Rupert Murdoch's 21st Century Fox (FOXA) is a sprawling, global empire that encompasses, movies, networks and sports in addition to cable-TV systems throughout Europe and India. Yet, sheer size doesn't guarantee success, and it may seem that the bigger the company, the bigger its challenges.
For the year to date, Fox shares, at around $28, are down nearly 28% as the Fox broadcast network suffered a decline in advertising revenue amid lower ratings. CEO James Murdoch has pledged to improve operations at the network as the company seeks to grow its international cable-TV operations, most notably in India.
"Star (India) is one of the more important growth factors along with domestic affiliate fee growth," Brian Wieser, a media analyst at Pivotal Research, said in a phone interview. "Perhaps an improvement at their core broadcast network as well, but in each case this will be based on groundwork already well in place. A favorable turnaround in currencies will help, too, although that's out of their hands."
Fox has beaten long odds throughout its successful history. Over the years the company has made a reputation by challenging entrenched media networks. But while Fox News Channel leads Time Warner's (TWX) CNN in total viewers, Fox Business has yet to beat Comcast's (CMCSA) CNBC. Fox Sports1, meanwhile, may not have anywhere near the viewership of Disney's (DIS) ESPN, but its go-slow approach to sports rights contracts has the network in an enviable position.
With business booming at the Fox News Channel, the highest-rated cable news operation for many years, the parent made a dramatic move. Two years ago, 21st Century was created when the original News Corp. spun off Dow Jones, the New York Post and its other media operations.
"After the spinoff of its publishing businesses, our risk assessment reflects a vast portfolio of leading entertainment brands that offers an enhanced business mix and geographic diversification, and a continued strong balance sheet with ample financial flexibility," Standard & Poor's noted.
Today, the media industry remains as competitive as ever -- perhaps more so. Media and tech companies have become fierce rivals, with such forces as Apple (AAPL) and Netflix (NFLX) flexing their media-minded muscles. Plus, new companies can't be overlooked.