News Corp. chief executive Rupert Murdoch told an investor conference Wednesday that his media giant is making healthy gains in its cable-network and international operations, but Fox-owned TV stations are forecast to experience a 15% drop in revenue for the current fiscal year.
Speaking at investment firm Goldman Sachs’ Communacopia XVII Conference, he said, “Local TV [advertising] in this country is bad. There’s no point trying to hide it.” He blamed a 40% drop in spending in the automotive category for TV stations.
The company, which owns Fox Broadcasting and 20th Century Fox, operates on a fiscal calendar ending June 30, so the current corporate year doesn’t catch the full impact of election-season advertising.
While the local ad economy is in the tank, Murdoch said broadcast-network advertising is holding up “incredibly” well, adding, “We’ve had almost no cancellations” of upfront ads. He said scatter prices advertisers pay now are higher than rates in the buoyant upfront market.
He also predicted that Fox would win its fifth straight primetime-ratings crown, saying that the now-settled Hollywood writers’ strike delayed scripted shows on rivals.
He also expects good team matchups in Major League Baseball’s World Series, which will be televised by Fox, and American Idol to again come on strong again. And he said Fox is advantaged by programming just 15 primetime hours while the “Big Three” program more.
As for basic-cable networks, Murdoch said the startup Big Ten Network college-sports joint venture lost $83 million in the prior fiscal year, but it will make a small profit in the current fiscal year after gaining wide carriage on cable systems. “That’s a turnaround this year,” he added.
Murdoch also predicted that the nascent Fox Business Network will emerge as a success in three years. “We’re very confident,” he added.
In terms of future investment, News Corp. will focus on new digital media and emerging international countries and avoid traditional U.S. media supported by consumer advertising. As for why, he noted that the home-page ad spot on MySpace -- which is owned by News Corp. and brokered by Google -- sells for $500,000-$1 million per day.