Murdochs Defend $3 Billion Thursday Night Football Price Tag

(Bloomberg) -- The Fox network will get unparalleled promotional power by airing NFL games two days a week, Rupert Murdoch’s sons said Thursday, providing a rationale for a deal that’s been panned by investors.

Analysts pressed James and Lachlan Murdoch on 21st Century Fox Inc.’s quarterly conference call Thursday about their company’s decision to pay more than $3 billion for five years of “Thursday Night Football.” The network, where profit dropped 85 percent last quarter amid a ratings slump, already airs National Football League games on Sundays.

Ratings for the NFL dropped 9.7 percent last season, and the networks that previously held the rights to “Thursday Night Football,” CBS and NBC, weren’t as enthusiastic about the games as Fox was in the latest bidding round. But the NFL remains one of the top draws on television, and Fox will use Sunday games to encourage football fans to watch on Thursdays, too, the Murdochs said.

“Live sport has never been more important than it is today,” Lachlan Murdoch said. “NFL programming is hands-down the most powerful in all of media.”

Lachlan Murdoch, who shares executive chairman duties with his father, is expected to take over as chief executive of the remaining Fox businesses, including the broadcast network, after the company completes a deal to sell $52.4 billion in media assets to Walt Disney Co. next year.

The price tag for the Thursday night games sent Fox shares tumbling last week. But the extra night of football would create a “powerful platform” to promote other nights and programs, and taps into the “scarcity value of large audiences coming together,” James Murdoch said.

Fox’s fiscal second-quarter revenue and earnings beat analysts’ estimates, but a drop in political spending, higher college football costs and lower audience ratings hurt results at the Fox broadcast network. Broadcasting will account for more than half of the “new” Fox’s revenue, once it has sold assets including the 20th Century Fox film and TV studio, the cable channel FX and other assets to Disney.

To contact the reporter on this story: Anousha Sakoui in Los Angeles at asakoui@bloomberg.net.

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum

©2018 Bloomberg L.P.