Fox Is in Good Shape, Lachlan Murdoch Says Amid Deal SpeculationBy
21st Century Fox Inc. Executive Chairman Lachlan Murdoch declined to comment on reports the company held talks to sell assets to Walt Disney Co., but said the movie and TV business built by his father Rupert is well positioned in a tough climate for media companies.
“Fox has the required scale to continue to both execute on our growth strategy and deliver increased returns to shareholders,” Murdoch said Wednesday on a call with investors, after the company reported quarterly sales that beat analysts’ estimates.
The comments follow reports this week that Disney held talks to buy Fox’s film and TV studio, along with cable networks including FX at National Geographic. Fox would have retained the Fox News Channel, the flagship broadcast networks, local stations and sports programming. The discussions have ended, according to people familiar with the matter.
The news raised questions about where the Murdochs, who hold almost 40 percent of the voting power in Fox, plan to take the company. They’re currently trying to buy out public shareholders in Sky Plc, making it a wholly owned subsidiary of Fox, though the deal has been slowed by regulatory scrutiny.
Fiscal first-quarter profit of 49 cents a share, excluding some items, met Wall Street estimates. Sales rose 7.6 percent to $7 billion, buoyed by double-digit growth in the fees cable channels including Fox News and FX collect from pay-TV systems.
The continued strength of news and sports may explain why those businesses weren’t on the table when Fox discussed selling assets to Disney. Fox’s movie studio is in a tougher spot and would be easier to part with.
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.
Fox was little changed in extended trading. The stock rose 1.2 percent to $28.09 at the close in New York.