21st Century Fox’s September quarter earnings highlighted a challenge for all the big entertainment companies: rising sports programming costs took a big bite out of earnings growth. Fox’s cable channels division, which includes Fox News, saw its operating profits grow only 2% as higher sports costs offset growth in affiliate fees. Its broadcast TV division, which includes Fox TV stations, did better but also were affected by higher sports programing costs.
The earnings report was one of the last to come from Fox before it sells much of its assets, such as the 20th Century Fox film studio and several cable channels, to Disney early next year. What’s left will include Fox News, Fox Sports, the Fox TV stations and broadcast network. It may end up buying back the Fox regional sports networks, which Disney has to sell. Keeping sports programming costs down as it tries to keep expanding viewership will be a key challenge as it evolves into a smaller company that focuses mainly on sports and news.