Chernin Says Writers Strike Will Be Good for Fox in Short Term12 Nov, 2007 By: Erik Gruenwedel
As the writers' strike ended its first week, News Corp. president and COO Peter Chernin said the work stoppage would be good economically in the short term for the company's Fox Television properties.
In a call with analysts, Chernin said an ongoing strike in fiscal 2008 would save the company in term deals, story costs and lack of TV pilot productions. He said Fox's sports programming would benefit as well if the competition started airing significant repeat programming.
“We save more money [not producing content] … than we lose in potential advertisers,” Chernin said.
The COO said a prolonged strike would result in a significant growth in market share for the Fox Broadcasting Network. He said much of Fox's animation programming was created a year prior to broadcast.
Chernin said Fox is better positioned for a strike than rival networks. He said with “American Idol” still to premiere, coupled with an array of reality programming, Fox can broadcast original programming virtually every night of the week for the remainder of this season.
“We expect [a strike] would help us win this ratings season by an even greater margin than we expect,” Chernin said.
The COO said it was frustrating to learn that “a pretty constructive day of negotiations [Nov. 4]” resulted in writers striking anyway.
“I think there is a deal to be done, and I think it is particularly frustrating that we can't seem to get there,” he said. “A strike longer than eight months would begin to negatively affect all aspects of Fox. I sure hope it doesn't go that long.”
Despite strong TV DVD sales of “Family Guy” and “Prison Break” and global box office returns of The Simpsons Movie and Live Free or Die Hard, News Corp. posted first-quarter (ended Sept. 30) income of $732 million, down 13% from $843 million during the same period last year.
Filmed entertainment, which includes 20th Century Fox Home Entertainment, reported consolidated operating income of $362 million, up 51% from $239 million last year.
Filmed-entertainment revenue topped $1.5 billion, compared to $1.2 billion last year.
Worldwide DVD sales of Eragon and Night at the Museum, in addition to Little Miss Sunshine on pay-per-view, contributed to the results.
Live Free or Die Hard has grossed more than $375 million in global theatrical revenue since its opening July 1, while The Simpsons Movie grossed more than $524 million since its release July 29.
The results did not include ad revenue from “American Idol,” whose juggernaut status among marketers is expected to pay dividends later in the fiscal year.
Total revenue, which includes television, cable, satellite, magazines, newspapers, and book publishing, topped $7 billion, compared to $5.9 billion last year.