Fox Chairman sees about 5M subscribers in about five years for sports JV

Lachlan Murdoch – Chairman of the Board of Fox Corp. (FOXA), stated when asked at the Morgan Stanley Technology, Media & Telecom Conference about the company’s recent sports streaming joint venture with Disney’s (DIS) ESPN and Warner Bros. Discovery (WBD): “We obviously have done a lot of work on this. We’ve thought about it extensively. And when we look at the size of the market and why we believe it’s going to be successful, our ability as — we’re both our channel providers or content providers to this bundle, but we’re — our joint venture partner in the platform. And so our ability to make sure that this bundle is focused on the cord cutters and the cord nevers and is not focused on people within — currently within the bundle. Our ability as owners or partners in this bundle is very important that we can make sure it’s focused on the people that are currently outside of the bundle. But also when we look at it, and we look at the cost of the bundle, effectively, the best way to look at this is that it’s — there’s been a lot of focus on it, and it’s some hyperventilation around it. But it’s effectively going to operate like — or the mechanics behind it are like a DMVPD, right? So it’s — and the economics are like that. So FOX and Disney and Warner Bros. Discovery will get paid per subscriber just as we would if we were selling to a DMVPD, right? A YouTube TV or Fubo or a DIRECTV, we get paid on the same economics as if they were a cable subscriber. So that’s very important. The pricing — because of that the pricing is going to be in the higher ranges of what people have talked about. And what that drives the output from all that is that our internal expectations and what we’ve built our plans around are that within 5 years, we will have 5 million subscribers within 5 years. So some of the talk about this being in the teens or 20 million subscribers, we don’t think that’s the case. We think it’s a very good business for us. We think every single — not every single subscriber, overall, it’s an increment — these subscribers are incremental to our base, our subscription base. And we think at around 5 million subscriber mark, that’s what we’ll settle after about 5 years.”