Forget the controversy over National Anthem protests, politics or the quality of NFL matchups. NFL ratings have declined over the past two years because of the “overproliferation” of games, particularly as the league expanded Thursday Night Football, said 21st Century Fox CEO James Murdoch.
Murdoch, who spoke this morning at the Paley International Council Summit in New York, admitted that ratings were “soft” this year, as they are down roughly 5 percent this season, but in-game TV ad spending still jumped 2 percent in September.
“There’s a question mark for the NFL, which is just to think hard about how they’re licensing. So I do think the proliferation of Thursday availability—and the proliferation of football generally—does mean that you’re asking a lot from customers to watch Thursday. And then they watch a lot more college football game on Saturdays, and then on Sundays, and then on Monday Night Football, etc. It’s a lot. So I do think that preserving the scarcity value of those events and that audience is something that is worth thinking about,” said Murdoch.
As the next cycle of NFL rights begin to come up, Murdoch said, “we and everyone involved in the NFL economy will obviously be talking about how to make it as popular and great and as relevant as it possibly can be.”
The exec also spoke publicly for the first time about the recent New York Times revelation that Bill O’Reilly settled a sexual harassment claim for $32 million, shortly before Fox News extended his contract. The company fired O’Reilly in April after a slew of sexual harassment allegations against him.
Noting that O’Reilly, and not his former company, was behind the $32 million settlement, Murdoch said “that was news to me when we saw that number the other day.”
He said that in a company with thousands of people, “I can’t make sure that everyone in the business doesn’t behave badly at times, but what I can make sure is if we know something, we can react to that information, we can be decisive about it. As we were with Roger Ailes, as we were with Bill O’Reilly … it was a harassment complaint, and we ended his employment there. As we’ve had other executives in other parts of the business. So I think the issue becomes, how do you react to those things, and what do you know?”
The CEO hopes his company’s dismissals of Ailes and O’Reilly “send a really strong signal to all of my colleagues, to everyone in the industry, etc., that actually there are behaviors that are not to be tolerated. And we’ll continue to strive to live up to that.”
Murdoch doesn’t think the O’Reilly news will derail his company’s purposed takeover of European TV giant Sky. “We never expected anything other than a very thorough regulatory process here, and we’re getting on with it,” said Murdoch. “We expect that to be cleared in the first half of the next calendar year.”
In other Fox news, Murdoch said Fox isn’t interested in a direct-to-consumer product like CBS All Access or the streaming service that Disney is readying for 2019. Instead, the company is focusing on bundles.
A la carte is “not a great consumer experience,” said Murdoch, who prefers offerings like Hulu, which has “live product, big brands, sports, movies, but it’s also current season and all of the SVOD product behind it there in a seamless way, which is what people deserve in a bundle.”
This dovetails with the company’s new philosophy to make its content more available and easier to access, which is why Fox has mostly moved away from striking big SVOD deals with Netflix and other services. “All of that licensing makes your product less available, not more. So what we look at is, how do we make it more available?” said Murdoch.
He said Fox wants all the new livestreaming bundles like YouTube TV and DirecTV Now to be successful, because those “deliver a customer experience that will make the overall business much more durable.”
He noted that subscribers to FX+, the company’s new ad-free offering for Comcast customers, are “rediscovering” library shows like The Shield and Nip/Tuck, which rank among the top 5 shows being streamed on the service, alongside current hit American Horror Story: Cult. “These things will have a life that is much, much longer than was ever anticipated before,” he said.
Murdoch also commented on Tuesday’s news that Randy Freer, Fox Networks Group president and COO, is leaving to become the new CEO of Hulu, as Mike Hopkins departs Hulu to take over as chairman of Sony Pictures Television. “I think he’s going to be a tremendous CEO for Hulu,” said Murdoch of Freer.