Fox Corp. Will Pursue M&A Deals, CEO Lachlan Murdoch Says

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As a seasoned gamer with decades of experience under my belt, I can’t help but feel a surge of excitement at the prospect of Fox Corp. venturing into M&A. The strategic focus on news, sports, and live content is music to my ears, especially considering their commitment to simplifying the convoluted sports rights environment in the US.

Fox Corp. is ready to deal.

At a Goldman Sachs gathering on Tuesday, Lachlan Murdoch, CEO of Fox, detailed their approach in sports, news, and entertainment sectors. He further hinted at the company’s readiness to negotiate certain agreements.

Regarding future prospects for his business, Murdoch expressed that the company’s primary focus will remain on news, sports, and real-time content. He emphasized that there are no plans to shift towards entertainment. However, he also mentioned that they aim to explore strategies for growth in various areas.

“We’ll also use our balance sheet, increasingly, for M&A as we go forward,” Murdoch said.

Fox boasts a minimal amount of debt and a substantial cash reserve, primarily due to its business model centered on the Fox broadcast channel and Fox News. Both entities consistently earn recurring income from pay-TV subscriptions and ad sales. Moreover, the company’s major ventures into streaming include Tubi, a free streaming platform, and Venu, a sports-oriented service that is currently in limbo due to an injunction.

I wholeheartedly agree with Murdoch’s perspective that Venu is indeed for the consumers, it caters to the sports enthusiast in all of us. Unlike traditional cable TV, it promises a unique experience.

It’s reasonably priced and does an excellent job simplifying the complexities or fixing issues within the sports rights landscape in the U.S.,” he went on to say, pointing out that now to watch every NFL game, you not only need a pay-TV subscription but also numerous streaming services. “Just as you paid $64 for those games three years ago, you now have to pay $114 and, effectively, manage five different devices or subscriptions. That’s absurd.

As a devoted admirer, I’d like to share a perspective: I believe it wasn’t Venu’s intention to put the conventional pay-TV industry at risk, but rather coexist harmoniously with it. In fact, if a pay-TV subscriber were to choose Venu over cable, our company might find itself in a disadvantageous position.

If a cable subscriber switches to Venu, we stand to lose money from that deal, as they no longer pay for Fox News, which is included in Venu’s package. However, Murdoch emphasizes that we don’t want to simply replace cable customers with those who switch to Venu. Instead, our focus should be on targeting cord-cutters who have already dropped their cable or were never subscribed in the first place.

Murdoch explained his stance on rights by mentioning that his company chose not to participate in the NBA competition, and more recently, they stopped working with WWE. He also shared an instance where a deal didn’t materialize: “Intelligent bankers approached us, suggesting we could repurchase the regional sports networks at just half of what we originally sold them for [to Disney]. However, we made it a point to avoid such an opportunity as much as possible.

Furthermore, he emphasized that the corporation is firmly invested in the sports wagering industry, and they aim to seize the opportunity to purchase a substantial share of the betting company Flutter (the proprietor of FanDuel), before this right lapses in the year 2030.

Murdoch stated that they’ve initiated the necessary procedures with the state regulatory bodies. To fully capitalize on this opportunity, they require a gaming license, even with a 18.6% stake. Consequently, they’ve started the process to obtain the gaming license from the state regulators.

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2024-09-10 22:25