Twenty-First Century Fox (NASDAQ:FOXA) is a diversified media and entertainment company. Investors have been grappling with declines in reported US ratings across the media ecosystem as consumers increasingly consume content on currently unmeasured platforms (e.g. Apple TV, tablets, etc.) or through non-traditional distributors (e.g. Netflix). Although improvements in measurement are on the horizon, Fox is able to evolve its monetization strategy among broader changes in media distribution by owning their own content. In contrast to ratings challenges for general entertainment, sports content has remained a notable exception, and we remain attracted to Fox’s enviable position in sports across its broadcast and regional sports networks. Lastly, despite the well-publicized headwinds created by a stronger US Dollar, we continue to like Fox’s highly desirable portfolio of international assets that can continue to deliver both affiliate and advertising growth. These elements continue to generate healthy free cash flows that we believe management will allocate wisely to grow per share value.
From Wallace Weitz (Trades, Portfolio)'s 3Q 2015 commentary.
