James Murdoch unloads again, but Fox News is too profitable to change

For the third time in 12 months, James Murdoch has chosen to make a dramatic public intervention criticising the editorial policies of both his father Rupert and older brother Lachlan, who jointly chair News Corp and Fox Corp.

Back in January 2020 he raised his voice via a piece in The Daily Beast, launching with his wife Kathryn Hufschmid into News Corp’s climate denialism following the tragic Australian bushfires.

When the older Murdoch men showed no public sign of backing down on climate denialism and remained full-throated in their support of Donald Trump, James Murdoch severed all public ties, quitting the News Corp board in a blaze of headlines on August 1, citing editorial differences over political and environmental issues.

James didn’t offer up a running commentary through the presidential election campaign but, like with many people, the attempted violent insurrection at the US Capitol was clearly a red line, so he was back making public statements on Friday, this time slamming “insidious coverage” by certain unnamed US media outlets via a piece in the Financial Times.

The FT interview was accompanied by a joint statement with Kathryn:

Spreading disinformation — whether about the election, public health, or climate change — has real world consequences. Many media property owners have as much responsibility for this as the elected officials who know the truth but choose instead to propagate lies.

Fox News has shown no sign of backing off in recent days and just announced that it will introduce an additional hour of opinion programming in the evenings.

Indeed, when snarling white supremacist Tucker Carlson interviewed News Corp’s Miranda Devine on Thursday night, he commented: “Every day I wake up grateful that we work for a company that is not dependent on Silicon Valley to get its message to its viewers.”

“Me too,” replied Devine.

Strictly speaking, Carlson should have spoken about “working for a family” that green lights his nightly pile of bile, but that family is clearly split.

Fox News is now easily the biggest single earner inside the slimmed down Fox Corp and News Corp empire after the US$73 billion sale of 21^st Century Fox’s entertainment assets to Disney in March 2019.

Fox Corp is today capitalised at US$18.5 billion and the clear majority of this value comes from Fox News. The Murdoch family owns around 16% of Fox Corp so Fox News has delivered around 10% of the family’s estimated $30 billion wealth.

Fox News was launched in 1996 and since it first became profitable in 2000-01 it has been housed inside what the Murdochs call the cable network programming (CNP) division. Up until the 2019 Disney deal the division included other business such as general entertainment channel FX, National Geographic, NASCAR, regional sports programming and international offerings.

So what can we glean from the history of profits of the CNP division?

2001-02: Back when News Corp was still an Adelaide-based, ASX listed company, the CNP division delivered profits of US$199 million, which was just 10.33% of the total US$1.6 billion and ranked fifth of the seven divisions, well behind newspapers on US$430 million.

2002-03: Rupert said the election of George W Bush was “the making of Fox News” and CNP delivered a record US$430 million in the first full year of the Bush presidency. This was 16.9% of the US$2.53 billion total profit and ranked third of the seven divisions, ahead of newspapers (US$400 million) for the first time.

2004-05: The CNP division delivered US$702 million, a record 19.7% share of the overall record US$3.564 billion profit. However, it was still in fourth place internally, behind the US$740 million made by the newspaper division.

2005-06: CNP delivered US$864 or 22.3% of the US$3.87 billion total profit, ranking third of the seven divisions and shooting past the US$517 contribution by the newspaper division, which never topped it again.

2006-07: CNP’s US$1.1 billion operating profit was second only to the film division and comprised a record 24.5% of the overall US$4.45 billion profit.

2007-08: CNP delivered the biggest divisional contribution of US$1.26 billion which was 24% of the record US$5.27 billion profit.

2008-09: This was the year the CNP division really took over, delivering a record US$1.67 billion comprising 46.9% of the US$3.56 billion overall operating profit.

2009-10: The seven divisions were reduced to five with newspapers, magazines, marketing inserts and books merged into a publishing division which made US$467 million, barely one fifth of the record US$2.27 billion profit delivered by CNP — which was in turn a record 57.2% of the total US$3.96 billion operating profit.

2010-11: CNP dominated with a US$2.76 billion profit which exceeded the other four divisions combined and comprised 56.9% of the overall US$4.85 billion operating profit.

2011-12: The last full year before the 21^st Century Fox demerger saw CNP deliver a staggering US$3.3 billion operating profit which was 61.3% of the total US$5.38 billion total profit, almost triple the film division and more than five times the US$597 million delivered by the publishing division.

Fast forward to March 2019 and 21^st Century Fox sold off all its entertainment assets to Disney. The slimmed down Fox Corp has produced two full year results since:

2018-19: CNP delivered US$2.68 billion in operating profit, which was 93% of the total, with the free-to-air television division’s operating earnings of US$470 million.

2019-20: Fox News delivered again as CNP reported a US$2.71 billion operating profit, 97% of the total. The television division delivered US$430 million.

As you can see, Fox News is too profitable to fundamentally change, but surely it can pivot to become a far less cavalier right-wing broadcaster in the post-Trump era.

The constant attacks on Democrat women of colour by the likes of Hannity and Tucker Carlson should surely be wound back. But will it happen?