and know he will continue to provide valued counsel to both companies.” 

Murdoch inherited his father’s stake in the Australian newspaper The News in 1952 and became editor, publisher and board member of News Limited a year later. His company founded the Southern Television Corp. and its Channel 9 went on the air in Australia in 1959. 

News Ltd. bought the Daily Mirror and Sunday Mirror in 1960, and launched The Australian in 1964. The company gained control of News of the World and The Sun, both U.K. newspapers, in 1969, and acquired the New York Post, New York Magazine and The Village Voice. 

News Corp. was established in 1980. It purchased The Times and The Sunday Times (U.K.) in 1981 and became majority owner of Satellite Television in 1983. 

Murdoch took ownership of 20th Century Fox in 1985 and both Fox Broadcasting and Fox Television Stations were hatched in 1986. Sky Television was launched in the U.K. in 1988, Sky News came in 1989 and publisher HarperCollins was created in 1990. 

Fox News Channel was launched in 1996. Murdoch acquired Dow Jones and The Wall Street Journal in 2007. 

In 2019, Fox Corp. was launched as a standalone company following the sale of 21st Century Fox’s studio and cable-network assets to The Walt Disney Co. It includes Fox News Media, Fox Sports, Fox Entertainment, Fox Television Stations and Tubi Media Group. 

Fresh off its monster $787.5 million settlement with Dominion Voting Systems last month, Fox CEO Lachlan Murdoch worked to convince equity analysts Tuesday that another pending libel suit against his company by yet another voting machine maker, Smartmatic, won't go the same way. 

Murdoch told analysts the two cases are "fundamentally different," in that Delaware Superior Court Judge Eric Davis would not allow Fox News to stand on its First Amendment rights as a "news organization" in the Dominion matter. 

Also read: Dominion Settlement Leaves Fox With $54 Million Q3 Loss

For Smartmatic's pending $2.7 billion suit, which is being adjudicated by the same court, Murdoch said Fox's "full compliment of First Amendment defenses remain." 

Speaking during Fox's first-quarter earnings call Tuesday, Murdoch said a trial in the Smartmatic case probably wouldn't start until 2025.

“I am obviously limited about what I can say about any ongoing litigation, but I can make the following comment, in regard to Dominion,” he said. “We always acted as a news organization reporting on the newsworthy events of the day, which certainly included allegations being made by the president of the United States and his lawyers.”

Fox attributed a $54 million loss in the first quarter directly to the hefty Dominion settlement. 

“We made the business decision to resolve this dispute and avoid the acrimony of a divisive trial and a multi-year appeal process, a decision clearly in the best interests of the company and its shareholders,” Murdoch added. 

Amid continuing releases of documents and text messages about how Fox News reported false claims about the 2020 presidential election, Fox CEO Lachlan Murdoch praised Fox News CEO Suzanne Scott.

“Suzanne Scott has done a tremendous job,” Murdoch said, talking about Fox News’s audience and financial performance at a Morgan Stanley investor conference Thursday.

There had been speculation that Scott could take the fall for the way Fox News covered the 2020 election and handled false claims about voting irregularities, leading to a $1.6 billion lawsuit brought by Dominion Voting Systems in Delaware and another lawsuit filed in New York by election-tech company Smartmatic.

Documents in the Dominion lawsuit appear to indicate that Fox reporters, commentators and executives, including chairman Rupert Murdoch, did not believe in those claims, but the network reported them anyway.

Asked about the Dominion suit, Lachlan Murdoch said it was expected to go to trial in April.  “We’ll all be waiting for that,” he said. 

“A news organization has an obligation and it is obligated to report news fulsomely and wholesomely and without fear or favor, and that is what Fox News has always done,” he said.

He added that the noise surrounding the case was “not about the law, not about journalism, but about the politics. This is unfortunately reflective of the polarized society we live in.” ■

So Rupe and Lach might get the band back together, according to wholly not-surprising reports from Murdochland that Fox and News Corp., pulled asunder nearly a decade ago, may once again become one.  

The news is rather amusing, coming just weeks after Rupert Murdoch finalized his personal de-merging with former model/Mrs. Mick Jerry Hall after a whirlwind courtship and six-year marriage. 

With that little distraction behind him in time for the New Fall Season, Logan Roy, er, Rupert Murdoch is back in marrying mode, though of a corporate rather than personal sort. At this rate, the nastiest nonagenarian on the block might even make nice with his adult children, who stopped working for him.

And it certainly seems like the entire media universe is in a marrying mood.

A re-merger is working splendidly for the still-undersized Paramount Global since Shari Redstone finally quelled multiple boardroom rebellions and reasserted control. Amazon is figuring out what to do with MGM, its new toy, while Brian Roberts sure would like to make Comcast much bigger. Lions Gate keeps trying to do … something.

And of course, we have the just-hitched Warner Bros. Discovery, which laid off still more workers last week in its never-ending search for “corporate synergies” (perhaps not every marriage is meant for happiness, right, Rupert?).

Given the context, a Fox/News reunification is both amusing and unsurprising, especially when one recalls the reasoning behind the original disassembly. To put it mildly, that reasoning has not aged well. 

You may recall, back in the late aughts and early teens, investors wanted Rupe to ditch all those slow-growing, less profitable parts of his then-very-big media empire. They weren’t interested in any media assets with a Gutenberg-era whiff, including newspapers such as the Wall Street Journal and loss-making bully pulpit New York Post, book publisher Harper Collins and a bunch of Australian publications. 

Thus begat the new News Corp., designed to kludge along with slowly declining revenues until someone turned off the lights in the last printing press bay. 

That left Fox investors with all the faster-growing, more lucrative assets in broadcasting, cable news and sports, movies, home entertainment, and games. 

Cool ... except five years later, Murdoch sold much of Fox to Disney for an epic $71 billion.

What was left -- Fox Broadcasting, Fox News, Fox Sports, AVOD contender Tubi, the vestigial subscription streaming service Fox Nation -- has seemed more like a hobby to preoccupy a puttering old gaffer than an actual media empire. Certainly significant parts of What’s Left face grim prospects in the long term, given the flight of viewers to streaming services not owned by Fox. 

Like just about every other public company, News Corp. and Fox have seen their stock prices plummet over the past year. Fox has drooped nearly 32% over the year. News Corp., never the racehorse, is down nearly 40%. Their combined market capitalization is a modest $25.8 billion, which doesn’t suggest that combining will make much difference to the market. 

Oh, sure, Fox News continues to sweep its Sauron-like gaze across the land, extracting oodles of billions from the aggrieved bumpkins who delight in its culture wars ... when they’re not grumbling that Tucker Carlson and company don’t go as far as the real Republicans over at OAN, Infowars, etc. 

That hugely profitable “News” hustle generates a reported 80% of Fox’s overall profits, and feeds the name-brand talents who also staff most of Fox Nation’s lifestyle shows. 

True, making stuff up can also occasionally be expensive. Fox News and some of its “entertainment” personalities are facing a $1.65 billion defamation lawsuit from a voting machine company for their hijinks during and after the 2020 election. And late founder Roger Ailes left a lengthy trail of sexual misconduct settlements in his wake after shuffling out of the beast he built. 

Fox’s sports and broadcasting units, meanwhile, have invested heavily in sports TV rights, grabbing pricey chunks of the NFL and Big Ten deals among much else. Such increasingly expensive rights are fast becoming the real sports betting industry. Media companies are gambling that the programming outlets will retain just enough audience to pay back what they’re spending before most viewers cut the cord irrevocably. 

And that’s the real issue with the Murdochs’ latest financial gerrymandering idea. 

A re-merger would generate the usual corporate synergies, mostly by laying off accounting, HR, marketing, communications and similar back-office duplicate gigs. That’s been going … not so great for Warner Bros. Discovery.

And getting a bit bigger would improve ad sales and audience targeting with more scale and engagement across cable, streaming, digital and other assets. That’s a hot trend these days as media companies focus on selling demographic slices across multiple properties rather than whoever turns up for a single show at 9 PM on Thursday. 

But let’s be real. The only forward-facing assets Murdoch has left after his Disney deal are Tubi and Fox Nation. Tubi is one of the biggest ad-supported streaming services, and increasingly has integrated with other Fox assets such as The Masked Singer. But it otherwise features a lot of the same old stuff also found on most of its major competitors, hardly a recipe for engagement or brand loyalty. 

With Fox Nation, we still don’t know how many people pay for the service, but its subscriber base is probably still no more than a few million subscribers, fed by a Fox News fan base that is both usefully ardent and dismayingly old. Compare that to the competition and it’s not even AMC Networks level in scale and demographic reach.

Meanwhile, all those assets Murdoch sold to Disney are a substantive part of the Mouse House’s prodigious progress in streaming. Where, for instance, would Disney-controlled Hulu be without all the great FX shows playing there ?(BTW, please watch Reservation Dogs and The Bear.) What would the Disney bundle look like with only lame ESPN Plus to justify an even higher price for Disney Plus?

More generally, Disney’s many entertainment units, now plumped up by ex-Fox operations, are commissioning even more scripted content than traditionally prolific Netflix, Ampere Analysis says. 

That’s great for Disney as it locks down a must-have slot among the streaming services. Bob Chapek’s crew can thank not just Bob Iger’s many previous deals, but Rupert Murdoch’s desire to liquidate most of his supposedly fast-growing, next-generation empire. 

At 91, it’s unlikely Rupert Murdoch will be able reassemble anything like what he shipped off to Disney. Far more likely, reattaching News Corp. to Fox will be the corporate equivalent of moving all the deck chairs to a single cruise ship as it plows ahead into iceberg-filled waters. 

Here in the dying of the day, the old man is trying one last, lost financial machination so his company can continue to matter. In a cord-cutting era, increasingly few will notice. 

Couldn’t happen to a nicer guy.  

Fox CEO Lachlan Murdoch continues to heap accolades on Tubi, the streaming platform Fox bought for $440 million in 2020.

“The growth of Tubi continues to exceed even our best expectations for the business,” Murdoch said during Fox’s fiscal first-quarter earnings call. On previous calls, Murdoch has predicted Fox will grow to be a billion-dollar revenue business in the near future.

"In the first quarter of the fiscal year, Tubi more than doubled its revenues year over year and total view time on the platform continues to have close to 30% growth compared to last year," Murdoch said on Wednesday’s call.

In fact, this fiscal year, Tubi revenue will exceed the price Fox paid to buy the platform, he said.

Murdoch also said that Tubi’s original content strategy "is already seeing early signs of success."

Tubi has streamed four original movies this year. Two of those movies have performed so well in the quarter that they have already generated advertising revenue “well above the low production costs, meaning they are already generating a positive return,” he said.

Also: Yahoo and Tubi Expand Buyer Access to CTV Ad Inventory

Tubi’s programming is driven by data it has on its users.

"Tubi’s deep understanding of its audience is a key asset," Murdoch said. "Tubi original movies outperformed blockbuster movies available on the platform."

Also performing well on Tubi is news programming. 

“News on Tubi is drawing viewers for increasingly long periods of time. Since launching last fall, news on Tubi viewership has grown over 130%,” Murdoch said. Much of Tubi’s news content comes from its network of stations and affiliates.

Tubi will continue to take advantage of Fox’s content with premium sports channels including Fox Sports, the NFL Network, and the MLB Network.

Fox is also developing content for Tubi based on the TMZ brand, which Fox recently acquired from AT&T’s WarnerMedia.

“Fox Entertainment is focusing on bringing the TMZ brand to all parts of the Fox portfolio, including further monetizing the TMZ brand across the Fox TV stations, developing TMZ branded content for Tubi and amplifying TMZ’s digital presence,” Murdoch said.

Fox News unveiled a new Washington newsroom and studios with a ribbon-cutting Thursday night (Sept. 30) in advance of the top-rated cable news network's 25th anniversary Oct. 7.

Fox Corp. CEO Lachlan Murdoch did the ribbon-cutting honors for the newly reopened bureau, flanked by Fox News Media CEO Suzanne Scott and president and executive editor Jay Wallace. 

Actually, it is two studios, a digital tech platform for video graphics and a reconfigured newsroom according to Bret Baier, who reported on the new digs on Special Report.

The studio’s Green Room is named after the late Fox contributor Charles Krauthammer and the new radio studio after the late host of Fox News Sunday, Tony Snow.

The Murdochs who run Fox Corp. received lower total compensation for the year ended June 30, according to a proxy statement filed with the Securities and Exchange Commission Friday.

Chairman Rupert Murdoch’s total compensation was $31.1 million, down from $34 million the previous year. 

The biggest change in compensation for Murdoch was the change in value in his pension and non-qualified deferred compensation earnings, which was $13.7 million a year ago and $9.9 million for 2021. His salary and stock awards were down, while non-equity incentive plan compensation rose.

Murdoch’s son Lachlan, the company’s executive chairman and CEO, received $27.7 million, down from $29.2 million in fiscal 2020. The change in pension value and non-qualified deferred compensation earnings was the biggest difference for Lachlan Murdoch as well. His salary was down, as were his stock awards, while non-equity incentive plan competition rose.

John Nallen, Fox’s chief operating officer, saw his total compensation dip to $12.5 million from $13.1 million a year ago. 

Chief legal and policy officer Viet Dihn’s compensation rose slightly to $12.4 million from $12.1 million and chief financial officer Steven Tomsic’s pay rose to $7.5 million from $6.9 million.

Fox Corp. reported higher fiscal fourth-quarter earnings.

Net income jumped to $253 million, or 43 cents a share, from $122 million, or 20 cents share a year ago. 

Revenues rose 20% to $2.89 billion.

Advertising revenue rose 38%. Ad revenues were up 51% at Fox’s television segment, and 17% at its cable networks.

Affiliate revenue rose 10%, with the TV segment up 16% and cable networks up 6%.

Cable network EBITDA was flat at $674 million as revenues rose 10% to $1.4 billion. 

Also Read: Fox News Blows Out Competition in July Ratings Race

EBITDA fell to $148 million from $169 million at Fox’s television segment as revenues rose to $1.4 billion from $1.1 billion.

“Our exceptional Fiscal 2021 financial results highlight the strength of our distinct strategy and serve as a foundation for sustained operating momentum.” said executive chairman and CEO Lachlan Murdoch.

“Despite the challenges presented by COVID, our businesses continued to inform and entertain households across the country. And in the midst of it all, we strengthened our core brands and expanded our digital capabilities, which together provide a robust platform for future growth,” Murdoch said. “We look forward to the year ahead, anticipating the return of normalized sports and entertainment calendars and the start of the midterm election cycle. Fox’s core live event programming, coupled with its growing digital businesses, will continue to deliver audiences on an unmatched scale for our advertising and distribution partners.” 

Fox CEO Lachlan Murdoch said that, despite press reports, there is no imminent announcement of a new deal with the National Football League.

There have been numerous reports that the main points of new deals between the broadcasters and the league have been set, with most franchises staying in place at considerably higher prices. 

The main change would be Fox giving up Thursday Night FootbalI, leaving that with Amazon and the NFL network, which simulcast most of the Thursday night games last season.

“It feels like we’re still apart on a number of issues, so there’s no imminent announcement,” Murdoch said, speaking at the Morgan Stanley Telecommunications, Media and Technology conference on Thursday.

With Thursday night games and the Sunday afternoon NFC package, Fox had more NFL programming than any other network.

Also Read: A Look at NFL Social Video Trends Ahead of the Super Bowl

Murdoch said that the Thursday package was good for promoting the new Fox following the sale of most of 21st Century Fox to The Walt Disney Co. The Thursday night games provide a promotional platform for Fox and for shows like 911 and The Masked Singer.

“But it was also something we knew would give us some options going forward,” he said. “Whether we have Thursday and Sunday, whether we just kept Thursday, or the most likely scenario is just keep Sunday.”

The NFL is seeking deals that may last as long as 10 year, much longer than in the past.

Murdoch indicated that Fox is comfortable with the longer deals. “Historically [the rights fees] have gone up in each renewal and not down, and so I think a longer-term deal makes sense,” he said.

Tubi, the streaming service acquired last year by Fox for $440 million, will grow to be a billion dollar business, according to Fox CEO Lachlan Murdoch.

Speaking on Fox’s fiscal second-quarter earnings call Tuesday, Murdoch called Tubi “an exciting growth engine for the company and a key strategic platform not only for our digital expansion, but also our broader reimagining of Fox’s broadcast model for the future.”

Also Read: Fox Jumps Into Streaming By Agreeing to Buy Tubi

Tubi saw increases in key metrics that exceeded Fox’s expectations, Murdoch said. In the first half of the year, unique viewers more than tripled and total view time grow by nearly 70% and revenue more than doubled. 

Murdoch said that total view time was the key metric Fox looked at because it has a direct and proportional relationship to advertising inventor and revenue opportunities.

Fox expects Tubi revenues to double this year to $300 million. “As we look out a few years, we envision Tubi becoming a billion-dollar business and a core pillar of Fox,” Murdoch said.

Murdoch noted that while other media companies pour billions into subscription VOD streaming services, ad supported streaming is Fox’s direct-to-consumer strategy.

SVOD presents the potential to lose billions of dollars, he noted. “It is very crowded. We see it is very hard to stand apart and differentiate ourselves within SVOD and that’s why we’ve chosen to embrace AVOD.”

He said Fox has been able to grow Tubi by reinvesting its profits and not by losing billions. “The business will ultimately become a very profitable one for us."

Tubi has been neutral from a profit and loss perspective so far this year, said Fox CFO Steve Tomsic. The company will need to increase its investment in Tubi to grow it to be a billion-dollar business. “Over time as we take our foot off the gas in terms of investing for growth, you will see some pretty good conversion of revenue into bottom line margin as this business gets to scale,” he said.

In terms of programming, Fox has added shows like The Masked Singer to Tubi’s content library, which has added to view time and reach for advertisers.

Read Also: Tubi Adds Global Versions of 'MasterChef,' 'Lego Masters'

Advertisers also benefit from Tubi’s technology, which is being constantly upgraded to provide better data and results to digital advertisers, Murdoch said.

Murdoch cited a study with a major insurance brand that used Tubi’s Advanced Frequency Management to reduce ad repetition. Frequency was reduced by 360%.

“Rather than continuing to show the same ad to the same viewers, as is so often the case across other AVOD platforms, Tubi’s tool enabled this insurance company to advertise to nearly 100,000 more households within the same ad buy,” he said.

As a result of the test, the brand made a multi-billion-dollar ad commitment to Tubi. “The brand is also a Fox advertiser now as well,” Murdoch said.

Compensation for the top executives at Fox for 2020 fell, according to a proxy filing with the SEC.

Chairman Rupert Murdoch received $34 million, down 20% from $42.2 million in fiscal 2019. His pay includes salary of $4.2 million, stock awards of $5.7 million, option awards of $1.8 million  and incentive compensation of $8.5 million. The change in value of Murdoch’s pension and deferred earnings was $13.7 million.

CEO Lachlan Murdoch’s compensation was $ 29.2 million, down 31% from $42.1 million in fiscal 2019. His pay included $2.5 million in salary, $8.9 million in stock awards, $2.8 million in option awards and incentive plan compensation of $7.5 million. The change in value of his pension and deferred compensation was $5.7 million.

COO John Nallen’s compensation dropped to $13 million from $20.9 million. 

At the onset of the pandemic, Fox's top execs volunteered to give up 100% of their salaries from May 1 to Sept. 30. In total they gave up $2.3 million. 

Fox Corp. executive chairman and CEO Lachlan Murdoch said the company is on a path toward generating an additional $1 billion in affiliate fees by 2022, based on strong renewals for its broadcast and cable network properties so far and in the future.

Fox saw its affiliate fees rise by about 7% in fiscal Q2. Fox had said earlier that it expected to add another $1 billion to its affiliate coffers through retransmission consent and cable carriage fees, primarily because of its focus on live news, sports and events. 

"I can say that our announced expectation that we will do $1 billion of additional affiliate revenue by calendar 2022, we are absolutely still expecting to hit that number,” Murdoch said on the company's earnings call. “That is factoring in subscriber declines. I think we’re doing a terrific job in driving these affiliate fees.”

Related: Affiliate Fees Drive Fox Fiscal Q2

2022 also is the year that Fox’s broadcast rights with the National Football League expire, and Murdoch said the network is already in early negotiations to renew its deal with the league.

“We feel we are in a good place to work with them as our most important partner to renew our rights going forward,” Murdoch said. “But it is early days in the conversation.”

Chief financial officer Steve Tomsic added that Fox already has done several affiliate fee and retrans deals, adding that the strength of its channels -- Fox News is a perennial ratings winner as is its Fox broadcast network -- has led to multi-year carriage deals with strong pricing and full distribution.

He added that while virtual MVPDs have added to the mix, they haven’t had a huge impact yet on the overall affiliate fee picture. Nallen said that pricing has been a little better with vMVPDs, but “we continue to expect that we will get progressive increases in cable affiliate growth going into this second half of our fiscal year.”

But Fox also has had a strong virtual presence. Murdoch said that 11.7 million people watched last week’s Super Bowl via streaming, and 70% of those people watched on a Fox-owned platform. He pointed to its streaming news service Fox Nation, launched in 2018, where 80% of the people that sign up for the free trial of the service convert to paying subscribers.

Asked if he would consider taking his networks direct-to-consumer, like other programmers have recently, Murdoch was more cautious.

“It’s something we are always looking at, but we always have an eye on not damaging the current business model where we generate a tremendous and growing amount of revenue from our cable subscribers,” Murdoch said. “We have the capability to go direct-to-consumer, we took the technology that we built with us when we separated from Disney, we are running direct-to-consumer businesses with Fox Sports in Pay-Per-View with Fox Nation in a different manner. We’re happy where we are now, and we’ll see what the future brings.” 

After nearly seven decades in the media business, beginning with a string of small local Australian newspapers in the 1950s that he built into the television, film and publishing behemoth that became News Corp. and 21st Century Fox, Rupert Murdoch again managed to shock the world with his decision last year to sell the bulk of his empire to The Walt Disney Co.

While the elder Murdoch has made a career out of going against the grain, mainly in buying assets at what others thought were exorbitant prices, this time was different. This time, Murdoch and Fox were sellers, and many pundits took their action as a sign that it may be time to throw in the media towel.

By now, Murdoch and Fox should be used to being underestimated. Whether it be the $1.58 billion the fledgling Fox broadcast network spent in 1993 to win National Football League television rights — an unheard of sum at the time, but almost quaint today — the 1996 decision to launch an all-news channel with a conservative bent (Fox News Channel) or the $5.7 billion Murdoch paid in 2007 for The Wall Street Journal (a 67% premium), there has been a common theme to his company’s actions: They knew something others didn’t.

That maverick sensibility has driven Rupert Murdoch, now 21st Century Fox’s executive co-chairman, since the beginning. It’s a trait he has passed on to sons Lachlan, also executive co-chairman, and James, 21st Century Fox’s CEO. Collectively, the three Fox leaders are the 2018 Multichannel News Executives of the Year.

Driving Up the Price

In typical Murdoch fashion, the most recent deal didn’t go down without some controversy. Disney, which had agreed to buy roughly two-thirds of 21st Century Fox in December 2017 for $52 billion, ended up paying $71.3 billion for the assets after a month-long bidding war with Comcast. After the deal is closed — expected within the first quarter of 2019 — the Murdochs will be among the largest individual shareholders in Disney and will control New Fox, consisting of 28 owned-and-operated television stations, the Fox broadcast network, cable news stalwarts Fox News Channel and Fox Business Network and national sports channels FS1, FS2 and Big Ten Network.

In one fell swoop, the Murdochs have transformed one of the world’s biggest cable and broadcast content companies into a leaner, meaner and more streamlined entity mainly focused on live news and sports.

Disney has doubled down on content under the premise that in the new streaming video paradigm, volume will win the day. Fox, though, has taken the opposite tack, focusing on live fare that will hopefully drive viewership, ratings and ad dollars its way.

The Murdochs were not available for this report. but there has been plenty written and speculated about the Disney deal and the New Fox entity that will emerge. For the most part, New Fox will be run by current 21st Century Fox co-executive chairman Lachlan Murdoch, who will be chairman and CEO of the new business. Lachlan came back into the family business in 2014 after a nine-year hiatus running an Australian investment fund, Illyria Pty Ltd.

While Lachlan will get an assist from 87-year-old father Rupert, who will be co-chairman of New Fox, James Murdoch, who had been CEO of Fox’s Sky satellite TV business in the U.K., and served as CEO of Fox for the past three years, won’t be a part of the new entity, instead opting to go off on his own, at least for a while.

Speculation has been rampant about where James Murdoch will end up. Early guesses that it would be in a senior leadership role at Disney or as chairman of electric car and aerospace company Tesla (he’s a board member) were wrong. For his part, Lachlan has said James was integral in running Fox and in making Sky plc into the leading European satellite platform — it was sold in October to Comcast after another bidding war — but that the Disney sale process was “cathartic” and that his brother decided it was time for a change.

James put it pretty succinctly himself at the Recode conference in May, months before the sale was even decided. “I think it’s time to do something new,” he said.

Comcast dropped out of the bidding for the Fox U.S. assets, but it stayed in the fray for another prized Fox property: U.K. satellite giant Sky. Fox had been trying to consolidate Sky for years (it owned 39%), but was rebuffed by U.K. regulators that feared full control would put too much power in the Murdochs’ hands. When Comcast lobbed in its $31 billion bid for Sky in February, it touched off a second bidding contest that the cable operator ultimately won with a nearly $40 billion commitment. At that price, Comcast also agreed to purchase Fox’s Sky stake for about $15 billion, further filling up the Murdoch’s coffers.

While some pundits had earlier believed the Sky stake was an asset the Murdochs would never give up, it again became a question of value. Lachlan Murdoch said the family holds no grudge against Comcast over Sky. “We don’t have skin in the game anymore,” he said at The New York Times DealBook conference on Nov. 1. “I think [Comcast chairman and CEO] Brian [Roberts] will be a great steward of Sky and they will do very well.”

To understand the impact of the Disney deal, one only has to look at Fox just four years ago when, sensing a shift in the content business, it made an unsolicited offer to buy Time Warner Inc. for $80 billion. That offer was rebuffed, but it was partially based on Fox’s belief that Time Warner properties, especially premium channel HBO, weren’t being properly utilized on the internet.

Less than a year after Fox made its offer, Time Warner launched its standalone HBO streaming service HBO Now and, a year after that, agreed to a $108.7 billion sale to AT&T.

Fox said back in 2014 that, after losing out on Time Warner, it was through with acquisitions and would instead focus on growing the business organically. Just two years later, while the AT&T-Time Warner regulatory approval dance was going on, the idea of selling assets rose to the forefront after Verizon Communications knocked on Fox’s door about a potential deal, Lachlan Murdoch said at the DealBook conference.

Though the family had been considering its moves in the new TV and entertainment landscape, Lachlan Murdoch said the prospect of being owned by a phone company was not so attractive.

“We didn’t think Time Warner would be a better-run media company because it was owned by a phone company,” he said at the DealBook conference. “We didn’t see the strategic fit.”

Lachlan Murdoch said the ultimate decision to sell was not made emotionally or lightly.

“The journey to sell such a large part of the business was one that took some time, took some time to really think about,” he said at DealBook. “To think about where the industry has gone, what the challenges were that we saw on the horizon, particularly in the entertainment business, but also about where these assets could sit to make them more viable and stronger than with us.”

A few months after the initial Verizon overture, Disney chairman and CEO Bob Iger called with a proposal, which Murdoch said “immediately made sense. My brother and I went to my father’s office and had a long conversation about it.”

When Disney announced on Dec. 14, 2017, that it had agreed to purchase the Fox assets — cable channels FX, FXX and National Geographic; the 20th Century Fox film and production studios; 22 regional sports networks; and Fox’s 30% interest in online video pioneer Hulu — it had expected to sew up the deal in a few months. But six months later, after weeks of speculation, Comcast lobbed in an all-cash bid for the assets, touching off a bidding war that made Fox and the Murdochs considerably richer.

Lachlan Murdoch hinted that even after signing the first Disney agreement, Fox knew the battle wasn’t quite over.

“Comcast was there in the beginning, they came shortly after we heard from Disney,” he said at the DealBook conference. “We couldn’t get our heads around the regulatory risk. I thought that our initial negotiation with Disney was very good, but that we could get a higher price if we could get a bidding war going. We felt there was more value.”

That bidding war lasted for about five weeks and ultimately kicked up the price for the Fox assets by nearly $20 billion. In addition, as part of the regulatory approval of the deal, Disney has agreed to sell off the 22 regional sports networks — valued by some at around $20 billion — within 90 days of closing its larger Fox deal.

Able to Buy More Assets

Now flush with cash, New Fox is expected to be on the hunt for more assets to beef up its existing lineup. So far the company has ponied up $3.3 billion over five years for rights to NFL Thursday Night Football, and another $1 billion over five years for WWE programming beginning in 2019. And there will be more.

“We will buy other things,” Lachlan Murdoch said at the DealBook conference. That could include its former regional sports networks, currently being auctioned by Disney; additional television stations; more sports assets or practically anything else. Lachlan Murdoch said the guiding principle to any additional acquisitions will be if they add to Fox’s already strong position in the industry.

“We are must-have channels for our distributors,” Lachlan Murdoch said at the DealBook conference. “What we don’t want to do is use that leverage in businesses that are not must-have.”

New Fox also appears to be bucking the trend for media companies to chase the Netflix streaming model, focusing more on direct-to-consumer offerings than on traditional distribution methods. Disney is a prime example: it launched a sports-themed DTC offering in April (ESPN+) and plans to launch an entertainment streaming offering, Disney+, next year that will include the recently acquired Fox content.

While Fox also has streaming plans — Fox News launched on-demand OTT service Fox Nation on Nov. 27 — it also realizes that an entertainment streaming service would require bulk the company simply doesn’t have.

At the DealBook conference last month, Lachlan Murdoch said Netflix really has two businesses, distribution and content generation, which both require tremendous scale to be successful.

“What we were seeing, and one of the reasons we sold to Disney, [was] for us to have scale in a direct streaming service, whether it is an FX streaming service or you could bundle some of our channels in an on-demand service, you can get to 2 [million] or 3 million subscribers, like CBS All Access, but then you get capped,” he said. “You need to have the scale of 20, 22, 30, 50 million subscribers to have enough significant scale to make that a real business.”

Although the Disney deal isn’t expected to close until next year, New Fox already has assembled much of its management team. Aside from Lachlan, who will become co-chairman and CEO of New Fox after the deal is closed (Rupert Murdoch will be co-chairman), the company has named 21st Century Fox chief financial officer John Nallen as chief operating officer, while Fox Sports chief operating officer Eric Shanks will become CEO of that unit. Fox News and Fox Business CEO Suzanne Scott and Fox Television Stations CEO Jack Abernethy will continue in those roles in the new company.

The company also poached longtime AMC Networks executive Charlie Collier to become CEO of entertainment at New Fox. Collier, who brought such scripted hits as Mad Men, The Walking Dead and Breaking Bad to AMC, on the surface seems an odd choice given the company’s expected focus on live news and sports, but Lachlan Murdoch said the different genres can reside comfortably and in a complementary manner within the new structure.

Building Around Live Programming

“We see a strength and strategic narrative in New Fox around live programming,” Lachlan Murdoch said. “Having said that, if you look, the amount of entertainment programming is declining at an incredible rate. What we can do is invest in the NFL, invest in baseball, the WWE, and use those to promote our entertainment programming as well. The way I look at is you have a tentpole with the best live news programming in the country, a tentpole with the best broadcast sports in the country, and how do you lift up the entertainment to that?”

A prime example of that strategy is the Tim Allen sitcom Last Man Standing, which Fox took after ABC cancelled the show last year. Moving the show to Friday nights allowed Fox to heavily promote the programming on Thursday nights — when it airs Thursday Night Football — into Friday. Ratings, Lachlan Murdoch said, are 80% better on Fox than they were on ABC.

News and sports has been a powerful draw for Fox and will continue to be. Lachlan Murdoch noted that during Major League Baseball’s World Series and a heavy news cycle in October, Fox networks had 50% of the live primetime U.S. television audience. He added that in late September and early October, the one-two punch of Thursday Night Football and the Senate confirmation hearings of now-Supreme Court Justice Brett Kavanaugh meant that 74% of live viewers in the country were watching live content on a Fox platform.

The Murdochs aren’t the only cheerleaders for New Fox. The Disney deal helped drive 21st Century Fox stock to new highs, with shares up by more than 40% for the year. Some analysts believe there is even more room for growth.

Morgan Stanley media analyst Ben Swinburne estimates that with a leaner, meaner New Fox, the Murdochs will be able to grow affiliate fees for the remaining cable networks by 7% to 8% and retrans fees by about 18% annually.

“Secular headwinds in traditional TV are well known, and we believe Fox’s focus on exclusive sports and the ratings success at Fox News support its ability to drive higher affiliate revenue growth as a smaller portfolio of U.S. networks,” Swinburne wrote in a recent note to clients.

Overall, Swinburne predicts New Fox can generate about 10% adjusted cash flow growth annually, after a flattish fiscal 2019 due to increased sports investments, through fiscal 2023.

Sports will be key to that success. While the news division has driven strong growth over the years — Swinburne estimates that Fox News has grown its share of C3 household ratings from 3.5% in 2010 to 5.3% in 2018 — Fox’s 2013 decision to convert its Speed and Fuel TV networks to FS1 and FS2 helped drive a 40% increase in affiliate revenue between 2014 and 2018. Over the next five years Swinburne sees the sports channels growing affiliate revenue between 7% and 8% annually.

Room to Grow Fees, Retrans Cash

MoffettNathanson media analyst Michael Nathanson, although bearish on linear TV prospects in general, also noted in a recent research report that Fox has ample runway for affiliate fee and retrans gains.

While operating profits in fiscal 2018 were down significantly at the television unit — $362 million, compared to $894 million in the prior year — and will continued to be pressured in fiscal 2019 as increased sports costs are factored in, Nathanson said it would be a mistake to use that as a benchmark for the future.

That massive investment in sports “equates to an unrivaled negotiating hand that will lead to accelerated revenue growth over the next five years,” Nathanson wrote.

At current valuations, most analysts peg New Fox at between $9 and $13 per share, based on the $38-pershare price Disney is paying for the other Fox assets. But most see that valuation — roughly nine times estimated 2018 earnings — as missing the point.

In his report, Nathanson wrote that there is a danger that too much focus on near term numbers “clouds the view of the compelling story at New Fox,” adding that all signs point to strong growth ahead.

For Fox and the Murdochs, it’s just another case of being underestimated. We’ve all seen how that usually pans out.

21st Century Fox executive chair Lachlan Murdoch put into words what most pay TV  operators feared in the wake of the programmer’s plans to pare down to select broadcast and cable assets while beefing up on sports rights – when the dust settles distributors can expect retransmission consent fees for its broadcast stations to rise.

Fox agreed in December to sell its film and TV production studios, regional sports networks and FX, FXX and National Geographic cable networks to The Walt Disney Co. for about $66.1 billion, while keeping its broadcast network, TV stations, and cable channels Fox News Channel, Fox Business, FS 1 and FS 2 and the Big Ten Network. More than a month later, the programmer agreed to pay $3.3 billion over five years for rights to Thursday Night Football games.

“We see great potential to increase our retransmission revenue quite aggressively,” Lachlan Murdoch said on a conference call to discuss fiscal second quarter results. “We think that for two reasons, one obviously is the focus and investment in sports with the new NFL Thursday night packages, but also being a more focused company with fewer channels in our bundle [we] will be able to drive our retrans for the stations quite aggressively.”

His brother, CEO James Murdoch, was equally encouraged by the retrans potential of the deal.

“It’s still a growth trajectory in  terms of getting what we think is a fair price, given the strength of the network, the strength of the stations and the size of that audience,” James Murdoch said.

And although the premium paid for Thursday Night Football was high -- nearly 50% -- for content that has suffered declining ratings, Fox believes adding the Thursday night games to its existing Sunday NFL package could grow viewership.

“When you look at the licensing that the NFL has undertaken, with expanding to Thursday night and we’ve talked in the past about what fragmentation can do to the overall audience on each individual day,” he continued. “We think the right answer is to concentrate that audience and to have Fox be the clear leader in NFL broadcasting.”

He added that having the extra night of football will help Fox’s other shows in terms of promotion and will also solidify the network’s position as a sports leader.

“In general, as the scarcity value of large audiences coming together around national events continues to rise, we really want Fox to be the home of that kind of compelling product,” James Murdoch said.

Lachlan and James Murdoch sure didn’t sound like two media chiefs hot to unload their programming assets Wednesday, spending a good portion of 21st Century Fox’s fiscal first quarter earnings call touting the growth prospects for their cable and satellite operations.

But while neither executive would directly address speculation around their desire to sell assets, they didn’t quite squash all of chatter either.

Fox was said to be in talks, since ended, to sell its movie studio and cable assets like FX Networks and National Geographic channel as well as its 39% stake in European satellite company Sky to The Walt Disney Co. While Fox co-executive chairman Lachlan Murdoch opened up the earnings call telling analyst he would not respond to media speculation, he had plenty of wind left to tout the company’s ongoing operations.

Overall results were strong – revenue was up 8% in the fiscal first quarter and affiliate fee revenue for its cable channels rose 11%, due to contractual increases across all of its brands.

“We told you many years ago that innovative disruption would come to our industry,” Lachlan Murdoch said on the call. “…We moved early to jettison our thin brands and went deep with investments for our rich distinctive brands, when many market pundits were skeptical of this approach.”

He added that because of that strategy, Fox’s brands have full carriage on all traditional and newly launched platforms.

“There is a lot of talk about the growing importance of scale in the media industry. And let me be very clear, Fox has the required scale to continue to both execute on our growth strategy and deliver increased returns to shareholders,”  Lachlan Murdoch said. “We are specifically seeing this in our affiliate fee growth again this quarter and the success of Hulu and our inclusion in all of the emerging MVPDs. We are excited about all of our brands and the breadth of opportunity they continue to offer.”

Asked if the changing landscape Fox is rethinking its asset mix and whether scale matters less or more today, CEO James Murdoch said that the company has changed its portfolio over the past several years.

“We’ve really simplified our operating model, we’ve got a great set of brands and a great set of assets that we really like,” James Murdoch said. “And as you can see from these quarterly results and from the past couple of quarters I hope, a real trajectory of good performance.”

James Murdoch also commented on plans to fully consolidate the Sky satellite TV business, adding that the company continues to work with U.K regulators and hopes to receive approval of the transaction by the middle of 2018.

21st Century Fox executive chairman Lachlan Murdoch opened the company's fourth quarter earnings call Wednesday with a statement about Fox News Channel, which he noted "has been the news over the past few weeks."

He said the company "moved quickly and decisively to protect the business, protect its employees and protect the unique voice Fox News broadcasts."

He did not mention former Fox News chairman Roger Ailes by name. Ailes resigned last month after being accused of sexual harassment by former FNC anchor Gretchen Carlson.

Read more at broadcastingcable.com.

21st Century Fox reported higher net income for its fiscal fourth quarter.

Net income rose to $567 million, or 30 cents a share, from $87 million, or 6 cents a share, a year ago, when the company had costs associated with the sale of Sky and Endemol Shine Group. Segment operating income was $1.45 billion, compared with $1.54 billion last year.

Revenue rose 7% to $6.65 billion.

"We delivered full-year revenue and earnings growth on the strength of gains in affiliate and advertising revenues despite considerable foreign exchange headwinds and difficult film comparisons," said executive chairmen Rupert and Lachlan Murdoch.

21st Century Fox's cable network programming segment reported flat operating income in the quarter despite a 10% increase in revenue. Revenue was up 10%, but expenses rose 15% as sports programming costs went up and political coverage costs increased at Fox News Channel.

Read more at broadcastingcable.com.

In what was one of the worst kept secrets in a medium not known for keeping secrets, 21st Century Fox chairman and CEO Rupert Murdoch will officially hand over the CEO reins to his son James on July 1, with his other progeny Lachlan Murdoch assuming the role of co-executive chairman.

News of the shift first surfaced last week. In a statement Tuesday 21st Century Fox said that current chief operating officer Chase Carey will become executive vice chairman and serve in that role through June 30, 2016.

“It has always been our priority to ensure stable, long term leadership for the Company, and these appointments achieve that goal,” Rupert Murdoch said in a statement. “Lachlan and James are each talented and accomplished executives and together, we, as shareholders and partners, will strive to take our company to new levels of growth and opportunity at a time of dynamic change in our industry.”

“I can’t thank Chase Carey enough for his friendship, counsel and leadership over the past decades,” Murdoch continued. “He will be actively engaged in supporting Lachlan and James as they step in to their new roles.”

Both James and Lachlan have been groomed for top spots at the company for years and are expected to work together in partnership running the company. The elder Murdoch, who at 84-years old is still in good health and a  common presence around the office, is also expected to continue to be heavily involved in decision making at the company.

Chase Carey said: “I am grateful to Rupert for giving me the opportunity of a lifetime and truly believe there isn’t a Company out there that’s more exciting, with more growth potential, than 21st Century Fox. I look forward to continuing to work with Rupert to support Lachlan and James in their new positions.”

Lachlan Murdoch and James Murdoch, in a joint statement, said: “We are both humbled by the opportunity to lead, with our father and the talented team of executives at 21st Century Fox, this extraordinary company.

We are grateful to Chase for being the leader and partner that he has been, and we are both delighted that his wisdom and sure handedness will continue to serve 21st Century Fox. We are also grateful to the Board for providing us the opportunity to lead this great company.”

“Most importantly, we each look forward to working with the entire team of creators, executives, artists and all of our colleagues that make up our global businesses, to steer the Company into the future, and to drive continued value for our shareholders.”

Rod Eddington, Lead Director, 21st Century Fox, said: “The Board has long been focused on succession and we’re fortunate to have two very talented executives in Lachlan and James to take this Company into the future. Working in tandem with Rupert, we’re confident their partnership and stewardship will give this business real momentum for many years to come. We are also deeply grateful to Chase Carey for his many years of exceptional leadership and his agreement to continue his contributions through his new position.”