The tepid World Series matchup between the Arizona Diamondbacks and Texas Rangers, two wildcard teams with the lowest combined wins of any pairing in the history of MLB, has drawn record low ratings and questions about the liberal playoff system that arguably gave too little advantage to division winners.
Count new Fox Corp. CEO Lachlan Murdoch as one who was no fan of this year’s five-game Fall Classic. Speaking about the sports ad market on this morning’s company earnings calls, he said, “The market remains healthy. This will be somewhat tempered by postseason baseball, including the conclusion of the World Series last night. You know, I think, you know, sometimes you get lucky and you get, you get seven game series, you know, with matchups that incite the imagination of a national audience, and sometimes, sometimes you’re, you’re less lucky. So that’s how the cookie crumbles. And so, I think, you know, we would like to see more games and we’d like to see, you know, a bit more sort of national excitement around these games. But um, but it is, is what it is.”
Adding a gracious note, he added, “Having said that, you know, we should congratulate the Texas Rangers for, you know, a great, great season and winning the World Series.” Damn them!
Compare that to his heady words about the NFL and college football ad markets and it is quite a contrast.
“Advertisers are pouring into college football, for tremendous rights and with tremendous appetite for volume, because they can see the value in this audience, and perhaps it’s been underpriced in past years,” he said. And he predicted the high NFL ratings would soar even more in the second half of the season.
If Fox remains unimpressed with MLB, look no further than WWE for what could happen. Fox inked WWE’s Smackdown in 2019, but this year ceded the rights to USA. Murdoch expanded on why this morning.
“We were not hitting the advertising numbers due to the audience of the WWE to make the return for our return on investment, to be above the levels that we would accept,” he said. “But also, we didn’t attribute enough significant retransmission revenue to the WWE either. So it made sense for us to move off and, and they’ve been a great partner for many years… So we wish them luck, and we’ve moved on from them.”
One property Fox is not ready to move on from is NASCAR. The stockcar racing circuit has deals with Fox and NBC through next year. Murdoch made clear Fox is quite happy with the American circuit.
“We’re currently in, I think, the final stages of a very constructive negotiation for our NASCAR renewal, we’d look forward to continuing that, that partnership with NASCAR,” he said. “It’s been a great partnership for many years, and, and obviously, you know, NASCAR exceeds our expectations into from, from a ROI point of view.”
Asked about the high-profile renewal between Walt Disney and Charter Communications, Murdoch described it as a net positive for Fox, but the truth is it does not affect his company quite in the same way as other sports broadcasters. First, Fox Sports is bundled with Fox News, making it all but impossible for cable distributors to caesar airing the channels over a fee dispute.
But more importantly in this context, the Charter-ESPN deal was precedent setting because it bundled Disney streaming platforms into the contract. Fox Sports has stayed away from putting sports on a streaming platform, unlike its competitors.
“We feel the success of our distribution partners, is our success as well, we want them to succeed, and we want them to do well, which is one reason why, you know, you know, we’ve kept, you know, our premium content within the cable bundle,” he said. “We are not interested in at this stage moving premium content away from our cable distribution partners, that would be a, I think, a mistake for us and for them. And so due to that, since our last call a quarter ago, we have renewed a number of distribution contracts.”
Murdoch did not entirely rule out putting sports on a direct to consumer platform, though he certainly didn’t sound optimistic.
“We have a small direct to consumer SVOD service in Fox Nation,” Murdoch said, referring to subscription video on demand (SVOD). “And we have the optionality of, you know, expanding those services further into news and potentially sports.”
Asked if sports could air on Tubi, Fox’s ad-supported entertainment streaming platform, Murdoch replied negatively.
“We don’t envisage any kind of significant live sports on Tubi in the near, medium, perhaps even long-term future,” he said.
Fox shares were up roughly 2 percent in early day trading, as revenues rose in the quarter and investors likely looked to an expected surge in political ad spending in the next year.