Fox Eyes M&A After Merger With News Corp. Scrapped: “Scale Is Important” – Lachlan Murdoch

Fox will be actively pursuing M&A opportunities now that it won’t be merging with News Corp.

Outside shareholders of both of the Murdoch family holdings had protested after patriarch Rupert last fall asked the respective boards to explore a combination. In January, he took that off the table, opening a door to other possibilities.

Fox CEO Lachlan Murdoch stressed a few times today on the company’s quarterly conference call with Wall Streeters that other deal or deals are likely because “I do think scale is important.” Fox reported strong numbers for its fiscal second quarter and a solid balance sheet. Its defined focus on sports and news helped boost ad revenue in a soft market and has been keeping the stock a favorite with investors.  

“We will be looking at M&A to deploy our capital. We don’t have anything on the table today, but I think we are in a strong position to capture opportunities when they present themselves. And, obviously, there are other companies in our sector that are not in as great a position that we will cast our eyes over,” Murdoch said. “We do expect that M&A will be a more important part of our toolkit.”

He the scale and the depth of the Fox business is important “and we will be investing equally in both.”

Fox shares are up more than 5% in an overall down market.

“As you know, my father and I reached the conclusion that exploring a combination with News Corp. is not optimal for shareholders of Fox or News Corp. at this time. No further time or action is being taken on this topic,” Murdoch said today. “I think scale provides flexibility and that it’s important to be prepared when opportunities present themselves. The rationale behind considering the combination with News Corp. was about that.”  

Also on the call, he welcomed Tom Brady to the Fox Sports fold and confirmed the seven-time Super bowl champion will join the broadcaster for the NFL season in the fall of 2024, congratulating Brady “on a stellar career and on his retirement. The entire team is excited to have him.”

“He is going to take a little time to decompress, which he well desserves.”