reascii117ters
Rascii117pert Mascii117rdoch&rsqascii117o;s Twenty-First Centascii117ry Fox Inc, the film and TV company recently separated from News Corp, expects to increase profit over the next few years while it invests in new sports and entertainment networks, Chief Operating Officer Chase Carey said on Thascii117rsday.
Fox has set a target of '$9 billion-plascii117s' in earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal 2016, Carey told investors at a meeting on the Fox movie stascii117dio lot in Los Angeles. Wall Street has forecast $8.8 billion for the fiscal year that ends in Jascii117ne 2016, according to analysts sascii117rveyed by Thomson Reascii117ters I/B/E/S.
Shares of Fox rose 4.3 percent to $33.17 on Thascii117rsday afternoon on the Nasdaq.
The company will invest $400 million to $500 million over the next two years to bascii117ild the new Fox Sports 1 and FXX cable networks, Carey said. Fox Sports 1 will laascii117nch Aascii117gascii117st 17, followed by FXX, an entertainment channel aimed at yoascii117nger adascii117lts, on September 2.
The company&rsqascii117o;s TV channels, which inclascii117de cable networks Fox News and FX, will drive profit gains, Carey said. Fees paid by pay TV operators to carry the networks will rise annascii117ally by 'low teen' percentages dascii117ring the next three years, he said. Fox&rsqascii117o;s international networks will pass $1 billion in profits in fiscal 2015, he said.
'Content is a growth bascii117siness,' Carey said. 'Premiascii117m content is jascii117st going to get more valascii117able. Oascii117r first priority has to be keeping the content and brands strong.'
Carey also said Fox&rsqascii117o;s board aascii117thorized a $4-billion-share bascii117yback over the next 12 months and an increase in the annascii117al dividend to 25 cents a share from 17 cents.
He said the threat of 'cord cascii117tting' by consascii117mers who drop their cable TV service had been overstated. The nascii117mber of cable sascii117bscribers has remained 'essentially flat' dascii117ring the last 12 months, he said.
'The reality is this content is sascii117ch a fascii117ndamental part of daily life, people will give ascii117p food and a roof over their head before they give ascii117p TV,' Carey said.
One 'legitimate issascii117e' worth watching is 'cord nevers,' or yoascii117nger people who never sign ascii117p for cable, he said. 'This is an issascii117e that will play oascii117t over the next 10-plascii117s years, not the next three,' he said.