Fox in for major retrans growth following Disney deal, Murdoch says

NFL on FOX
(Fox Sports)

The realignment of 21st Century Fox’s broadcast and cable assets related to the media company’s $66.1 billion asset sale to Disney will result in significant broadcast retransmission revenue growth for Fox Broadcasting and its affiliates, Fox Executive Chair Lachlan Murdoch predicted. 

These comments, of course, will be closely listened to by MVPDs, which are predicted to collectively pay $12.8 billion in retrans fees by 2023, according to SNL Kagan. 

Speaking during Fox’s second-quarter fiscal-year earnings call, Lachlan said the tighter focus on live sports among the remaining Fox assets will be the key growth driver. 

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“We see great potential to increase our retransmission revenue quite aggressively,” Murdoch. “Obviously, there’s the focus and investment in sports with the new NFL Thursday night packages, but also being a more focused company with fewer channels in our bundle [we] will be able to drive our retrans for the stations quite aggressively.”

RELATED: Fox outspends NBC, CBS for sole broadcast rights to NFL’s Thursday Night Football: report

Two weeks ago, Fox outbid incumbent broadcasters CBS and NBC for the broadcast rights to NFL Thursday night games, agreeing to have Fox Broadcasting and its affiliates share 11 contests with the NFL Network cable platform for $550 million a season. 

And last month, of course, Fox agreed to sell its film and TV production studios, most of its regional sports networks, as well as cable networks FX, FXX and National Geographic, to The Walt Disney Company for $66.1 billion. 

Pending regulatory approval, that leaves 21st Century Fox with Fox Broadcasting and its owned and operated stations, as well as national cable sports networks Fox Sports 1 & 2, and the Big Ten Network. Also remaining in the fold are Fox Business and Fox News Channel.

Of course, pundits did hem and haw about Fox paying $3.3 billion for the next five years for an NFL platform that has seen marked viewer erosion on Thursday nights. But the NFL remains one of the few assets that can draw a significant live audience, in a familiar paradox: Everything around the NFL is eroding, too, rendering it increasingly valuable despite ratings declines, not less. 

“In general, as the scarcity value of large audiences coming together around national events continues to rise, we really want Fox to be the home of that kind of compelling product,” Fox CEO James Murdoch added.