Murdoch’s Disney deal is a boon for Fox News

As Rupert Murdoch unloads $52.4 billion worth of assets to Disney, one thing is clear: he is doubling down on Fox News.

Thursday’s blockbuster deal, in fact, may even provide an opportunity for the conservative cable news network to expand its impact.

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For the most part, Murdoch has kept Fox News’ brand separate from that of his local stations and the national Fox broadcast network. But as the Australian-born mogul strips away his entertainment properties to create what he called “the new Fox” – essentially, Fox News, Fox Business Network, the national Fox sports networks, his broadcast network and local stations — several analysts suggested that the deal may provide more opportunities for Fox News to extend its footprint into the broadcast realm. The new Fox could look to acquire other local stations, as well, analysts say.

“From a Fox News perspective, it’s a positive,” said Daniel Ives, the chief strategy officer and head of technology research at GBH Insights. He said that the network, along with Murdoch’s other remaining assets, will now benefit from his “laser focus.”

“The focus of the company now is on the remaining assets,” Ives said, “with [Fox News] being the crown jewel.”

Spokespeople from 21st Century Fox and Fox News declined to comment on the Disney deal’s effect on the network.

As part of the deal, Murdoch parted with the 20th Century Fox television and movie studio, leading to an unusual situation: the new Fox company still owns a national broadcast television network and 28 local stations, but no longer has a studio to produce shows for them. If the deal with Disney, which also included assets like the FX Network and National Geographic, means that Fox is moving away from entertainment content and toward news and sports, Ives said that it follows that news content could get more prominent play on Fox’s broadcast network.

Brian Wieser, a senior analyst for communications and technology at Argus Research, agreed. “I suspect that the remainder of Fox will end up owning more local broadcast stations, which will lean more on news, especially including Fox News but also possibly News Corp,” he said in an email.

Wieser also thought Murdoch would look to acquire more local networks. “Fox News can serve as a newsgathering organization at a national level for a broader range of TV stations if Fox owned more outright,” he said.

In a conference call Thursday with Wall Street analysts, Murdoch struck a defiant tone, describing a company with renewed focus on news and sports.

“Those of you who know me know I am a newsman with a competitive spirit . . . ” he said. “Are we retreating? Absolutely not! We are pivoting at a pivotal moment.”

In the conference call, Murdoch said that the new Fox would not be totally withdrawing from the scripted and reality shows that currently fill the Fox lineup. The company could still partner with other studios, he said.

“We can make our own programs [or buy programs] from 20th,” he said. “As the networks make more and more of their own programs, people like Warner Bros. and Sony will be looking to us to buy programs. We’re in a strong position for getting all the programs we need.”

But Paul Hardart, a marketing professor at New York University’s Entertainment, Media and Technology program in its Stern School of Business, said that he expected Fox to have “less entertainment content in the near term.” Sports and news have been the main pillars holding up cable and broadcast television, he said, as the two types of programming viewers typically watch live and can’t fast-forward through commercials on. Murdoch, he said, is “playing to his strengths.”

“He’s getting a lot of money to continue to double down on sports and news,” Hardart said. “I would think you’d start to see a lot more connection between these [remaining] networks…I don’t think they’re that connected right now.”

Hardart said he didn’t think that high-profile Fox News primetime shows like Hannity would suddenly be invading the Fox broadcast lineup, but one possibility, he said, was more interactions between local news shows and the national Fox News and Fox Sports brands.

With reports out that Murdoch’s son, James, could be jumping to Disney as part of the deal, he also noted the added bonus of solving problems around family succession.

The deal happened at the same time that local television station giant Sinclair is in the process of acquiring Tribune Broadcasting, a deal which would give the company access to 72 percent of TV households in America. Rumors have swirled that Sinclair has designs on amping up its news programming, and the company has had to deny reports that it was courting disgraced former Fox News host Bill O’Reilly.

One potential downside, said Joseph Bonner, a senior analyst for communications and technology at Argus Research, is that the loss of other cable networks like FX may give the new Fox less leverage in negotiating carriage fees with cable providers. Fox News remains one of the most in demand cable networks, though, and on the investor call, Murdoch did not seem too concerned over the issue.

“Fox News,” he said, “is something that no one can afford to drop.”