Is Fox's Business Channel A Go?

Chatting with Rupert Murdoch at an investor conference some weeks back, I asked the News Corp. (NWS ) chairman where things stood with his long-awaited Fox business channel. "We're hiring people," he said--note plural--with an eye toward an '07 launch. This conversation came just a few days after the announcement that former nbc on-air star Alexis Glick would serve as director of business news at the Fox News Channel and play a role on a business channel should one launch. Now comes word that Comcast (CMCSA ), the nation's largest cable outfit, will carry the channel on its digital service.

Murdoch & Co. first floated the notion of a 24/7 business channel two-plus years ago, and we're still waiting. This is unusual in the House of Fox. Murdoch generally trusts his gut and goes for broke. Case in point: He bucked conventional wisdom and launched an alternative news channel. (It worked.) He has waxed confident and expansive about the still-not-official, still-unnamed business channel. Interestingly, Roger Ailes, chairman and ceo of Fox News Network (NWS ) and the savvy programmer who would actually run the new channel, has not.

Really, though: Why would Rupert do this? Is there a business case for another business channel?

DOW 12,000 ASIDE, this is not a moment when business mania is crossing over to the mainstream. Business media remains a destination around which a desirable and affluent audience gathers, but both print and television have suffered since the dot-com bust. TNS Media Intelligence--with the best estimates available, since NBC Universal does not break out its results--shows a truly impressive decline in ad revenues for reigning business cable player CNBC. Ad revenues topped $500 million in 2002 and were at $313.8 million last year. But the beauty of the cable business is that it features two revenue streams, one from ads and one from subscribers. CNBC is in around 90 million homes, and, according to an individual familiar with the numbers, looks likely to post its most profitable year in '06, with net topping $275 million. To put that into perspective, last year total NBC Universal profits were around $3.7 billion. "CNBC still enjoys the exclusive status as the sole all-business channel," says John Rash, senior vice-president at ad agency Campbell Mithun (IBG ). It has since CNNfn disappeared in late 2004.

So it looks like the money is there. And all the more so should Fox expand on the focus of CNBC and "Fox-i-fy" the programming in ways that CNBC's screaming head Jim Cramer might not even recognize. Is it a good idea? Well, it is curious that Ailes has been much shier than his boss about this, since he is the guy who launched CNBC in the first place. He may be remembering that CNNfn didn't secure a critical mass of cable subscribers at launch and be leery of talking as loudly as his boss with so few deals in place.

It is still early days for a potential Fox business channel. Yes, the digital service would allow Fox to reach about half of Comcast's 24 million total subscribers. But a spokeswoman for Cox Communications, the third-largest cable operator in the land, said that her company had yet to have any discussions with Fox over such a channel. Over at Time Warner Cable (TWX ), the second-largest in America and one holding the key to the crucial Manhattan market, a spokesperson confirmed ongoing "active negotiations with Fox," but would not specify what those discussions entailed. Still, in key corners of the cable industry, Fox's entrance into the category at some point next year is expected, even if Murdoch has to pay the cable guys in a big way to get the channel on the air. "Fox has sent signals to the ad community that a Fox business channel is coming, date to be determined," says Rash.

Murdoch's current status as the one media mogul who has it all figured out is bound to be dented sooner or later. But, faced with the choice of betting on Murdoch's confidence or Ailes's reticence, I'll place my money on Rupert.

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By Jon Fine

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