Mr. Ailes does not expect the company to leverage Fox News contract negotiations with pay-TV operators to support a Fox Business launch, because "he believes that the Fox Business content will stand on its own," the report read.
Fox News' long-term agreements with the likes of Time Warner Cable and Comcast are set to expire in the coming months. Mr. Ailes told UBS he believes Fox News is worth a monthly subscription fee of $1. UBS estimates that cable operators are currently paying 27 cents per subscriber, less than CNN, which earns an estimated 46 cents a subscriber.
In reference to current upfront negotiations, Mr. Ailes said the general cable advertising market is slowing, but that Fox News remains "well positioned to again generate record profits in the coming year." Upfront sales are expected to comprise 50% of total inventory, according to the note. Fox News Channel took in $454 million in ad dollars in 2005, up from $309 million in 2004. By comparison CNN brought in $437 million last year, while CNBC earned $307 million.
Commenting on My Network TV, Mr. Ailes told UBS that he believes the new broadcast network can generate $50 million in operating income with a 1.8 rating.