Murdoch Comments on Univision

Feb 8, 2006  •  Post A Comment

News Corp. Chairman Rupert Murdoch said Wednesday that while his company might take a look at the assets of Univision Communications, Wall Street’s speculation over the company’s price likely means Mr. Murdoch won’t go after the Spanish-language broadcaster.

Mr. Murdoch told investors during a discussion about the company’s fiscal second-quarter earnings that News Corp. will be looking at Univision. But he said later in the call that News Corp. doesn’t “have any specific intentions for it at all,” adding that when it comes to some of the price tags circulating in the market, “We have no intentions.”

News Corp. has been mentioned by several Wall Street analysts as one of a handful of big media companies likely to bid for Univision, which announced Wednesday that it was exploring strategic alternatives, including a possible sale. Others mentioned include CBS Corp. and Time Warner.

Separately, News Corp. President and Chief Operating Officer Peter Chernin said the company was in the process of “planning and investigating all of the options” available to fill the airtime of its nine television stations that are currently affiliates of UPN, which along with The WB Network go dark this summer to make way for a new network, The CW Television Network.

Mr. Chernin said it would likely be several weeks before News Corp. makes a decision about how to proceed, but among the options being considered includes using content from its own television production operation, as well as perhaps serving as a supplier to television stations that find themselves without a network affiliation.”

“We actually believe this is a positive for the entire market,” Mr. Chernin told analysts. “Ratings will be freed up for younger demos, which we believe Fox will be the main beneficiary. Ad dollars will be freed up, which we hope to exploit. It will be better for the syndication market and the talent market.”

Also Wednesday, News Corp. reported a 178 percent surge in fiscal second-quarter profit to nearly $1.1 billion, compared with a year-earlier profit of $386 million, driven by gains from equity investments in companies such as DirecTV Group and its British counterpart, BSkyB. Revenue during the quarter was up 2 percent to $6.7 billion.

At the company’s television operation, operating income surged 20 percent to $183 million, driven in part by higher contributions from Fox Broadcasting, which helped to offset a decline in operating income at Fox Television Stations. The stations group was impacted by higher costs associated with newscasts and promotion for the November sweeps period as well as by a decline in traditional and political advertising.

Cable, meanwhile, continued to serve as a growth engine for the company, posting a 15 percent increase in operating income to $262 million, fueled by advertising and affiliate fee growth at Fox News Channel, which is now available in 88 million homes. FX likewise posted strong gains, thanks to advertising and affiliate-fee and subscriber growth.

In other news, Mr. Murdoch confirmed what he told Newsweek recently about his plans to launch a business channel to take on NBC Universal’s CNBC. He said News Corp. “continues to negotiate with major cable companies,” and added that he was confident the channel would garner enough subscribers to be launched later this year.”