News Corp. COO Carey: Retrans fees make broadcasting 'a healthy business'

While lower ratings at Fox saw it post decreased ad revenue in the quarter ending Dec. 31, parent News Corp. (Nasdaq: NWSA) said the retransmission-consent fees Fox stations collect from pay TV distributors helped its television segment generate a $35 million increase in operating income.

Chase Carey, News Corp

Carey (Image source: News Corp.)

"The reality of retransmission is it enables the broadcast business to be a healthy business," News Corp. COO Chase Carey told analysts on the company's fiscal second-quarter earnings call on Wednesday. "We've had a very disappointing year ratings-wise, but our broadcast business is up profitability, and that's because we are building it into a dual revenue business," Carey added, noting that its broadcasting business relies on both advertising and retransmission-consent revenue.

News Corp.'s television segment generated $224 million in operating income, up 19 percent compared to this time last year. The company's cable network programming division, which includes Fox News Channel, FX, National Geographic Channel and regional sports networks, saw its operating income increase 7 percent to $945 million.

Increased license fees that News Corp. collects for its cable networks helped it grow affiliate revenue by 13 percent, while ad revenue increased by 8 percent.

News Corp. said it generated $9.43 billion in total revenue for its fiscal second quarter, an increase of 5 percent compared to last year. It posted $2.38 billion ($1.01 per share) in net income, up from $1.06 billion ($0.42 per share) last year.

For more:
- see the release
- see transcript from earnings call (sub. req.)

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