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Fox is actively pursuing M&A opportunities now that it hasn't merged with News Corp.
Two of the Murdoch family's holding companies protested last fall after foreign shareholders asked patriarch Rupert Murdoch to consider a related board merger. He took it off the table in January, opening the door to other options.
Fox CEO Lachlan Murdoch reiterated the possibility of deals or more deals during a quarterly conference call with Wall Streeters on Wednesday because "I think scale is important." Fox reported strong numbers and a strong balance sheet for its fiscal second quarter. A focus on sports and current affairs helped boost advertising revenue in a weak market, and the stock remained an investor favorite. But it has lagged behind some of its media peers after redeeming itself a few years ago after selling what was left of 21st Century Fox to Disney.
Amazon/MGM and Warner Bros. major media deals for have cooled. After the discovery, struggling stocks, high inflation and interest rates, and the threat of recession intensified. But stocks are up, inflation is down and Murdoch's comments could be the first signs of an improving business climate.
"We will look at mergers and acquisitions to raise capital. We don't have anything on the table today, but I think we're in a strong position to take advantage of opportunities that arise. There are other companies in our industry that don't. That's what we can look at," Murdoch said. We hope acquisitions will be a big part of our toolbox."
"Balance" and "depth" are important to Fox's business, "and we invest in both."
Fox shares are up more than 5% in the overall down market.
"As you know, my father and I have come to the conclusion that it is not in the best interests of Fox or News Corp. shareholders to pursue a merger with News Corp. at this time. There is neither time nor opportunity for that." Murdoch said today. I think balance provides flexibility and being ready when opportunities arise is important. The reason why we are considering an alliance with News Corporation. It was for that."
Also on the call, he welcomed Tom Brady to the Fox Sports lineup and congratulated Brady on his "strong start and retirement," confirming that the seven-time Super Bowl champion will join the broadcast for the NFL season at the end of the 2024 season. "The whole team is happy to have him.
"It takes time to unravel, and it's definitely worth it."
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