Rupert Murdoch's media conglomerate 21st Century Fox is betting big on its subsidiary Star to lead its international growth.
"Top opportunity continues to be international, led by Star, which clearly is going to lead a lot of our international growth," 21st Century Fox chief financial officer John Nallentold an industry summit over the weekend.
"One of the top priorities, uniquely for us is international. We've got a particular focus on growth outside the US. We continue to harness the assets we have in Star, FIC (Fox International Channels) and in Sky but we continue to be opportunistic to the extent we can outside the US," according to a webcast on the company's website.
Nallen was addressing an industry seminar in California last week.
Star India, which is a fully owned subsidiary of 21st Century Fox, broadcasts over 40 channels in seven languages, reaching more than 720 million every week across 100 countries.
Nallen further said Star is on target to achieve an EBITDA (earnings before interest, taxes, depreciation, and amortisation) of $500 million by 2018.
In April, James Murdoch, the present chief executive of 21st Century Fox, had said Star India is likely to earn operating income of $1 billion by 2020.
Morgan Stanley recently pegged Star TV's value at $11.2 billion.
The American brokerage estimated the fair market value of Star on the basis of rising ad revenue from India and said the firm contributed 11.3 per cent to the overall fair market value of 21st Century Fox.
As of June 2015, Star's earnings from entertainment business stood at $300 million.
"We feel confident about the $500-million target for 2018. It's coming from two factors -- one is continued growth of the entertainment business, which was the hallmark of the Star business. We get 23-24 per cent market share every night.
It's a market that is growing. In the last six months TV ad market grew 21 per cent, we over-indexed because of our strength," Nallen said.
"The second leg is sports, where big investment cycle is behind us. Going forward we have lumpy years because of the World Cup Cricket, but that won't interfere with us in getting our target. So we feel pretty good about it," he added.
Nallen ruled out major investment in Star in the near future. "Not much more investment (in Star). This year we grew the investment because we extended one of the sports franchises that we started, this local Kabaddi sport that has turned into a phenomenon in India. There is not a massive new incremental investment that we need for Star," he said.
Star India has so far invested over Rs 300 crore in the Pro Kabaddi League, including Rs 150 crore in its inaugural edition last year.
Source: The Economic Times