Fox’s Lachlan Murdoch Slaps Back At CNN; Reinforces Value Of Sports To Linear

With Fox Corp. having paid $787.5 million to Dominion Voting Systems to settle a defamation lawsuit over the 2020 election, analyst Robert Fishman asked Fox Corp. Executive Chairman-CEO Lachlan Murdoch whether Fox News is going to do anything differently going forward during Wednesday’s MoffettNathanson Inaugural Technology, Media and Telecom Conference.

“We could be CNN, right?” was the initial response from Murdoch.

“Last week, and we can look at it factually, CNN had a town hall with the former president who made a lot of allegations about the 2020 election. And I haven’t seen a lawsuit yet—maybe there’s one coming, but I’m not going to hold my breath,” said Murdoch.

“If you believe it’s newsworthy to have a former president and also a candidate for the next presidential election — and if you believe that’s newsworthy in 2023, well certainly it was newsworthy in 2020 to report on similar allegations. So, what happened in the Dominion case, though, was we were denied our ability to rely on a First Amendment defense. And we were denied our ability to argue newsworthiness,” the CEO said.

Murdoch insisted that not settling the case would have meant a long legal battle, “which ultimately we would have won.” But it was better for the company and shareholders to settle the case without going to trial.

Murdoch is high on Tubi after pitching the ad-supported free-to-consumer streaming service in upfront meetings. And while Tubi was at the center of the upfront as a way to regain reach that’s eroding on entertainment television, he said Fox is not forcing a bundle on advertisers — and that Tubi is not cannibalizing the Fox Network

Murdoch was asked about his company’s strategy to keep all of its premium sports content, especially the NFL, exclusively on linear TV.

“Fox has a unique strategy, in that we are keeping our premium sports on our broadcast network, which means that it is exclusive to the broadcast and cable environment where our channels are transmitted. And we think that’s very important because it means that the traditional pay TV ecosystem is still what serves consumers best, serves the leagues best, with the most reach, and serves advertising clients. So we’re going to continue to do that,” the CEO said.

“Because that’s unique, as has been proven in our results, we believe we can push premium [ad] rates and premium retransmission revenue,” Murdoch said.

“Is that true also from a net retrans basis to the stations that are Fox affiliates when they go into their own negotiations?” Fishman asked.

“Yes,” Murdoch answered. But then he went into a description of how Fox’s O&Os pitch their premium value to cable/satellite operators as exclusive, must-have channels.

Returning to premium sports, Murdoch said he is open to conversations on various fronts. He indicated, though, that Fox would be unlikely to get involved in bidding for the NBA.

“As far as reach is concerned, broadcast is still the best place for sports,” he said.

“If I were an NFL owner or an NBA owner, a team owner, I’d want to be on broadcast. When we had Thursday Night Football years ago — a simulcast with The NFL Network and with Amazon — those games that were simulcast, well 95% of the viewing was on broadcast TV with our Fox — 5% was shared between Amazon and [NFL Network]. Then when we released it a year early and Amazon last year had it for the first year, Amazon’s reach was down 42%. By the way, that includes local market broadcast,” Murdoch recounted.

“If I were an NFL owner, that’s a disaster for me,” he said of the OTT approach.