News Corp. national, int'l networks doing well
But local markets have 'serious issues,' says CherninNEW YORK -- News Corp. said that it too is feeling the economic turbulence that is buffeting the local TV market, although its national and international networks are weathering the storm pretty well.
News Corp. COO Peter Chernin told Wall Street analysts in its quarterly conference call that the company's core businesses remained healthy, with a lot of strength with Fox Broadcasting and its national cable networks from Fox News Channel to FX and National Geographic Channel. But the local markets are another story, with Chernin calling them "serious issues" facing them.
"Our local stations are feeling the effects of a worsening economy," Chernin said.
Local ad revenue dropped 10% in the quarter with weak pacing expected to continue into the new quarter. There has been some political advertising coming in but big categories like automotive, telecom and financial services remain in negative territory.
Not so for Fox, which had a strong upfront, a so-far low level of cancellations and what Chernin termed a robust scatter market. The NFL ad market is strong and all three of the top "American Idol" sponsors (Ford, Coca-Cola and AT&T) have all re-upped for the new season that begins in January.
"We are seeing real strength in national [advertising]," Chernin said.
Chernin said that the single biggest auto advertiser is Ford, which just locked in the "American Idol" deal. Fox also made multiyear deals with a number of car companies on the sports side, which locks them in. And national advertising hasn't suffered as much as local among automakers, Chernin said.
There's good news on the ad front with networks like Fox News Channel, FX and National Geographic, as well as new affiliate contracts with Time Warner Cable for Fox News Channel. Chernin said News Corp. was in negotiations with Echostar and Comcast.
News Corp. CEO Rupert Murdoch painted a bleak picture of the economies in the United States and Europe. But he said that beyond the local TV business, News Corp.'s diverse and growing assets would not only weather the storm but also strengthen and grow.
Despite News Corp. selling several of its stations, Chernin and Murdoch did not see that it was likely to sell any more over the foreseeable future.
Murdoch said that the stations that remain "are the backbone of the network."