Rupert Murdoch: decision to withdraw Time Warner offer is ‘resolute’
Rupert Murdoch, making a rare appearance on 21st Century Fox's quarterly earnings call Wednesday afternoon, said the move to withdraw its offer to merge with Time Warner was not a gimmick.
"This is our resolute decision, which is why we formally withdrew our acquisition offer," Murdoch said, citing Time Warner's decision not to negotiate, the response from Fox's board of directors, along with Fox's stock price, which Murdoch said is "severely undervalued.”
Fox C.O.O. Chase Carey was even more blunt.
"Let me be clear, we are done," Carey said. "This initiative was one of opportunity, not necessity or defensive concerns.
"We have no plans to pursue any other third party content company as an alternative to Time Warner," Carey added.
Murdoch, seconding Carey, said that Fox would not be pursuing any other big deals, though he left the door open for smaller, more strategic opportunities.
"We have no plans to go out into the acquisition trail," Murdoch said. "We build ourselves. look at our best businesses, we started them ourselves, and we are very happy with that."
Nonetheless, Carey was happy to give a postmortem on the deal that never happened. Carey said that while Fox had scale, Time Warner would have amplified it in a way few other companies could.
"I think we have been clear that scale does matter, I think we have enough scale… but there were opportunities to further emphasize that," Carey said.
The future of the TV business is intrinsically tied to the future of digital media, and Carey said that the combined company would have had strategic advantages Reading between the lines, it sounds like Carey was referring to HBO.
"The breadth of what we would have had would have provided an opportunity to create those next generations of experiences," he said. "These digital platforms will be a tremendously important part of our future, particularly the mobile ones. In an array of ways, we will exploit it."
Carey was also asked about the slow growth at the Fox broadcast network and at Fox Sports 1, which has high costs due to sports rights, but isn;t yet profitable. Carey says FS1 is where the company expected it to be, and noted that the carriage agreements give it a sense of financial stability. Murdoch, who earlier noted that Fox's most successful channels are the ones they built themselves, jumped in.
"It took seven years for Fox News to turn a profit, and today it is making well over a billion dollars a year."