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National Geographic bought Up And Out By 21st Century Fox

National Geographic bought Up And Out By 21st Century Fox

Since 1888, the National Geographic Society has stood for science, discovery and storytelling. Its yellow-bordered magazine has served as the ultimate stage for award-winning photography, depicting the wonders of the world, and the group has supported pursuits as diverse as the underwater explorations of Jacques-Yves Cousteau and Jane Goodall’s study of chimpanzees in Tanzania.

Now, the nonprofit organization plans to continue that mission, backed by the Murdoch media empire.

In a deal announced on Wednesday and valued at $725 million, the National Geographic Society and 21st Century Fox are creating a for-profit joint venture that encompasses the National Geographic Channels cable television group along with National Geographic’s other properties. That includes its magazine and other print publications, studios, digital media, maps, children’s media, travel, licensing and e-commerce.

Fox will own 73 percent of the new venture, called National Geographic Partners, and the National Geographic Society will own 27 percent. The two owners will have equal representation on the board and share governance.

“What this really is about is creating a new company with the National Geographic brand at its heart,” James Murdoch, chief executive of 21st Century Fox, said in a joint telephone interview with Gary Knell, the chief executive of the National Geographic Society, who will be the first chairman of the National Geographic Partners board.

The National Geographic Society will continue to operate as a nonprofit organization. The $725 million from Fox will increase its endowment to about $1 billion and allow it to double its investment in science, research and education work.

The deal faced immediate questions over how that science-driven mission of National Geographic would fare now that it was in closer alignment with 21st Century Fox. Scientists have disputed comments about climate change made by Rupert Murdoch, 21st Century Fox’s executive chairman. Mr. Murdoch recently said on Twitter that he was a “climate change skeptic, not a denier,” adding that the United Nations would meet in New York with “endless alarmist nonsense.”

In response to the concern about conflicting outlooks, executives underscored that the agreement builds upon an 18-year partnership between the two groups for National Geographic Channels, a moneymaking venture of domestic and international cable TV channels available in more than 500 million homes in 171 countries. Mr. Knell said that during that time, Fox had not exerted “any sort of political or editorial interference.”

They added that Declan Moore, a 20-year veteran of the National Geographic Society, would work as chief executive of the venture. Susan Goldberg, editor in chief of National Geographic magazine, will continue in her role.

“I don’t think that they would be investing in this brand if it weren’t to keep the quality of what National Geographic stands for,” Mr. Knell said.

James Murdoch said he was personally committed to continuing the culture and the mission of National Geographic as it has existed. “It is a creative business we are in, and we are in creative alignment,” he said.

The partnership between the nonprofit organization and one of the world’s largest media companies comes about a month after the announcement of a partnership between the Sesame Workshop, the nonprofit group behind the children’s television program, and HBO, the premium cable network — signaling how both types of organizations are wrestling with similar challenges as digital transformation upends the business.

“Those same sorts of market forces that are changing the dynamics of the media space now, we are not immune to those,” Mr. Knell said. “How can National Geographic make sure that it has a place at the virtual table for every person interested in what we do?”

But while the Sesame-HBO partnership, which brings first-run episodes of “Sesame Street” exclusively to HBO and its streaming outlets this fall, helped ease funding pressures faced by Sesame Workshop, executives and analysts characterized the Fox-National Geographic partnership as more opportunistic.

”I don’t see this as a defensive move,” Mr. Murdoch said.

He called the Fox-National Geographic cable television venture “one of the most successful partnerships” that not only paid healthy dividends to the society and to Fox but also created programming that built the National Geographic brand around the world. He said the new company would expand on that partnership, creating a storytelling machine that would feed a proliferation of screens.

David Bank, an analyst with RBC Capital Markets, said that National Geographic provided Fox with the rights to an unusual collection of material that travels around the world and across digital platforms. He said the National Geographic channels could not only be bundled with Fox’s broader portfolio of sports, news, comedy, drama and other channels, to increase its leverage with TV distributors, but could also be part of a direct-to-consumer streaming offering in the long term.

“There are very few entertainment brands that travel cross border with as much brand equity as National Geographic,” Mr. Bank said.

The deal is one of the first major developments at Fox since James Murdoch was named chief executive in June. He said that the deal had been in the works for a number of months and that it was consistent with his strategy to focus the business “around big brands, building platforms around those brands, and making sure those brands matter in an increasingly competitive and digital environment.”




By Emily Steel

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