Fox Puts Its Money on 'Fun' Business Channel
Monday, October 15, 2007
NEW YORK -- It is the first rehearsal for the Fox Business Network, in a gleaming studio converted from a loading dock area, and two things are clear: These folks are determined to have fun, and they have an elastic definition of business news.
"More trouble for the falling pop star," anchor Dagen McDowell says, kicking off a segment on Britney Spears losing custody of her kids. She asks co-anchor Cody Willard: "How will it affect her earnings? . . . There's nothing cynical about protecting your assets. . . . When does the woman's money run out?"
Rupert Murdoch's new cable venture, which launches today, is determined to be different. It aims to put a Foxified sheen on even eye-glazing financial matters as it takes on the established CNBC and Bloomberg News.
"You don't have to reinforce the notion that business news is dull by being dull," says Neil Cavuto, the Fox anchor and senior vice president for business news. "I have no problem with entertaining folks. I have two boys, 5 and 6, who hate vegetables. If I put them in pudding, they'll eat the vegetables."
Few are betting their mutual funds against the venture, and the reason is Roger Ailes. The Fox News chairman, who is overseeing the launch, built his news channel from scratch, and in a half-dozen years outdistanced CNN and MSNBC in the ratings. Perhaps more important, it was Ailes who invented the modern CNBC when he ran that network in the early 1990s, creating such signature shows as "Squawk Box" and hiring Maria Bartiromo as his stock exchange reporter. Cavuto and several other Fox executives and anchors are also CNBC veterans.
The fledgling operation got a boost with Murdoch's $5 billion deal to buy the Wall Street Journal. While the paper is contractually obligated to provide business news to CNBC until 2012, Fox's lawyers are examining whether Journal reporters can appear to discuss other subjects.
The Fox team faces an uphill climb, and initially won't pay for the new network to be rated by Nielsen. CNBC is an established brand with identifiable personalities, from Jim Cramer to Erin Burnett and Bartiromo. Fox Business will debut in 30 million homes, one-third of those reached by CNBC. (The channel will be available in the Washington area on digital cable via Comcast, RCN and on DirecTV satellite.) Fox Business has a staff of 300, about half that of CNBC.
"It's a pretty well oiled machine," Kevin Magee, Fox's executive vice president and a CNBC alumnus, says of his old network. But he calls CNBC's coverage hard to decipher: "We'll try to de-jargonize it and speak in terms that people understand. I think they've gotten precious and they're very pleased with how smart they are, and their first mission is to tell you how smart they are."
CNBC President Mark Hoffman, for his part, rejects Murdoch's contention that "they're Wall Street and we're Main Street."
"We're for people who have a lot of money or aspire to make a lot of money," Hoffman says. "That can be any street in America, Europe or Asia where CNBC is delivered. . . . We don't try to be all things business. I wouldn't call us a general business network. We're an investor network."
CNBC has tried to broaden its appeal in recent years, adding shows such as "Mad Money" and "Fast Money." But it's wary of broadening too far. After he took over in 2005, Hoffman once saw anchor Mark Haines standing next to a kayak, promoting an upcoming segment on weekend fun. He concluded that the network had strayed too far from its market roots. "Narrower is better in cable," Hoffman says.
Indeed, his network, with its parade of banking analysts and fund managers, remains largely aimed at substantial investors. And that, of course, is where the money is. While business audiences are relatively small -- CNBC is averaging 210,000 viewers this year, up from 163,000 last year but way down from the Internet boom days -- their median household income is $160,000. That translates into the kind of advertising revenue that has generated $325 million in annual profits for parent company General Electric.