(Bloomberg) — Charlie Collier, chief executive officer of Fox’s entertainment unit, is on a shopping spree, helping to restore the depleted Murdoch media empire one juicy deal at a time. Next on the list: fresh gossip.
The company announced Monday that it is acquiring TMZ, the celebrity gossip site and TV show, from AT&T Inc.’s WarnerMedia. The price tag, according to people familiar with the deal, is less than $50 million. The move is the latest step in an ongoing effort to build a new entertainment business after Fox sold a large chunk of its assets to Walt Disney Co. three years ago, including the 20th Century Fox studio and the FX and National Geographic cable channels.
“When everybody is trying to move their viewer behind a paywall, we see great opportunity in ad-supported businesses,” Collier said.
Prior to joining Fox in November 2018, Collier, 52, was president of AMC, the edgy cable TV network responsible for hits like “Mad Men,” “Breaking Bad” and “The Walking Dead.” At the time, moving into the broadcast TV business was hardly an obvious next career move. Streaming video-on-demand networks like Netflix were the next big thing in home entertainment.
But Lachlan Murdoch, CEO of Fox Corp., made a convincing pitch to Collier. The company, he said, would be keeping the Fox name and its lot. The Fox broadcast network still attracted millions of nightly viewers and could be used to build and invest in all kinds of new businesses. Collier made the leap.
The revamp is now in full swing.
In 2020, Fox acquired Tubi, an ad-supported streaming service, for $440 million. Since then, Fox has been moving some of its hits, such as the brick-building competition show “Lego Masters,” over to the free service. This fiscal year, Tubi’s advertising revenue more than doubled to nearly $400 million.
The company acquired Bento Box Entertainment, maker of the animated show “Bob’s Burgers.” Last month, Fox announced a production partnership with celebrity chef Gordon Ramsay, the star of two shows that aired during the summer on Fox, “Hell’s Kitchen: Young Guns” and “MasterChef: Legends.” Ramsay said he talked to other potential partners, but chose Fox in the end. “It’s always felt like home at Fox, and now it’s more official than ever,” he said.
The TMZ deal will add yet another multiplatform piece to Fox’s growing portfolio of brands. Content from TMZ, which has a large online following and a TV show that has run on local Fox stations for 14 years, can be put on Tubi and used to help promote Fox shows. The network is already a TMZ advertiser. There’s also an opportunity to create more programming around the TMZ name, such as documentaries for the network or the Tubi service.
“What a broadcast network does is they go broad, and what Tubi does is they go deep,” Collier said.
For two years in a row, Fox has managed to keep its title as the No. 1 network for 18-to-49-year-old viewers, the audience targeted by advertisers. But running a broadcast network in 2021 remains a unique challenge. Audiences are turning away en masse from regularly scheduled TV, and Fox is not immune from the resulting decline in ratings. The network averaged 4.2 million total viewers nightly in prime time through the season that ended in May, down 15% from 2017.
To combat the downward trend, Fox has focused on sports and reality shows that draw more live viewers. Earlier this year it renewed its NFL contract at the staggering rate of more than $2 billion a year. The company has also been using the network to promote Fox Bet, a new sports betting venture.
Across the broadcast TV landscape, ad purchases, measured in the cost to reach viewers, have remained strong, despite the audience declines.
“Ratings are down. I’m not under any illusion that it’s a growing business,” said David Campanelli, who heads ad purchases for clients at Horizon Media in New York. “It’s still the only place you can reach several million people, with a 30-second ad, at one time.”
Garth Ancier, who served as the first head of programming at the Fox network when it launched in 1986, said the company’s strategy has always been to do things differently from CBS, NBC and ABC.
“If it was a show that worked on those channels don’t put it on Fox,” he said.
Collier has been trying to energize the creative teams at Fox by emphasizing the company’s “rebel roots,” as exemplified by pioneering broadcast shows like “The Simpsons” and “Married…with Children.” Before the pandemic, Collier regularly brought in writers and directors from past hits like “24” to discuss their creative decisions with current employees.
Collier has maintained ties with hitmakers such as writer Ryan Murphy. Despite a lucrative deal with Netflix Inc., Murphy keeps an office on the Fox lot and executive produces the network’s “9-1-1” series. The writer and director Lee Daniels, creator of “Empire,” a former hit for Fox, is back this season with “Our Kind of People,” about a wealthy Black family on Martha’s Vineyard. In January, following the conclusion of the NFL’s NFC championship game, the network will launch “Monarch,” a drama owned by Fox’s new studio, about a music industry family in Austin.
Over the summer, Collier announced Fox’s plan to invest $100 million to create digital goods that can be sold and collected by fans. This fall, Fox will premiere a new singing competition, called “Alter Ego,” in which contestants will be presented on stage by avatars that they’ve created. Collier envisions fans collecting limited edition images or video clips of the characters, traceable through non-fungible tokens, or NFTs. He thinks about his own four children, ages 16 to 23.
“It’s so natural for them to buy a digital good,” Collier said.
On a recent tour of the Fox lot in Los Angeles, which the company retained after the Disney sale, Collier passed the bungalow that used to be Marilyn Monroe’s office, the faux motel that served as the headquarters for “Charlie’s Angels” and a scary door that serves as a tribute to “Young Frankenstein.”
At one point, he steered a golf cart down “New York Street,” a versatile, faux cityscape built in 1968 for “Hello, Dolly!” that can be easily rearranged according to the needs of the studio. Collier hopped out and ducked into a storefront. Inside, there was a room that could also be a bar or someone’s home, depending on the decorations.
“It’s built for multiple purposes, which is a probably a great metaphor for the business side of things,” Collier said.
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