It seems like the market is concerned about a number of things:
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2) Cord-cutting which, in Fox's case, is less of a concern due to the live nature of their content. As the most recent VIC write-up notes, Netflix gave Fox a nod by stating that their live content is "more resistant to the rise of the internet."
In my view, this is the main concern. The narrative: Streaming video on demand and video games are fundamentally better products than linear TV, so eventually linear TV (and the cable bundle) won't exist, just as the horse as a mode of transportation effectively no longer exists. Fox currently gets almost all of its profits from FoxNews's position in the cable bundle and the affiliate fees that produces (along with reverse retrans from Fox Network's position in the cable bundle). FoxNews cannot monetize in the same way outside the bundle (e.g., DTC), so the company is based on a dying business model that will slowly bleed out and always look cheap. The Fox Network has many of the same problems, and you can't make money broadcasting sports because the sports leagues will suck out all economic profit.
Which parts of that are wrong?
I'm not saying you're wrong, but I disagree. Here's why:
Assertion: Streaming video on demand and video games are fundamentally better products than linear TV. Therefore, linear TV will not exist.
Although streaming VOD services are rapidly gaining share of entertainment content, I don’t think that’s the end of the world for Fox. I agree that linear is dying, but after the Disney sale, the value of Fox no longer lies in its entertainment content. The horse is the cable companies, not the live news/sports content. The rapid growth of YouTube TV suggests that the cable bundle isn't dead, it just needs another name ("live bundle"?). As for video games, I think news and sports compete for a different demographic. This is not a big threat.
Assertion: Fox News cannot monetize in the same way outside the bundle (DTC)
I would argue that in the long-term, Fox News will be able to monetize whatever value their users ascribe to their content. Has the value of live news/sports decreased? Personally, I don’t think so. Advertising impressions have not budged for both news and sports in the past 2+ decades. People continue to tune in. As terrible as this sounds, Fox stands to benefit from increased polarization and anger. As long as people want to consume Fox News/Sports in one way or another, Fox will be able to monetize them. What they're really selling is the value of their content. The value/quality of sports content is out of their control, but the value/quality of news content is entirely within their control.
Tuning into Ben Shapiro, Joe Rogan, Bill O’Reilly, or some other podcast/show certainly holds value (e.g. Spotify’s deal with Joe), but it is not a perfect substitute. I don’t know how else to put this but watching those guys just isn’t the same. There is a professional sharpness to Fox that, in my opinion, can’t be supplanted. It has unique appeal; in the way it presents news, how it says things half the country is thinking, how it stirs people's emotions and defends half of America. And there is an “officialness” to them that surprisingly hasn’t been mimicked in 18 years and counting. Paul Ryan sits on the board, they regularly have figures from the “establishment right” come on their show, it is a matter of ego for these people to say that they went on Fox News. Newt Gingrich recently went on the Ben Shapiro show and got around 63,000 views. Going on Hannity would get him 3.5 Million views. Even though guys like Ben and Joe are Fox’s competitors, it will be tough for them to build vast live news/sports capabilities. Fox has distinct organizational competencies built from decades of covering news/sports that simply can’t be mimicked with a chequebook. To think that Shari Redstone can somehow pull a rabbit out of her hat would be a stretch.
As for DTC and other online services, I'll use YouTubeTV as an example.. it costs $64.99/month which is around the nationwide average cost of expanded basic cable TV. Subscribers are growing rapidly (currently around 2 Million). Why wouldn't Fox be able to extract value from YouTube TV and the like? The entertainment content is causing bloating in the cable bundle, not the live content. I think people are still willing to pay for that.
Assertion: You can’t make money broadcasting sports because the sports leagues will suck out all economic profit.
I agree that this is possible but not probable. Sports leagues have a small set of customers that are capable of carrying out their broadcasts in a professional manner, i.e. Fox, CBS, NBC. This allows for potential price collusion. Leagues also want to deal with customers that have nationwide distribution; they care about money and reach. Big tech companies are viable competitors in this space, but not everyone can hook up their internet to their TV set yet, and many Americans don't have access to fast internet, etc. In other words, sports leagues have nowhere else to go and will have to deal with the big 3 networks for the foreseeable future. Assuming sports broadcasts are eventually wiped out of the picture for Fox, I don't think they are much less valuable because their news segment still makes the vast majority of FCF.