Bloomberg reports James and Lachlan Murdoch, who took over leadership of 21st Century Fox from their father Rupert a year ago, told analysts on an earnings call Wednesday they acted swiftly to protect the highly profitable news channel and its employees when allegations against Ailes surfaced in the form of a harassment suit by a former anchor. The network, now led by Rupert Murdoch on an interim basis, is having its best year ever, they said.
“There is no desire to shift the position it has in the market,” James Murdoch, chief executive officer of 21st Century Fox, said in response to analysts’ questions. “It’s a very successful business, and we are undergoing a transition to new leadership that should not flag at all a transition of the underlying positioning or the strategy of the channels.”
The Murdochs’ response to concerns about Fox News, with Co-Chairman Lachlan Murdoch’s opening remarks on the call focusing on the cable channel, highlights the importance of the network to the Fox empire. Fox News, known for its conservative commentary, accounts for about a quarter of the company’s profit and ranks as the most watched U.S. cable network in the current TV season, buoyed by coverage of the U.S. presidential race.
Shares of Fox fell as much as 4.5 percent to $25.81 in extended trading after the New York-based company announced tepid results for the fourth quarter ended June 30. Profit excluding some items rose to 45 cents a share, including a 7-cent tax benefit, compared with the 37-cent average of analysts estimates. Revenue grew 7.1 percent to $6.65 billion, missing analysts’ projections of $6.68 billion.
“Despite the management turmoil at Fox News, this quarter’s results illustrate that Fox is well-positioned with leading positions in broadcast and cable network and filmed entertainment,” said Paul Sweeney, a Bloomberg Intelligence analyst.
Fox is benefiting from rising ad sales and affiliate fees at both of its TV businesses -- cable and broadcast. Fourth-quarter profit from cable was held back by rising program costs, for sports and political coverage during the U.S. presidential election. Lachlan Murdoch said on the call his father Rupert, the company’s 85-year-old founder, was in the best position to lead Fox News after Ailes’s resignation.
The broadcast TV business, made up of the Fox Broadcast Network and local stations, was buoyed by higher retransmission fees and advertising in the entertainment division. Those gains outweighed a drop in ad dollars for sports, because of fewer events, and higher programming and marketing costs for entertainment programming.
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