News Corporation will release its 1st Quarter Fiscal 2010 today. (webcast link) I wrote a few financial analysts and asked them "What is the ROI to News Corp if some politician is shot at a Tea Party Fox organized? Some people say that Glenn Beck losing 80 advertisers had no impact because of the "great PR". Has this resulted in actual greater revenue on other shows?
Certainly Murdock can lose money on Beck for as long as he likes. But is the money coming out of his own pockets or out of the pockets of News Corp shareholders? Shareholders, as we all know, insist in maximizing shareholder value Quarterly! Show us the money!
Knowing how the world works, none of these questions will get asked. They will be dismissed as beneath the notice of the financial wizards of Wall Street. However, I just wanted to get them "out there" so that in the future when the "Nobody could have anticipated" event happens you and the plaintiff attorneys can point to this and say, "You were warned News Corp, you ignored the signs, just like the Entercom radio station did. Now you need to pay the price."
Here was my letter (slightly edited for posting here)
Jason: I know you have your own questions for News Corp’s earnings call today, but could you do me a favor and ask a few of the following questions during the Q&A session?
What steps has Fox parent News Corporation taken to protect their assets in the event of a shooting at a Fox sponsored tea party event?
Last week a jury ruled that Entercom Communications Corp (ETM:NYSE) subsidiary has to pay 16.6 million to the family of a Sacramento woman who died in a radio station water-drinking contest.. (Link) Although she signed a waiver and the station claimed they were not responsible for her actions, the jury still ruled that the subsidiary was negligent in the wrongful death case.
News Corp subsidiary Fox News has been actively organizing and promoting "Tea parties". Angry Fox viewers have brought weapons to these events to intimidated the President and other politicians. If someone is shot Fox will of course claim that they are not responsible for the actions of individuals just like Entercom did. But as we have now seen in the Entercom case that defense does not hold up in court. especially when the station is the driving force for getting people to participate.
It appears that Fox is not only ignoring the danger signs, it is actively calling for action that they have no way of controlling in an effort to boost ratings.
What steps have you taken to protect your assets in the event of a shooting at a Fox sponsored tea party event? Have Fox News competitors taken steps to protect themselves from shooting deaths at tea parties that they organize and support?
Has Fox taken out more insurance? Has News Corp? Can you name the insurers? Have the insurers taken into account the Entercom ruling yet for your premiums?
What steps has Fox News taken to recoup the revenue lost from 80 advertisers leaving the Glenn Beck show? (link to list of lost advertisers)
If the Beck show has high ratings but low revenue how long does the network plan to keep losing money on the show? Is there a path to profitability?
If the "high ratings" of the show is supposed to result in greater revenue for other parts of the company, is there any documented figures to make this connection? Third party audited figures? (The myth of Fox News ratings bump)
Which departmental budgets are subsidizing the Glenn Beck salaries and production costs?
If internal Fox budgets are not subsidizing the Glenn Beck show, is the funding coming from Chairman Murdock?
If Fox News is not subsidizing the Glenn Beck show and Chairman Murdock is not personally funding it, then funding is coming out of a News Corp budget. What form does the company expect the return on investment to take? Better relationships with the current government? A better Federal regulatory environment?
The Wall Street Journal is still an advertiser on the Glenn Beck show, does this mean that the marketing budgets for News Corp in-house properties have been told to subsidize the Beck show by News Corp management?
P.S. See Spocko v. talk radio hosts in the New York Times for a bit about me