Can Fox Hang on to Its Lead?

Kevin Reilly, Fox Broadcasting's entertainment president, is racing to find new shows. His worry is that the network's buoyant ratings could sink once Simon Cowell, the caustic talent judge and star of American Idol, leaves the successful singing competition this month after nine seasons.

The Fox programming chief wants to remake a network that has relied on Idol, hour-long dramas, and cartoon comedies to lead in the crucial 18-to-49-year-old viewer category for almost six years. In addition to Cowell's exit from Idol, TV's most watched show, Fox is losing Kiefer Sutherland and his popular thriller, 24. The network needs fresh fare, especially because 18-to-49 ratings for both Idol and a medical drama, House, are slumping.

Reilly, 47, insists he welcomes the challenge. "It's a high-class problem to have," he says. "The shows are still very strong. But if we don't come up with new shows for two years, we could be in the same shape as some of the other networks." He's charting a course toward comedies; Fox may air as many as four new ones this fall. Reilly won't say yet which shows Fox will unveil at its May 17 upfronts, the annual event in New York where TV networks preview shows for advertisers. Among the candidates: Running Wilde, featuring Arrested Development star Will Arnett as a Beverly Hills jerk who falls for an environmentalist. "Everyone has reality shows now, and folks want a good laugh," Reilly says.

Others are less optimistic about the strategy. The ratings dip for Idol and House, along with the conclusion of 24, have led Spencer Wang, an analyst at Credit Suisse (CS) in New York, to predict that News Corp.'s (NWS) broadcast network will see less growth in advance advertising sales for the TV season that starts in September.

Wang, who has a neutral rating on News Corp. shares, estimates Fox's upfront ad sales will increase 14 percent from last year's $1.6 billion. His Apr. 29 report predicts gains of 20 percent to 30 percent for the network's competitors. "There are icebergs ahead for Fox because American Idol is starting to show signs of age,'" says Brad Adgate, head of research for the ad-buying company Horizon Media.

Class A shares of News Corp., the New York-based media company controlled by Chairman and Chief Executive Officer Rupert Murdoch, have gained 6 percent this year and on May 12 closed at 14.51. News Corp. also owns the Fox film studio and The Wall Street Journal.

Reilly, whose résumé includes shepherding production of the HBO hit The Sopranos, has a record of sniffing out winners. In two tours at NBC (GE) he was part of the team that developed ER and Just Shoot Me. Before being fired in an NBC power struggle in 2007, he led development of The Office and 30 Rock.

At Fox, Reilly developed the animated hit The Cleveland Show and Glee, a one-hour musical comedy that has become one of this season's biggest hits, ranking as the network's most watched show in the latest weekly ratings after Idol, according to Nielsen. Overall, Fox's ratings among 18-to-49-year-olds are up 3 percent in the TV season that started in September, Nielsen data show. Cowell is expected to return to Fox in late 2011 with a music-based competition show called The X Factor.

The bottom line: Fox needs to bolster its lineup in response to the departure of American Idol star Simon Cowell and the conclusion of thriller 24.

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