Fox CEO on Sports JV App: ‘We Can’t Wait to Launch It This Fall’

Fox Corporation’s joint venture sports streaming app with Disney and Warner Bros. Discovery might be in the legal crosshairs of U.S. lawmakers and the court system, but that hasn’t dissuaded Fox chief executive Lachlan Murdoch from heaping praise on the product.

Lachlan Murdoch

Speaking March 8 on the Fox’s third-quarter fiscal call, Murdoch said the app has more than 150 engineers and executives “dedicated to building a unique innovative product,” which he said focuses on sports fans outside the traditional pay-TV bundle.

Last month, U.S. House of Representatives Jerry Nadler (D-NY), ranking member of the House Judiciary Committee, and Rep. Joaquin Castro (D-TX) sent a letter to Disney CEO Bob Iger, Murdoch and David Zaslav, CEO of Warner Bros. Discovery, citing concerns of possible negative consumer impact and anti-competitive behavior as a result of their sports streaming app JV.

Online TV streaming service Fubo in February filed an antitrust lawsuit against Disney, Fox, and WBD, alleging that the companies have engaged in a years-long campaign to block Fubo’s streaming business. The complaint alleges that the JV app “steals from Fubo’s playbook.”

Regardless, the JV this week launched an internal beta app, which Murdoch said he trialed, adding that the unnamed app is an “incredibly exciting” product. In March, Pete Distad, a former Apple executive following six years at Hulu, was named CEO of the JV.

“He is off to a flying start,” Murdoch said. “We can’t wait to launch it this fall.”

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Democrat Lawmakers Voice Antitrust Concerns Over Pending Disney, Fox, Warner Bros. Discovery Sports App

U.S. House of Representatives members Jerry Nadler (D-NY), ranking member of the House Judiciary Committee, and Rep. Joaquin Castro (D-TX) April 16 sent a letter to Disney CEO Bob Iger, Fox CEO Lachlan Murdoch and David Zaslav, CEO of Warner Bros. Discovery, citing concerns of possible negative consumer impact and anti-competitive behavior as a result of their sports streaming app Joint Venture.

Jerrold “Jerry” Nadler

Citing recent comments by Disney CFO Hugh Johnson, who said his company, Fox and WBD collectively control 80% of the consumer access to major live sports on television, the lawmakers wondered how the companies’ proposed sports app joint venture would impact consumers’ streaming access to major sports going forward.

“Without more complete information about the pricing, intent, and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors,” Nadler and Castro wrote in their letter.

Among the 18 questions submitted by the lawmakers were: what consumer markets would be affected by the joint venture; the app’s projected subscriber numbers; whether the app would distribute non-partner content; how the pricing of Fox Sports, ESPN, TBS, etc., included in the app would compare with their access on pay-TV; and if the the JV would offer stand-alone streaming sports services, among other issues.

Joaquin Castro

“The Joint Venture raises questions about how this new offering would affect access, competition, and choice in the sports streaming market,” Nadler and Castro wrote. “Without more-complete information about the pricing, intent, and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors.”

The lawmakers said they want the CEOs to answer by no later than April 30, with their responses copied to the Department of Justice.

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Fox CEO Expects Initial 5 Million Subs for Sports Streaming App Joint Venture

The pending Disney, Warner Bros. Discovery and Fox joint venture sports streaming app is projected to generate 5 million paying subscribers in the first five years, according to Fox Corp. CEO Lachlan Murdoch.

Speaking March 4 at the Morgan Stanley’s Technology, Media & Telecom Conference in San Francisco, Murdoch said the app, which combines ESPN, Fox Sports and Warner Bros. Discovery’s sports-themed content on TBS, TNT, Bleacher Report Sports and Max, into a standalone platform would target upwards of 60 million consumers not currently paying for linear TV access — but with a “high percentage” interested in sports.

“It’s actually a net positive for the industry,” Murdoch said, adding that Fox remains platform-agnostic when it comes to distributing content, including live sports.

He dismissed suggestions the “pro-consumer package” would accelerate cord-cutting and initially attract 10 million to 20 million subscribers. Instead, Murdoch envisions the app operating like an online TV service, similar to YouTube TV.

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“We don’t think this is the case,” Murdoch said. “What this bundle does is put a majority of sports into one bundle. It’s an easy place for sports fans to come to.”

He didn’t divulge possible pricing for the app, which some analysts believe could cost from $40 to $50 monthly.

Fox: Tubi Saw 62% Surge in Q2 Viewing, 17% Increase in Ad Revenue

Fox Corp.’s ad-supported streaming video platform Tubi saw a 62% increase in viewing time, along with a 17% spike in advertising revenue for the fiscal quarter that ended Dec. 31, 2023.

The platform averaged 78 million monthly users, who logged in 2.5 billion streaming hours in the quarter (up from 1.54 billion hours in the previous-year period) and set a new monthly record of 855 million total viewing hours in December alone.

“Tubi has consolidated its position in the streaming landscape, ranking as the most-watched free TV and movie streaming service in the United States, according to Nielsen, and surpassing Peacock, Max, Paramount+, and Pluto TV in view time for seven consecutive months,” Fox CEO Lachlan Murdoch said on the company’s Feb. 7 fiscal call.

While Tubi continues to gain market traction (and advertising revenue), Fox said overall ad revenue dropped 20% in the quarter primarily due to the absence of the FIFA Men’s World Cup at Fox Sports (compared with 2022), lower political advertising revenue at the Fox Television Stations due to the absence of the 2022 midterm elections, and the impact of elevated supply in the direct response marketplace, lower ratings and higher preemptions associated with breaking news coverage at Fox News Media.

Fox reported net income of $115 million on revenue of $4.23 billion, compared compared to net income of $321 million on $4.61 billion as compared in the prior year quarter.

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Fox CEO: ‘We’re Ready to Go’ With a Direct-to-Consumer Offering Surrounding News and Sports

Fox Corp. may have largely turned its back on the subscription streaming video-on-demand market, but it hasn’t turned a cold shoulder to direct-to-consumer digital media distribution.

The company currently operates several digital platforms including the free ad-supported Tubi entertainment streaming platform, along with ad-supported Fox Weather, subscription-based Fox Nation and Fox News International.

Lachlan Murdoch

With pay-TV operators continuing to hemorrhage video subscribers, the media company is eyeing distributing its legacy Fox News and Fox Sports programming brands via over-the-top channels, according to CEO Lachlan Murdoch.

“They will be part of any scaled [digital] platform [going forward] regardless of what technology is used to deliver that content and that platform,” Murdoch said on the May 9 fiscal call. “We see DTC in the future. It will come eventually. As we’ve said before, ‘we’re ready to go,’ we have the technology in place to go DTC when we deem that necessary or prudent.”

At the same time, the executive reiterated that Fox continues to drive “industry leading” affiliate pricing across the multichannel video programing distribution ecosystem.

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Affiliate fee and advertising revenue in the quarter topped $1.85 billion and $1.87 billion, respectively, up from $1.79 billion and $1.3 billion in the previous-year period.

“Our pricing is not theoretical, it has been set regarding a third of our programming in this fiscal year,” Murdoch said. “We’re very pleased with where we sit and where we’ve established a market price for our brands.”

Fox CEO: Tubi the ‘Little Guy’ in ‘Monty Python’ Movie Fight Scene

As media giants grapple with escalating costs and losses in their streaming video business units, Fox Corp. sits on the sidelines having washed its hands of its Hulu ownership stake in 2019 following the $71 billion 20th Century Fox asset sale to Disney.

For CEO Lachlan Murdoch, the strategy of moving away from subscription streaming to ad-supported VOD is akin to the infamous fight scene in the 1995 dark comedy Monty Python and the Holy Grail, in which two knights attempt to maul each other in numerous ways.

CEO Lachlan Murdoch

Speaking March 9 at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco, Murdoch says Tubi remains the streaming market’s unassuming player avoiding the direct-to-consumer fiscal bloodshed.

“We’re the little guy,” Murdoch said. “We’re going to be the one to survive because we haven’t had our arms or legs cut off.”

Murdoch said the whole thesis behind the 20th Century Fox asset sale to Disney was based on avoiding a streaming arms war.

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“We could give Disney a winner in the SVOD space [i.e. Hulu] while focusing on our core brands: Live news and live sports, which is where advertisers and audiences are pivoting to,” he said.

Unlike the market focus on free ad-supported streaming TV channels, Murdoch said Tubi isn’t a FAST platform. Instead, he characterizes the service as an ad-supported VOD pure play with the largest video content library of any streaming video service in the world at 50,000 titles.

“All library titles, which keeps the costs down,” he said. “Viewer engagement is focused on specific content, which makes that viewer very important to advertisers.”

Murdoch said he believes the evolution of ad-supported SVOD tiers to the market is good for the whole streaming industry, which he said will up CPMs at Tubi.

Taking a swipe at competing SVOD services such as Paramount+ and Peacock that are incorporating live sports onto their platforms, Murdoch said Fox would continue to keep sports exclusive to linear broadcast television.

“We don’t have a general entertainment underperforming SVOD service, so we don’t need to put sports in,” he said. “The value for us is to keep those sports exclusive to broadcast.”

When asked about the pending high-profile $1.6 billion Dominion Voting Systems defamation lawsuit against Fox News, which alleges Fox allowed opinion hosts such as Sean Hannity, Tucker Carlson, Maria Bartiromo and Laura Ingraham to knowingly peddle conspiracy theories about Dominion voting machines used in the 2020 Presidential Election, Murdoch said the case wasn’t about breaking the law or news gathering.

“A news organization has an obligation to report news wholesomely, and without fear or favor,” he said. “And that’s what Fox News has always done. And that’s what Fox News will always do. And I think a lot of the noise you hear about this case is actually not about the law. It’s not about journalism. It’s really about the politics. And that’s unfortunately more reflective of the polarized society we live in today.”

Murdoch claimed that more Democrats, Hispanics and Asians watch Fox News than watch CNN or MSNBC.

“So, the position of the [Fox News] channel is very strong,” he said.

The Dominion lawsuit is slated to go to trial in April, according to Murdoch.

CEO Lachlan Murdoch Says He Can’t Discuss Possible Fox/News Corp. Consolidation as Topic Dominates Earnings Call

With Wall Street scuttlebutt in high gear regarding a rumored reunification between Fox Corp. and News Corp., Lachlan Murdoch, CEO of the former, tried unsuccessfully to avoid the topic on the Nov. 1 fiscal call.

“I really can’t really comment on it because we don’t really know if there is a deal or will be a deal,” the co-heir apparent to the Rupert Murdoch-founded media company said when asked a possible transaction. “It’s impossible to comment on anything that doesn’t exist today. We have to be patient and wait to see what the outcome of the special committees’ discussions and processes [are].”

Rupert Murdoch split up News Corp. in 2013, spinning off the company’s legacy print and digital news operations, including The Wall Street Journal, under the flagship name, and organizing the entertainment assets under the 21st Century Fox banner. The latter changed to Fox Corp. in 2019 after Murdoch sold 21st Century Fox to Disney for $71 billion.

With media consolidation and scale an ever-present issue among analysts, the prospect of a reunification between Fox and News Corp. had both companies’ stock up in early morning trading.

“Scale, you have to be focused on it, right?” the younger Murdoch said. “Scale is important and what we’ve seen among our media peers over the last few years is our peers getting bigger through mergers and acquisitions. Scale lends flexibility in many ways. So, we continue to grow our business and look at M&A and be very disciplined how we look at it. Particularly over the next couple years when opportunities in the marketplace will emerge.”

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But to make any corporate re-merger between Fox and News Corp. a reality would take a majority of non-Murdoch family member shareholders’ approval. The Murdoch family reportedly owns a 40% controlling interest in Fox and News Corp. shares, respectively.

“As has been made public, News Corp. and Fox have established separate special committees to explore a potential accommodation,” Murdoch said. “For a transaction to proceed, it would need the approval of both committees and supportive vote by the majority of the minority affiliated shareholders of each company. The special committees have not made any determination at this time, and there can be no certainty the company will engage any transaction.”

Fox Nation Ups SVOD Subs 80% in FY 2022, Tubi Eyes 45% Ad Revenue Growth

Spurred in part by the brand’s strength across cable television, the Fox Nation subscription streaming video service saw an 80% increase in paid subscribers for the fiscal year ended June 30, based in part on strong conversion rates from free trial subscribers.

Parent Fox Corporation has not disclosed Nation subscriber numbers since launching the politically themed SVOD in 2018. A recent Kagan research report on cable news SVOD subscribers found that less than 5% of the 2,500 survey respondents subscribed to the platform.

Speaking on the Fox Corporation Aug. 10 fiscal call, CEO Lachlan Murdoch suggested the Fox Nation viewership gains reflected Fox News’ ongoing domination of the cable news market.

“Fox News was the only cable news network to post viewership gains in the fiscal year in the key 25-54-year-old demographic,” Murdoch said, adding that the network saw 30%+ viewership hikes among Latino and Asian demographics.

Separately, Murdoch said that Tubi, the Fox-owned ad-supported VOD and free ad-supported streaming television platform, realized a 45% growth in revenue over the past 12 months of the fiscal year, driven by a nearly 40% jump in monthly average users.

“Both metrics came in better than planned, reinforcing our decision to invest in this strategic asset,” Murdoch said. Fox acquired Tubi in 2020 for $440 million.

The executive said that Tubi users increased 34% in the fourth quarter, underscored by the addition of 25 linear channels on the platform, expanded the VOD library to more than 45,000 titles, and premiered 13 Tubi original programs.

“We will continue to invest judiciously in Tubi with our sights set on achieving $1 billion in revenue run rates in the next couple of years,” Murdoch said.

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For the fiscal year, Fox reported total revenue of $13.97 billion, an 8% increase from the $12.91 billion reported in the prior year. Advertising revenue increased 9%, primarily due to higher pricing at Fox Sports and Fox News Media, continued growth at Tubi and the return of a full schedule of live events at Fox Sports.

These advertising gains were partially offset by lower political advertising revenue. Other revenue increased 15%, primarily due to higher sports sublicensing revenue and Fox Nation subscription revenue, in addition to the impact of the consolidation of entertainment production companies at the television business segment, which include MarVista Entertainment, TMZ and Studio Ramsay Global.

Tubi Says ‘The Freak Brothers’ Most-Watched Program on Platform

Tubi, the AVOD/free ad-supported streaming television platform owned and operated by Fox Entertainment, said the premiere episode of original animated series “The Freak Brothers” was the most-watched program on the platform since its Nov. 14 debut.

Based on the cult underground comic series, and featuring the voices of Woody Harrelson, John Goodman, Tiffany Haddish and Pete Davidson, among others, “Brothers” delivered 80% more viewers than the next closest series on Tubi.

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“[The show] is a result of the synthesis between great content, stellar cast, superb marketing, new viewer engagement and organic viewership driven by our content personalization engine,” Adam Lewinson, chief content officer, said in a statement.

Since acquiring Tubi in 2020 for $440 million, Fox has doubled down on AVOD/FAST distribution as a less-expensive alternative to subscription streaming spearheaded by Netflix. Fox contends Tubi can soon generate upwards of $1 billion in annual advertising revenue as over-the-top video slowly supplants legacy pay-TV.

Indeed, Fox this month reported that first-quarter fiscal-year 2022 (ended Sept. 30) ad revenue increased 17% to $1.13 billion, from $969 million in the previous-year period.

CEO Lachlan Murdoch attributed the increase in part to the company’s focus on free ad-supported streaming TV and the return of a full schedule of live sports and more scripted programming compared with the postponements and cancellations in the prior year quarter as a result of the pandemic.

“We remain focused on bolstering our core brands and leveraging the unique assets that distinguish us to further propel growth and drive value for our shareholders,” Murdoch said on the fiscal call.

Fox Q1 Ad Revenue Spikes 17% to $1.1 Billion Thanks to Tubi, Live Sports

Fox Corp.’s cold shoulder to subscription video-on-demand continues to pay dividends on the bottom line. The media company Nov. 3 reported that first-quarter fiscal-year 2022 (ended Sept. 30) ad revenue increased 17% to $1.13 billion, from $969 million in the previous-year period. Total revenue increased 12% to $3.05 billion, from $2.72 billion a year earlier.

Lachlan Murdoch

CEO Lachlan Murdoch attributed the increase in part to the company’s focus on AVOD and free ad-supported streaming TV and the return of a full schedule of live events at Fox Sports and more scripted programming at Fox Entertainment compared with the postponements and cancellations in the prior year quarter as a result of the pandemic.

Fox acquired Tubi in April 2020 for $440 million, quickly bolstering the AVOD platform with catalog, primetime network shows, i.e. “The Masked Singer,” and original programming.

“We have made a strong start to the 2022 fiscal year with broad-based operating momentum led by the return of a full slate of live events at Fox Sports and exceptional progress at Tubi,” Murdoch said in a statement.

Murdoch said that as TV viewers migrate back to live news, sports and increase their streaming, the trends underscore the strategy and priorities that have defined Fox since its asset (20th Century Fox Studios) sale to Disney.

“We remain focused on bolstering our core brands and leveraging the unique assets that distinguish us to further propel growth and drive value for our shareholders,” he said.