News Corporation | Principles & Practices

http://logok.org/news-corporation/

http://www.newscorp.com | @NWScorp | 1211 Avenue of the Americas New York, NY 10036 | (212) 852-7000

A Brief History

News Corporation was formed in 1979 when Rupert Murdoch needed a holding company for News Limited. News Limited began as a small Australian newspaper founded by the Murdoch family in 1923. Rupert Murdoch helped turn that small paper into one of the largest media conglomerates the world has ever seen. News Corporation has holdings in print, television, film, and web. They own everything from the Wall Street Journal to 20^th Century Fox. Even after being hit by an international phone hacking scandal, it seems like nothing can slow down this media empire.

News Corporation is perhaps best known for their work on the small screen. They are behind such classic shows as The Simpsons, American Idol, Family Guy, Glee, and everything else under the Fox umbrella. The juggernaut behind one of the most successful networks in the world still has the drive to grow and prosper. Their effort, combined with that of NBC Universal and Disney saw the creation of Hulu.com, an ad-supported television streaming site. There is also a lot of speculation that the Murdoch Empire plans to add the LA Times to their collection.

Board of Directors

Rupert Murdoch – Chairman and Chief Executive Officer, News Corporation

Jose Maria Aznar – President, Foundation for Social Studies and Analysis, Former President of Spain

Chase Carey – President and Chief Operating Officer, News Corporation

Natalie Bancroft – Director, News Corporation

Peter L. Barnes – Chairman, Metcash Limited

News Corp continues to invest in cable TV while other content providers worry about the long term security of the revenue stream. It was announced in late March 2013 that the channel FX would be getting a sister channel named FXX [1]. FXX will be targeting the coveted 18-34 demographic. In order to reach this younger audience, content will be transplanted from FX to FXX. Shows like It’s Always Sunny in Philadelphia will be moved to FXX once the channel launches on Sept. 2^nd [2]. Because the channel will be launching with a potential audience of 70 million homes, News Corp is hoping that such a large potential audience will bring in lots of ad money [2].

New logo for FXX channel

[I CANNOT EMBED MY VIDEO SO HERE IS THE LINK]

Always Sunny – FXX Promo – https://www.youtube.com/watch?v=kPGvs9ewFiE

FXX isn’t the only new channel that News Corp will be launching. They will also be launching a new sports channel, dubbed Fox Sports 1 [1]. Launching the new channel won’t be as expensive for News Corp as it would seem. What the company is essentially doing is rebranding their existing Speed Channel into a seemingly different channel [1]. Because they already own the rights to NASCAR, the NFL, MLB, and more than twenty local sports channels, finding content for the new channel won’t be a difficult task [1].

Although it sounds like News Corp is just shifting around their existing content, the stock market is expected to respond positively [3]. It might take a few years for Fox Sports 1 to gain an audience, but investors see a lot of potential in the new channel. Matthew Harrigan, a Wunderlich Securities analyst, raised his price target to $36, a $4 jump [3]. Although they don’t expect to be able to compete with ESPN, that might not be the case for competitor NBC Sports. President and COO Chase Carey told investors that the channel should see a loss for the first few years in order to give it the financial boost it needs. He urged “not to try to beat ESPN”, stating that financial success of the network would come in time [6].

The company is doing very well financially. According to the second quarter earnings released for 2013, News Corp reported earnings of $1.58 billion, up from $1.5 billion a year ago [4]. Their current stock price sits at $31.57 a share [5].

Current stock listing for News Corp

Despite their financial success, News Corp is worried. Every TV network has been closely watching the Aereo court cases. After Aereo won the first two court cases again them, the content producers started to get upset. Producing content becomes a lot less profitable when your content can be streamed online without any compensation. President and COO of News Corp Chase Carey might end up changing the way his network runs if this trend continues. On April 8^th at the National Association of Broadcasters in Las Vegas, Mr. Carey claimed that if Aereo came out on top in court, he would take Fox off the air in favor of a subscription-based service [7]. Although doubtful that Carey could pull Fox off the air, it’s too early to predict what will happen next.

Disney and News Corp. are trying to figure out what to do with Hulu. On April 7^th, 2013 a bid was placed on the popular video streaming site [9]. The $500m offer came from Peter Chernin, the former president of News Corp [9]. It is not yet known if the offer will be accepted or not. Earlier reports indicated that even if somebody were to buy Hulu.com, they wouldn’t necessarily be buying the content that goes with it. After spending millions of the website, the new owner would still have to go through discussions with Disney, News Corp, and NBC regarding the cost to stream their content on the web [8].

Although News Corp is doing well, so are their competitors. The Walt Disney Company is currently listed at $58.82 on the NASDAQ [10]. Comcast, now the parent company of NBC Universal, is listed at $41.63 a share [11]. The competition will only increase, but News Corporation has what it takes to compete.

[1] News Corp continues to invest in TV; creates FXX, Fox Sports 1

http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-cbs-news-corp-bet-on-cable-20130329,0,4037460.story

[2] News Corp’s FXX launch date, intended audience

http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-fx-fxx-20130327,0,5837402.story

[3] How the markets are likely to respond to new sports network

http://www.hollywoodreporter.com/news/analysts-boost-news-corp-target-426258

[4] News Corp Q2 2013 report

http://www.newscorp.com/investor/download/NWS_Q2_2013.pdf

[5] News Corp NASDAQ stock price index

http://investor.newscorp.com/stockquote.cfm

[6] COO and president on initial Fox Sports 1 years

http://www.hollywoodreporter.com/news/fox-sports-network-espn-new-426046