Neither James nor Lachlan Murdoch — CEO and executive co-chairman of 21st Century Fox, respectively — addressed the large elephant on the company’s first-quarter earnings call Wednesday, which was “will the company sell a significant portion of its media assets to Disney?”
“We’ve really simplified our operating model to a great set of brands and assets we really like,” CEO James Murdoch said. “We see a real trajectory of good performance.”
Lachlan Murdoch added: “Historically, we have always been asset builders. We will continue to do so.”
CNBC’s David Faber on Monday broke the story that the two companies had held talks about The Walt Disney Co. acquiring much of 21st Century Fox, including the TV studio and cable networks FX and National Geographic. According to reports, Fox planned to hold on to Fox Broadcasting Co., and the company’s news and sports assets.
Analysts have said that what might be motivating Fox to discuss that sale is the need to increase scale in order to compete with the likes of deep-pocketed competitors such as Netflix, Facebook, Amazon and Apple.
However, on Wednesday Lachlan Murdoch asserted that Fox does have the “required scale to continue to execute on our growth strategy and deliver increased returns to shareholders.”
The Murdoch brothers also addressed another issue, which is 21st Century Fox’s pending acquisition of the 61 percent of Sky Broadcasting that it doesn’t currently own. British regulators have been looking closely at the deal, and it’s closure doesn’t appear to be guaranteed. James Murdoch assured investors that the deal would close by June 2018.
On Wednesday, the BBC and other outlets reported that Sky executives have told Britain’s Competition and Markets Authority it “would likely be prompted to review” its position if “the continued provision of Sky News in its current form unduly impeded merger and/or other corporate opportunities available in relation to Sky’s broader business.” In other words, Sky would stop broadcasting news if executives felt its existence would threaten the deal.
Overall, 21st Century Fox satisfied Wall Street’s expectations, with revenue up 8 percent for the quarter to $7 billion while operating income was flat compared to year-ago at $1.79 billion.
READ MORE: Variety
[Image courtesy of Marketplace/Getty Images]
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