News Corp. calls itself a diversified entertainment company, and reports its operations under eight major businesses — Filmed Entertainment, Television, Cable Network Programming, Direct Broadcast Satellite Television, Magazines & Inserts, Newspapers, Book Publishing, and Other Services. It has a strong presence in the U.S. local television market (Fox Broadcasting and 35 local stations), broadcast satellite television (DirecTV), and cable programming (Fox News channel, Fox Cable networks).

Within the cable network division of News Corp., Fox News plays a much larger role than either CNN or MSNBC are playing in their parent groups. Not only has it become the most watched cable news channel in the U.S., it is also the most successful of News Corp.’s American cable channels, which include FX, Fox regional sports networks, and the Fox Movie channel.

The year also saw News Corp. undergo its own internal political drama. Rupert Murdoch’s eldest son, Lachlan , quit his executive posts in late July 2005. Published reports indicated that clashes between father and son, over Rupert Murdoch’s hands-on involvement and Lachlan ’s role in the company, contributed to the resignation.⁵ [1] But the business’s immediate finances were not depressed by the departure. In August 2005, the company reported that revenues had risen 12 percent and net income 67 percent for the quarter at the Fox movie and cable network divisions. Net income was reported to be 22 cents a share, compared to 15 cents a share in the previous year, and well ahead of analysts’ expectations.6 [2]

Roger E. Ailes, chairman of Fox News Channel since its inception, was given the additional title of chairman of Fox Television Stations. His deputy at Fox News, Jack Abernathy, had been made CEO a year earlier, in 2004. Those changes at the management level reflected the growing influence that Ailes, commonly acknowledged to be the reason for Fox News channel’s successes, has in News Corp. He now reports directly to Peter Chernin, CEO and president of Fox Television. Indeed, according to a New York Times article in August 2005, his influence in the organization almost parallels Chernin’s.7 [3]

In October 2005, Sharri Berg, considered a close Ailes loyalist, was promoted to a newly created job of senior vice president of news operations for Fox television stations. She also kept her job as vice president of news operations at Fox News. In her dual role, she is expected to ensure collaboration and operational synergy between the cable news channel, the local news stations, and the larger Twentieth Century Television.

The management changes also emphasize the focus News Corp. has on its U.S. news business, where it hopes to emulate the success of the cable channel in the local television market. As Media Week magazine put it, “ Just as Fox shook up cable news, Fox’s TV stations group is looking to reinvent local television” (see Local TV Ownership [4]).8 [5] Ailes’s appointment and those of his team indicate that News Corp. considers Fox News a centerpiece and hopes to leverage its resources and strengths for its local programming strategy.

Unlike its competitors, Fox News does not have an international service.9 [6] It offers only its domestic channel, which is distributed in some form in 71 countries. Its news distribution service is called Fox NewsEdge.10 [7] In 2005, the executives at Fox News got more aggressive about distribution in other countries, branding theirs as the only “American” news network with worldwide distribution. That was in contrast to CNN International, which bases a significant portion of its foreign news operations in the regions where they are aired.

According to News Corp.’s annual report, released in June 2005, it had had some success in its global effort. Fox News, the report indicated, had secured new international distribution deals with cable systems in Germany, Iceland, Colombia, El Salvador, Japan, Mongolia, and Singapore. The Canadian government had also approved the distribution of Fox News.