Fox Corporation owns Fox News. Fox Corporation is controlled and owned primarily by the Murdoch family. That is a global video brand comprising FOX News Media, FOX Sports, FOX Entertainment, and FOX Television Stations, and the leading AVOD service TUB, owned by the Murdoch family, which retains most of the controlling power. On June 2018, 21st Century Fox accepted Disney’s acquisition of its assets for $71.3 billion to acquire its film studio and TV assets.
What is 21st Century Fox?
As explained in 21st Century Fox, the holding company of Fox, before part of the business was sold, in its annual report:
Twenty-First Century Fox, Inc. (formerly known as News Corporation), a Delaware corporation, is a diversified global media and entertainment company with operations in the following segments:
(i) Cable Network Programming; FOX News and Fox Business Network. FOX News owns and operates the FOX News Channel, FSN. Fox Sports Net, Inc. (“FSN, Inc.”) is the largest regional sports network (“RSN”) programmer in the United States, FS1. FS1 is a multi-sport national video programming network, FS2. FS2 is a multi-sport national video programming network featuring live events from UFC and NASCAR, Big Ten Network, National Geographic Partners (The National Geographic Channels,
(ii) Television;
- Fox Television Stations, LLC (“Fox Television Stations”) owns and operates 28 full power stations, including stations located in nine of the top ten largest designated market areas (“DMAs”). Fox Television Stations owns and operates duopolies in 11 DMAs, including the three largest DMAs, New York, Los Angeles, and Chicago.
Apparently, Fox Television Stations can reach up to 37.3% of US households.
- MyNetworkTV The programming distribution service, Master Distribution Service, Inc. (branded as MyNetworkTV), distributes two hours per night, Monday through Friday, of off-network programming from Twentieth Television and other third party syndicators to its licensee stations. As of June 30, 2017, MyNetworkTV had license and delivery agreements covering 191 stations, including 10 stations owned and operated by the Company, reaching approximately 98% of U.S. households.
(iii) Filmed Entertainment; Motion Picture Production and Distribution One of the world’s largest producers and distributors of motion pictures, Twentieth Century Fox Film (“TCFF”) produces, acquires and distributes motion pictures throughout the world under a variety of arrangements.
And (iv) Other, Corporate and Eliminations.
The Other, Corporate and Eliminations segment consists primarily of corporate overhead and eliminations.
Century 21st equity interests
Century 21st also holds equity interest in:
Sky: The Company holds an approximate 39% interest in Sky. Sky’s ordinary shares are listed on the London Stock Exchange under the symbol “SKY”. Sky is the UK’s leading entertainment and communications provider, operating the most comprehensive multichannel, multi-platform pay television service in the UK, Ireland, Germany, Austria and Italy.
Hulu: The Company has an approximate 30% equity interest in Hulu, LLC (“Hulu”) which operates subscription-based services that offer: (i) both linear and on-demand video programming and (ii) on-demand only video programming
Endemol Shine Group: The Company and funds managed by Apollo Global Management, LLC (“Apollo”) formed a joint venture in December 2014 to which the Company contributed its interests in Shine Group and cash, comprising an aggregate carrying value of approximately $830 million. The Company and Apollo have an equal ownership interest in the joint venture. Endemol Shine Group, a global multi-platform content provider, has creative operations across all the world’s major markets, with a diverse portfolio, both scripted and non-scripted, coupled with digital, gaming, and distribution operations.
Tata Sky: The Company holds an approximate 20% direct interest and an approximate 10% indirect economic interest in Tata Sky Limited which owns and operates a DTH platform in India.
Century 21st revenue breakdown
– The Company’s revenues increased 4% for fiscal 2017, as compared to fiscal 2016, primarily due to higher affiliate fee, advertising and other revenues partially offset by lower content revenue. The increase in affiliate fee revenue was primarily attributable to higher average rates per subscriber at the domestic channels. The increase in advertising revenue was primarily due to the broadcast of Super Bowl LI in February 2017, higher ratings and pricing at Fox News Channel (“Fox News”) and the broadcast of the Major League Baseball (“MLB”) World Series, which benefited from higher ratings and two additional games. Partially offsetting these increases in advertising revenue were lower entertainment advertising revenue at both FOX and the Company’s television stations due to lower entertainment ratings at FOX as compared to fiscal 2016, which included the final season of American Idol. The increase in other revenues was primarily due to the acquisition of the publishing, travel and certain other businesses (the “NGS Media Business”) in November 2015 from the National Geographic Society (See Note 3 – Acquisitions, Disposals and Other Transactions to the accompanying Consolidated Financial Statements of Twenty-First Century Fox under the heading “National Geographic Partners”). The decrease in content revenue was primarily attributable to lower worldwide theatrical and home entertainment revenues from motion pictures partially offset by higher subscription video-on-demand (“SVOD”) and network and syndication revenues. The 4% revenue increase is net of a decrease of approximately $220 million due to the strengthening of the U.S. dollar against local currencies for fiscal 2017, as compared to fiscal 2016.
Who used to own Century 21st Fox before Disney’s acquisition?
According to the proxy statement dated November 15th, 2017:
The Murdoch family via their trust and Rupert Murdoch had most of the voting power.
We can also look at the compensation for the top management:
The total compensations comprise a base salary, stock awards, and non-equity incentive plans. In 2017, Rupert Murdoch earned more than $29 million.
The Fox Corporation spin-off
From the Disney acquisition of 21st Century Fox, Disney took over various assets, including Hulu and other assets.
After selling a few of its core assets to Disney, the Murdoch family, in a bidding war between Disney and Comcast (to win over assets such as Sky) has reorganized its core TV networks, moving around Fox into the newly formed Fox Corporation.
Of which now they own the majority (42.3%).
Today Fox Corporation is a $7.6 billion company, of which most revenues come from Advertising and Affiliate fees.
Origin Story
Fox News is an American news and political commentary television channel and website. Fox News Channel, abbreviated FNC, was launched by Australian-American mogul Rupert Murdoch in 1996 to attract conservative audiences.
Let’s take a look at how Fox News came to be below.
The early years
The story of Fox News started in March 1984 after Murdoch, a press tycoon, purchased a 50% interest in Twentieth Century Fox for $250 million from real estate magnate Marvin Davis. As part of the deal, Murdoch also acquired a half interest in Fox Studios.
While the company’s financial performance had been lackluster over the previous years, Murdoch had always wanted to own a Hollywood studio and told The New York Times that he regretted missing out on a chance to purchase Fox in 1981.
In his book The Man Who Owns the News: Inside the Secret World of Rupert Murdoch, author Michael Wolff noted that Murdoch’s interest in a Hollywood producer had little to do with Hollywood itself:
“Indeed, when he buys Twentieth Century Fox, there are few people who have ever come to Hollywood less enamored with the place, less temperamentally suited to it than Rupert Murdoch… He’s not here for glamour but for cash flow.”
Impetus
While Murdoch had no interest in movies or show business, he was a shrewd operator with lofty aspirations in the American media industry. He was also a consummate networker and, in Wolff’s words, was “interested in efficiently knowing who he needs to know.”
One of these individuals was John Kluge, owner of the largest collection of independent television stations in the United States. Murdoch purchased the stations from Kluge’s company Metromedia Inc. in March 1985.
With a price tag of $2 billion, the deal saw the stations sold at double the rate of comparable purchases of the time and was the second-largest in the history of television. However, it should be noted that the stations were broadcast across ten of the most lucrative markets in the USA.
Both the Fox and Metromedia deal enabled Murdoch to transition from a newspaper publisher to the first multimedia mogul with interests in print, movies, and television.
Launch
The Fox television network debuted in 1986, but it would not be until 1992 that Murdoch decided he needed a dedicated news channel. Until that point, Fox-owned local stations broadcast news from CNN after Murdoch made a deal with Ted Turner.
Three years later, in 1995, Murdoch flew British executive and reporter Andrew Neil to New York to help him guide the creation of Fox News. The pair initially wanted the channel to run as a 60-minute show after the popular Sunday NFL match, with the creation of a television empire built around sports a strategy Murdoch had used to great effect in Australia.
Former Republican consultant Roger Ailes was then brought on board to oversee the new network. Ultimately, Ailes’ political bent and business acumen were key drivers of Fox News’s eventual success.
Fox News Channel premiered on October 7, 1996, and billed itself as a fair and balanced alternative to the prevailing liberal media environment. Content featured rolling news coverage interspersed with 20-minute topical shows such as Fox on Politics and Fox on Crime.
While it was routine for cable companies to pay TV networks to broadcast their content, Murdoch flipped the script and paid cable companies to broadcast Fox News. This meant that when the channel was launched, it was available in over 17 million homes.
Growth
Fox News saw an immense 440% increase in viewers during the 2000 Presidential Election won by Republican candidate George W. Bush. Further growth ensued after Bush earned a second term four years later.
More recently, in January 2023, Fox News Channel became the number-one-rated cable news service for the twenty-third month in a row.
The channel’s prime-time audience of 1.945 million was nearly double that of MSNBC and more than triple CNN’s audience of just 629,000.
Fox News Settlement and the Departure of Tucker Carlson
As reported by Reuters:
- Fox News Media and its top-rated host Tucker Carlson have agreed to separate.
- The separation comes after Fox Corp settled a $787.5 million defamation lawsuit involving Carlson and Dominion Voting Systems.
- Dominion alleged that Carlson aired debunked election-fraud claims about the company on his show.
- Carlson’s show, “Tucker Carlson Tonight,” was the highest-rated cable news program in the key 25-to-54 age demographic.
- Fox News faces additional legal battles, including a lawsuit by Abby Grossberg, Carlson’s former head of booking, who accused Fox of coercing her testimony in the Dominion case and exposing her to sexism and misogyny.
- Fox News thanked Carlson for his service but did not provide a reason for his departure.
- Advertisers have left Carlson’s show due to controversy.
Key takeaways
- Fox News is an American news and political commentary television channel and website. Fox News Channel, abbreviated FNC, was launched by Australian-American mogul Rupert Murdoch in 1996 to attract conservative audiences.
- While Murdoch had no interest in movies or show business, he was a shrewd operator and networker with lofty aspirations in the American media industry. His love of the deal also saw him buy half of Twentieth Century Fox and six independent TV stations to establish his media empire.
- Fox News Channel premiered on October 7, 1996, and billed itself as a fair and balanced alternative to the prevailing liberal media environment. Somewhat unusually, Murdoch paid cable companies to broadcast Fox News which meant that it was available in over 17 million homes after its launch.
Key Highlights
- Ownership and Structure:
- Fox Corporation owns Fox News and is primarily controlled by the Murdoch family.
- The Murdoch family retains most of the controlling power in Fox Corporation.
- The company comprises various segments, including Cable Network Programming, Television, Filmed Entertainment, and Others.
- Segments of Fox Corporation:
- Cable Network Programming includes entities like FOX News, FOX Sports, and National Geographic Partners.
- Television includes Fox Television Stations, which owns and operates numerous stations.
- Filmed Entertainment includes Twentieth Century Fox Film, a major producer and distributor of motion pictures.
- Others comprise corporate overhead and eliminations.
- Equity Interests:
- Fox Corporation holds equity interests in companies like Sky, Hulu, Endemol Shine Group, and Tata Sky.
- Revenue Breakdown and Financials:
- The company’s revenues increased 4% in fiscal 2017 due to higher affiliate fees, advertising, and other revenues.
- Affiliate fee revenue increased primarily due to higher average rates per subscriber at domestic channels.
- Advertising revenue benefited from the broadcast of major events like Super Bowl LI and MLB World Series.
- Content revenue saw a decrease, primarily from lower theatrical and home entertainment revenues.
- 21st Century Fox’s Previous Ownership:
- Before Disney’s acquisition, the Murdoch family, via their trust and Rupert Murdoch, had most of the voting power.
- Fox Corporation Spin-Off:
- After selling core assets to Disney, the Murdoch family reorganized their TV networks, forming Fox Corporation.
- The Murdoch family owns the majority (42.3%) of Fox Corporation.
- Origin and Launch of Fox News:
- Fox News was launched in 1996 by Rupert Murdoch to attract conservative audiences.
- Murdoch’s interest in the American media industry led to his acquisition of TV stations and the creation of Fox News.
- Fox News Growth and Success:
- Fox News saw significant growth, especially during the 2000 and 2004 Presidential Elections.
- The channel achieved high viewership ratings and gained popularity as an alternative to liberal media.
- Recent Developments – Tucker Carlson and Legal Issues:
- Fox News and host Tucker Carlson agreed to separate following a $787.5 million defamation lawsuit settlement involving Carlson and Dominion Voting Systems.
- The departure of Tucker Carlson followed controversy and legal battles, including a lawsuit by a former head of booking against Fox News.
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