Fox unveils ‘insanely simple’ business model at Investor Day

Fox Corp. unveiled an “insanely simple” new structure at its first-ever Investor Day Thursday, saying the new company plans to focus its programming almost entirely on live events, like news and sports.

Rupert Murdoch first took the stage at the Midtown Manhattan event to explain why the company chose to slim down through the sale of its entertainment and film assets to Disney for $71.3 billion.

The company is “pivoting at a pivotal moment,” said the 88-year-old chairman. “We could see a shift coming in media and the danger to the industry,” he said, adding that Fox’s film and TV studios were too small to compete as stand-alones against deep-pocketed tech companies moving into the space.

Fox Chief Executive Lachlan Murdoch then took the stage to explain that under the new structure, Fox will get half of its revenue from advertising and half from affiliate relations, or fees for programming.

The content that will be driving the ad revenues will be 70 percent devoted to news, sports and other live events, he said.

The emphasis on live programming, like football games and breaking news, seeks to distinguish Fox from other broadcasters in an industry that has seen scheduled programming transform into “anytime viewing” thanks to services like Netflix and YouTube.

“We’re standing apart from the mob and focusing on the power of now,” the younger Murdoch said of the focus on live programming.

The new business model is “insanely simple,” Murdoch told the crowd. “We outpunch competitors in the amount of live television we deliver to American households.”

The Disney sale has left Fox with four key brands: Fox News Channel, the country’s most-watched basic cable network; Fox Sports; Fox Network, the national television broadcast network; and Fox Television Stations, which owns and operates 28 broadcast stations in the US.

Elder son Lachlan said Fox was “returning to its roots” with the leaner structure — one that would leave it “unencumbered by assets and strategies and attitudes that are not built for today’s eco-system.”

He cited Fox Broadcasting as an example, saying it is now “free to commission the best content from any studio.”

Fox Sports Chief Executive Eric Shanks also took the stage to detail the company’s move into legalized sports betting through a $235 million investment in Stars Group, the Toronto-based gaming and online gambling company.

The partnership is called FOX Bet and will create apps for wagering on sports and other real-time contests.

Fox sees sports betting becoming a $7 billion business by 2025, Shanks said.