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News Corp. COO: 'American Idol' Needs 'Fresh Energy'

Chase Carey
Valerie Macon/Getty Images

"Ratings today are a bit disappointing," and the show needs "freshness and excitement and originality," Chase Carey tells an investor conference that also questioned him about a potential spin-off of the conglomerate's newspaper business, the L.A. Dodgers and the phone hacking scandal.

NEW YORK - American Idol is "still a big franchise" and has "a lot of legs left in it," but "ratings today are a bit disappointing" amid increased competition from the likes of The Voice, News Corp. president, COO and deputy chairman Chase Carey told an investor conference on Tuesday.

Speaking at the 20th annual Deutsche Bank Media & Telecom Conference in Palm Beach, Fla. in a session that was webcast, the right-hand man of Rupert Murdoch also acknowledged that some investors would prefer if News Corp. spun off its newspaper business, but signaled that was not a likely scenario near-term.

Discussing Idol, Carey said that the show "right now is clearly a glass half full," but it needs "freshness and excitement and originality" that Fox must focus on injecting. He later used similar phrases to describe what Idol is lacking this season, speaking of the need to bring "fresh energy" and "new dimensions and aspects" to the show.

Financially, Carey said that the media conglomerate factored Idol's ratings weakness into its most recent financial outlook, but highlighted that it is "still a big hit any way you measure TV series." Asked if the show can reduce costs to offset weaker ratings, he said yes, but the key focus is to inject more excitement.

Questioned about his expectations for the Fox broadcast upfront in May, Carey said "we like the hand we got," but wouldn't predict how upfront advertising sales would go. Overall, the ad business "continues to be really solid," but also continues to lack visibility.

Discussing the importance of sports rights, he said they are "more valuable than ever." Asked about the L.A. Dodgers sales process, Carey said News Corp. is looking to see if there is "something that makes sense" and added that "it's a business we like a lot," but didn't predict an outcome.

Addressing the continuing phone hacking investigations against News Corp.'s U.K. newspaper business, Carey said Tuesday that they are  "certainly to a degree" a distraction, but the company wants to "make things right," while ensuring that its other businesses focus on their own challenges and opportunities.

Is News Corp. management aware that investors would prefer the company not to own print businesses? "Certainly there is an awareness," Carey said, adding that there are some voices at the company that have also suggested a spin-off that would be popular with Wall Street folks and investors. But he said that improving the profitability of the print businesses and running them together with the rest of the portfolio is the current focus for management. That said, he said the company respects those other views and promised that the firm's board would continue to stay open to discussing what makes the most sense.

He did signal once again though that News Corp. could launch another stock buyback program if its stock remains "woefully undervalued," Carey said.

Amid a discussion about News Corp.'s cable networks, Carey said that the National Geographic Channel has a lot more upside. Compared to non-fiction juggernaut Discovery, "we are not even close," he said. The goal must be to get the right programming for the network, Carey added.

Hulu and digital distribution of content also came up during the discussion. He wouldn't speculate on whether private equity firm Providence Equity Partners would use an option to sell its stake in Hulu later this year as many observers expect. "They will do what they choose to do," Carey said, calling the firm "a good partner."

He reiterated that News Corp. remained a partner in Hulu as the digital world will likely continue to evolve, and Hulu is "a truly unique franchise true to the credit of [CEO] Jason Kilar" and his team.

Could the online availability of content cannibalize traditional TV and could that lead to News Corp. pulling back some of its content from online distributors? Carey said that is not a realistic scenario. One can't put technology in a box or make online distributors go away, so "you want to deal with them intelligently," Carey said.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai