So Rupe and Lach might get the band back together, according to wholly not-surprising reports from Murdochland that Fox and News Corp., pulled asunder nearly a decade ago, may once again become one.
The news is rather amusing, coming just weeks after Rupert Murdoch finalized his personal de-merging with former model/Mrs. Mick Jerry Hall after a whirlwind courtship and six-year marriage.
With that little distraction behind him in time for the New Fall Season, Logan Roy, er, Rupert Murdoch is back in marrying mode, though of a corporate rather than personal sort. At this rate, the nastiest nonagenarian on the block might even make nice with his adult children, who stopped working for him.
And it certainly seems like the entire media universe is in a marrying mood.
A re-merger is working splendidly for the still-undersized Paramount Global since Shari Redstone finally quelled multiple boardroom rebellions and reasserted control. Amazon is figuring out what to do with MGM, its new toy, while Brian Roberts sure would like to make Comcast much bigger. Lions Gate keeps trying to do … something.
And of course, we have the just-hitched Warner Bros. Discovery, which laid off still more workers last week in its never-ending search for “corporate synergies” (perhaps not every marriage is meant for happiness, right, Rupert?).
Given the context, a Fox/News reunification is both amusing and unsurprising, especially when one recalls the reasoning behind the original disassembly. To put it mildly, that reasoning has not aged well.
You may recall, back in the late aughts and early teens, investors wanted Rupe to ditch all those slow-growing, less profitable parts of his then-very-big media empire. They weren’t interested in any media assets with a Gutenberg-era whiff, including newspapers such as the Wall Street Journal and loss-making bully pulpit New York Post, book publisher Harper Collins and a bunch of Australian publications.
Thus begat the new News Corp., designed to kludge along with slowly declining revenues until someone turned off the lights in the last printing press bay.
That left Fox investors with all the faster-growing, more lucrative assets in broadcasting, cable news and sports, movies, home entertainment, and games.
Cool ... except five years later, Murdoch sold much of Fox to Disney for an epic $71 billion.
What was left -- Fox Broadcasting, Fox News, Fox Sports, AVOD contender Tubi, the vestigial subscription streaming service Fox Nation -- has seemed more like a hobby to preoccupy a puttering old gaffer than an actual media empire. Certainly significant parts of What’s Left face grim prospects in the long term, given the flight of viewers to streaming services not owned by Fox.
Like just about every other public company, News Corp. and Fox have seen their stock prices plummet over the past year. Fox has drooped nearly 32% over the year. News Corp., never the racehorse, is down nearly 40%. Their combined market capitalization is a modest $25.8 billion, which doesn’t suggest that combining will make much difference to the market.
Oh, sure, Fox News continues to sweep its Sauron-like gaze across the land, extracting oodles of billions from the aggrieved bumpkins who delight in its culture wars ... when they’re not grumbling that Tucker Carlson and company don’t go as far as the real Republicans over at OAN, Infowars, etc.
That hugely profitable “News” hustle generates a reported 80% of Fox’s overall profits, and feeds the name-brand talents who also staff most of Fox Nation’s lifestyle shows.
True, making stuff up can also occasionally be expensive. Fox News and some of its “entertainment” personalities are facing a $1.65 billion defamation lawsuit from a voting machine company for their hijinks during and after the 2020 election. And late founder Roger Ailes left a lengthy trail of sexual misconduct settlements in his wake after shuffling out of the beast he built.
Fox’s sports and broadcasting units, meanwhile, have invested heavily in sports TV rights, grabbing pricey chunks of the NFL and Big Ten deals among much else. Such increasingly expensive rights are fast becoming the real sports betting industry. Media companies are gambling that the programming outlets will retain just enough audience to pay back what they’re spending before most viewers cut the cord irrevocably.
And that’s the real issue with the Murdochs’ latest financial gerrymandering idea.
A re-merger would generate the usual corporate synergies, mostly by laying off accounting, HR, marketing, communications and similar back-office duplicate gigs. That’s been going … not so great for Warner Bros. Discovery.
And getting a bit bigger would improve ad sales and audience targeting with more scale and engagement across cable, streaming, digital and other assets. That’s a hot trend these days as media companies focus on selling demographic slices across multiple properties rather than whoever turns up for a single show at 9 PM on Thursday.
But let’s be real. The only forward-facing assets Murdoch has left after his Disney deal are Tubi and Fox Nation. Tubi is one of the biggest ad-supported streaming services, and increasingly has integrated with other Fox assets such as The Masked Singer. But it otherwise features a lot of the same old stuff also found on most of its major competitors, hardly a recipe for engagement or brand loyalty.
With Fox Nation, we still don’t know how many people pay for the service, but its subscriber base is probably still no more than a few million subscribers, fed by a Fox News fan base that is both usefully ardent and dismayingly old. Compare that to the competition and it’s not even AMC Networks level in scale and demographic reach.
Meanwhile, all those assets Murdoch sold to Disney are a substantive part of the Mouse House’s prodigious progress in streaming. Where, for instance, would Disney-controlled Hulu be without all the great FX shows playing there ?(BTW, please watch Reservation Dogs and The Bear.) What would the Disney bundle look like with only lame ESPN Plus to justify an even higher price for Disney Plus?
More generally, Disney’s many entertainment units, now plumped up by ex-Fox operations, are commissioning even more scripted content than traditionally prolific Netflix, Ampere Analysis says.
That’s great for Disney as it locks down a must-have slot among the streaming services. Bob Chapek’s crew can thank not just Bob Iger’s many previous deals, but Rupert Murdoch’s desire to liquidate most of his supposedly fast-growing, next-generation empire.
At 91, it’s unlikely Rupert Murdoch will be able reassemble anything like what he shipped off to Disney. Far more likely, reattaching News Corp. to Fox will be the corporate equivalent of moving all the deck chairs to a single cruise ship as it plows ahead into iceberg-filled waters.
Here in the dying of the day, the old man is trying one last, lost financial machination so his company can continue to matter. In a cord-cutting era, increasingly few will notice.
Couldn’t happen to a nicer guy.
