News Corp. reiterated its goal to make $1 billion in profit from its international pay TV channels by 2015, and the company said during a conference call Wednesday that it's on track to get there.
One factor in the outlook is cricket. News Corp.'s subsidiary Star India agreed to pay more than $700 million to the Board of Control for Cricket in India last year for the broadcast, Internet and mobile rights for matches from July 2012 through March 2018.
Deputy Chief Operating Officer James Murdoch, son of CEO Rupert Murdoch, said the cost will translate into greater profits down the road.
However, he said that due to News Corp.'s acquisition of the 50 percent of ESPN Star Sports joint venture it didn't already own from The Walt Disney Co. in November, cricket rights fees will be somewhat more burdensome.
QUESTION: Your Fox Sports Asia, STAR Sports Asia and ESS assets you've added recently look like pretty nice contributors to growth. How are you guys thinking about folding those assets into Fox International and thinking about the long-term profit potential? You've given the past guidance I think about $1 billion of (operating income) in '15 and I wanted to see how you are feeling about that number and whether these assets change that outlook?
RESPONSE: In India with the BCCI and the consolidation of some of the lumpier rights costs that are mostly cricket rights in India, that will impact the short-term overall profitability in India. But I think puts us on track to substantially greater profitability within a three-to-five-year time frame. In the rest of Asia and Latin America, we think it enhances the profitability within the '15 target. We think it'll be better and ongoing. So it's a really positive move. It's a lot of work right now but it really transforms the scale of those businesses.
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