21st Century Fox executive chairman Lachlan Murdoch defended Fox News and gave a glimpse of the vision for New Fox during a wide-ranging Q&A on Thursday with Andrew Ross Sorkin at the New York Times’ DealBook conference.
Murdoch also weighed in on the fate of Megyn Kelly as she departs NBC News and the hiring of former White House communications director Hope Hicks to head corporate communications for the New Fox entity that will be created after 21st Century Fox sells most of its assets to Disney next year.
“Our biggest critics of Fox News are not watching Fox News,” Murdoch said, referring to the steady stream of outrage generated on social media by those who react to short clips of the cabler’s programming.
Sorkin, a Times’ veteran and CNBC anchor, pressed Murdoch about his personal reaction to the growing anger in Hollywood and elsewhere among those who view the tone of Fox News’ coverage as fear-mongering in support of President Donald Trump. Murdoch responded that Fox News is one of many news platforms in the Murdoch empire, between New Fox and News Corp.
“You have to look at the Wall Street Journal and the Times of London,” he said. He also noted that “far more” people watch Fox News’ reporting than watch the primetime lineup of opinion hosts. He stressed the straight-news reporting credentials of anchors such as Shepard Smith, Chris Wallace, and Martha MacCallum.
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Sorkin read to Murdoch the pledge made to Variety earlier this week by “Modern Family” co-creator Steve Levitan that he will not work with Fox Broadcasting so long as Fox News remains “a destructive voice” in the culture. Murdoch called Levitan “a genius storyteller” and credited him with having “a huge amount of empathy.” “Modern Family” is produced for ABC by 20th Century Fox TV and has been a big driver of profits for the studio.
“I completely understand this. He feels the anger and intolerance of opinions that we’re seeing across all of our communities in America,” Murdoch said. He described his own political views as “conservative economically and more liberal on social policy. I don’t fit neatly into a left-right, Republican-Democrat bucket.”
Murdoch also fielded a question from the audience in the Jazz at Lincoln Center conference room that came from author and New Yorker journalist Ken Auletta, who asked if Murdoch was embarrassed by some of the content on Fox News.
“I’m not embarrassed by what they do at all,” Murdoch said. “Fox News is the only mass media company in America with conservative opinions. It’s the only one. Frankly I feel in this country we all have to be more tolerant of each other’s views. We’ve come to this point where we are more and more intolerant of each other and frankly that has to change.”
Murdoch was reserved when asked about his view of Kelly’s fate, although he did allow that her standing as a top TV journalist has been damaged by the blackface controversy that erupted last week.
The former Fox News star anchor left the cabler in January 2017 for a rich deal with NBC News. Last week, Kelly’s relationship with NBC News imploded after she made on-air remarks defending the use of blackface for Halloween costumes. Kelly is now in the midst of contentious negotiations to settle out the remaining year on her three-year contract.
“I’m a big fan of Megyn’s. We didn’t want her to leave Fox,” Murdoch said. But he suggested that there was no room for her to return to the Fox News roster. “I’m very happy with our current lineup on Fox News and we won’t be making any changes there,” he said. When asked if he thought she would be able to find a new TV home given the outcry, he responded: “I hope she does because she’s very talented.”
Murdoch described Fox News as the outlet that President Trump “dislikes less than everyone else” rather than being a cheerleader for the President’s agenda. Sorkin noted that New Fox’s decision to hire Hicks as head of corporate communications, despite her youth and lack of experience in PR for public companies, only reinforces the perception that Fox is deeply aligned with the Trump camp.
Murdoch said reports that Trump adviser and son-in-law Jared Kushner asked the Murdochs to hire Hicks as a favor were “100% false.” He said the company did its “due diligence” on Hicks. “Universally many people said she was a fantastic choice,” he said. “This is an incredible executive with incredible experience who frankly will do a tremendous job.”
Although Fox News issues dominated the conversation, Murdoch also gave a bigger-picture look at plans for New Fox, which will be rooted in TV through the ownership of Fox Broadcasting, Fox News, and Fox Sports. And the portfolio will surely grow, particularly as New Fox will be flush with cash from the $71.3 billion Disney transaction.
“We will be acquisitive,” Murdoch said. “We intend to grow the business.” Pressed for specifics, Murdoch said they would be looking for assets that will enhance the company’s leverage with MVPDs in carriage negotiations. New Fox will have earnings of about $2.5 billion at the outset, Murdoch said.
There’s been speculation in recent days that New Fox will seek to buy back the 22 regional sports networks that Disney has to divest in order to secure federal approval of the transaction. That has set up the possibility of New Fox buying back at a lower price assets that account for nearly $20 billion of the valuation of 21st Century Fox-Disney deal.
The fate of the RSNs “is an open question. We think they’re very good businesses,” Murdoch said. But buying all 22 channels might be too big of a deal for the new entity to handle. “We’re a smaller company now (so) there’s an opportunity cost to buy a business that large,” he said.
Other highlights from the conversation:
Murdoch would not comment on the future plans of his younger brother, James Murdoch, who will be leaving the family fold after the Disney sale is complete. About rumors that James Murdoch is in line to become chairman of Tesla following the ouster of founder Elon Musk, Lachlan would only say: “You should ask James or Elon.”
Murdoch tamped down speculation that New Fox will eventually be re-merged with the Murdochs’ News Corp. “I don’t see the industrial logic for that today,” he said.
Murdoch offered a behind-the-scenes glimpse of how the brothers and their father came to grips with the idea of selling the Fox empire. It started with an overture from Verizon, but none of them thought the 20th Century Fox studio et al. would be enhanced by merging with the telco giant. “When (Disney’s) Bob Iger called, we immediately saw this made a great deal of strategic sense,” he said.
Comcast’s aggressive effort to counter Disney’s offer was welcome in that it dramatically raised the final sale price. “I thought that our initial negotiation with Disney was very good, but we felt we could get a higher price if we could get a bidding war going,” he said.
Murdoch had a savvy response to Sorkin when asked if he watched the new HBO drama “Succession,” which revolves around a family-run media empire that bears more than a passing resemblance to the Murdochs. “I’m too busy watching ‘Billions,’” Murdoch said, referring to the Showtime drama series set in the world of high finance that Sorkin co-created.