News Corp., which turned Fox News into the most-watched cable news channel in less than a decade, said it will start a business news network by the end of this year.
Roger Ailes, chairman and chief executive officer of Fox News, will develop and oversee Fox Business Channel, New York-based News Corp. said today in a statement.
News Corp. Chairman Rupert Murdoch will challenge CNBC and Bloomberg Television with the business channel, first announced in 2004. Murdoch, who has broadened from newspapers to cable and the Internet, built Fox News from scratch starting in 1996 to overtake CNN. MySpace.com, purchased in 2005, may total 10 percent of revenue in five years, he said today.
``My gut says, `What, are they kidding?''' said Susan Nathan, senior vice president and director of media at advertising agency Universal McCann in New York, referring to the business channel. ``But people didn't think there was a need for a new 24-hour news channel, and Fox has competed and succeeded.''
Class A shares of News Corp., the third-largest media company after Time Warner Inc. (TWX:US) and Walt Disney Co., gained 60 cents, or 2.6 percent, to $23.94 at 4 p.m. in New York Stock Exchange composite trading. They have gained 51 percent in the past year.
Bloomberg News and Bloomberg Television are owned by Bloomberg LP. CNBC is part of NBC Universal Inc., which is controlled by Fairfield, Connecticut-based General Electric Co. (GE:US)
Ailes, who led CNBC until leaving to form Fox News in 1996, has named Neil Cavuto, a former CNBC anchor now at Fox, as managing editor to oversee content and business news coverage.
Kevin Magee, executive vice president of Fox News, will run day-to-day operations of the new channel. Alexis Glick is the channel's director of business news and reports to Cavuto.
``We think there's a great opportunity there,'' Murdoch, 75, said at a McGraw-Hill Cos. media conference in New York today. ``We want to be a little more business-friendly than CNBC,'' he said.
News Corp. (NWS:US), which started as an Australia newspaper business and now owns more than 175 publications worldwide, started buying Internet businesses including MySpace two years ago as advertisers began to transfer an increasing part of their budgets from print publications to the Web and cable-television.
Sales from News Corp. Internet businesses may account for 10 percent of total revenue in five years, Murdoch also said at the conference. The prediction excludes revenue from the Web sites of News Corp.'s newspapers, which include the New York Post and the U.K.'s Sun. MySpace accounts for less than 1 percent of the company's revenue today. News Corp. had $25.3 billion in sales in the year ended June 30.
News Corp. (NWSA:US)'s Twentieth Century Fox studios signed Sacha Baron Cohen to make a sequel to his ``Borat'' movie, Murdoch also said. ``Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan,'' was made for $18 million and generated $248 million in ticket sales worldwide. Murdoch said he saw the movie three times.
The business news channel has 30 million subscribers signed up, News Corp. said.
Time Warner Cable, the second-largest cable business, agreed in January to carry Fox Business. News Corp. also has distribution agreements with Philadelphia-based Comcast Corp. (CMCSA:US), the largest cable service, DirecTV Group Inc., the largest U.S. satellite-television service, and St. Louis-based Charter Communications Inc. (CHTR:US)
News Corp. is shifting control of El Segundo, California-based DirecTV to John Malone's Liberty Media Corp. in an $11 billion asset swap. EchoStar Communications Corp. (DISH:US)'s Dish Network, DirecTV's smaller competitor, wasn't mentioned in the statement.
``There's room for another player and Roger Ailes has a good track record in launching new networks,'' said Aryeh Bourkoff, an analyst with UBS Securities in New York. ``This is not an executive who is accustomed to failure.''
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