NEW YORK — Rupert Murdoch's Fox Broadcasting Co. has lost $99 million in the past fiscal year as it has struggled to become a fully established competitor to the three major television networks, its corporate parent has disclosed.
The losses for the fiscal year that ended last June 30 are largely due to the heavy costs of scrapped programming and bring the network's losses to about $140 million over the first 18 months of its 23 months of operations, according to industry analysts. "These are striking numbers," said one Wall Street analyst.
Nonetheless, many securities and advertising agency analysts also noted that Fox's losses appear to be narrowing as the network has recently had more success in lowering its costs and improving its ratings. Fox executives are said to be estimating losses of about $35 million for the current fiscal year, although many on Wall Street believe the figure will come in closer to $50 million.
Fox did not respond Friday to requests for comment on the losses, which were disclosed in the annual report put out by News Corp., the diversified communications firm that is Fox's corporate parent.
19 Series Produced
Fox Broadcasting currently offers 10 1/2 hours of programming each week, including full prime-time lineups on Saturday and Sunday evenings and the one-hour late-night program "The Late Show," which is run Monday through Friday.
The 19 series that have been produced for Fox so far have included such embarrassing belly-flops as the costly "Mr. President," which starred George C. Scott, and "The Dirty Dozen." A number of Fox's series were pulled after only a few episodes because of low ratings.
Also painful has been Fox's experience with "The Late Show," which has continued to struggle, though many observers thought it might steal younger late-night viewers from NBC's "The Tonight Show" with Johnny Carson. "The Late Show" has had a number of formats and hosts, including Joan Rivers.
The network's losses also have been swollen by the expense of "make goods," the compensatory ad time that it must give advertisers when audience shares fall below their projected sizes, said Jeffrey Russell, an analyst with the Drexel Burnham Lambert investment firm.
But analysts point to such newer shows as "America's Most Wanted" and "It's Garry Shandling's Show" as evidence that the network can lower costs and improve ratings. The two shows' costs are less than 50% of the average cost of TV sitcoms, said Tim Horkins, analyst with Bain Securities, an Australian investment bank.
Speculation on Expansion
The low-budget "America's Most Wanted" describes the case histories of some of the nation's most notorious unsolved crimes and has recently garnered increasingly high ratings. It is the model of other new, inexpensive Fox programming, including "Beyond Tomorrow," which explores life in the future, and "The Reporters," a quasi-documentary that examines freak events.
Edward Atorino, an analyst at the Smith Barney, Harris Upham investment firm in New York, said some analysts recently have interpreted top News Corp. executives' comments to suggest that the company might abandon the network if losses continue for several more years. But he noted that Murdoch seems to be planning to expand the network's offerings with new programming on a weeknight and perhaps other new shows.