Fox Counts on Cable Fees to Deliver Sales That Beat EstimatesBy
It’s clear why 21st Century Fox Inc. wants to stay in the news and sports businesses.
Rupert Murdoch’s movie and TV company posted another quarter of double-digit growth in fees from cable and satellite providers, driven by the popularity of Fox News. The ability to collect more revenue from distributors makes news and sports attractive even as pay-TV subscriptions and advertising fall.
That could be the reason news and sports weren’t on the table when Fox discussed selling assets to rival Walt Disney Co. in recent weeks. Fox’s movie studio and cable networks FX and National Geographic are in a tougher spot and would be easier to part with. The talks have since ended, people familiar with the matter said earlier this week.
Fox posted fiscal first-quarter earnings of 49 cents a share, excluding some items, in line with analysts’ estimates. Revenue rose 7.6 percent to $7 billion, beating the average projection of $6.8 billion.
Profit at Fox’s broadcast division, which also wouldn’t have been included in the Disney deal, slumped 36 percent on higher costs for sports programming, though sports helped generated growth in ad revenue.