Fox Corp. is ready to deal.
During an interview at a Goldman Sachs conference Tuesday, Fox CEO Lachlan Murdoch explained the company’s strategy in sports, news, and entertainment, but also indicated that it is quite willing to cut some deals.
Murdoch, asked what the next couple of years look like for his company, said that it will continue to focus on news, sports, and live content (“you won’t see us pivoting to entertainment,” he said), but he added that they also plan to find ways to expand.
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“We’ll also use our balance sheet, increasingly, for M&A as we go forward,” Murdoch said.
Fox has very little debt, and a ton of cash, thanks to its business being built around the Fox broadcast channel and Fox News, each of which generate recurring subscriber revenue from pay-TV, as well as ad dollars. Its big streaming bets have been Tubi, the free streaming service, and Venu, the sports-focused offering currently in flux thanks to an injunction.
Murdoch argued that Venu was “pro consumer, it’s pro sports fan,” and that it would look nothing like cable TV.
“It’s at an affordable cost, and it really cleans up a lot of what I think, what’s become complicated or broken in the sports rights environment in the United States,” he continued, noting that now to watch every NFL game people need a pay-TV subscription but also a flurry of streaming services. “For the same games you paid $64 for three years ago, you have to pay $114 and you have effectively, five different devices or five different subscriptions. That’s nuts.”
He also argued that Venu was not meant to jeopardize the traditional pay-TV business, and that the company would lose if a pay-TV sub swapped cable for Venu.
“If we lose a cable subscriber to Venu, we lose money in that transaction, because we lose the subscriber to Fox News, the local station retransmission is built within Venu, but we lose the Fox News subscribers,” Murdoch says. “So we don’t want to have a like to like swap of cable to Venu. We want to target Venu very much, just at the cord cutters who’ve already cut the cord or were never in the system to begin with.”
Murdoch also described his approach to rights, noting that the company stayed out of the NBA race, and recently dropped the WWE. He also recounted a deal that never happened: “Very smart bankers came to us and said, you have a great opportunity. You can buy back the regional sports networks for half of what you sold them for [to Disney], and we stayed away from far away from that as possible.”
And he added that the company is committed to the sports betting market, and that it intends to exercise its right to acquire a sizable stake in the betting firm Flutter (which owns FanDuel) before it expires in 2030.
“We’ve begun the process with state regulators,” Murdoch said. “To fully monetize the option, we need to be licensed as a gaming operator, even with only with only 18.6% and so we’ve started that process with state regulators to begin the gaming licensing approvals.”
