James and Lachlan Murdoch, speaking on 21st Century Fox’s Q1 2018 Earnings Call, have played down the notion that they were seeking to sell parts of their business to Disney, suggesting instead that Fox had the required scale, with completion of its planned acquisition of Sky likely in 2018.
Lachlan Murdoch, co-executive chairman of 21st Century Fox, started the call by saying: “Let me be very clear upfront that we have a longstanding policy of not commenting around corporate activity or transactions. We will not be responding at all to questions or comments about recent press speculation.” James Murdoch, chief executive, echoed his brother.
“We have always been asset builders,” averred Lachlan Murdoch. “We operate these businesses to build them and to grow, and we will continue to do that.”
James Murdoch emphasised the company’s work to gain regulatory approval in Britain for its acquisition of Sky. “We’re pretty confident it gets done,” he said, suggesting the deal could be done by the middle of 2018.
Lachlan Murdoch also addressed the company’s size and ability to compete with giants such Comcast and AT&T. “There is a lot of talk about the growing importance of scale in the media industry. Let me be very clear. Fox has the required scale to continue to both execute on our growth strategy and deliver returns to our shareholders,” he declared.
21st Century Fox reported mixed earnings, as strong cable results were offset by weaker returns in broadcast television and film. For its fiscal first quarter, Fox had net income of $855 million (€737m), compared with $821 million, or 44 cents a share, a year earlier. The stock remained flat in after-hours trading.
21st Century Fox’s broadcast assets, including the Fox network and 28 local television stations, had operating income of $122 million, a 36 per cent decrease compared with a year earlier. Higher sports programming costs and lower political-related advertising were the primary reasons for the decline.