Fox Family Worldwide, Inc. History

Company History:

A leading broadcaster to a global audience, Fox Family Worldwide, Inc. is a family-oriented entertainment company that develops, acquires, produces, broadcasts, and distributes television programming and motion pictures. Originally the Fox Children's Network, which debuted in 1990, Fox Family Worldwide blossomed into a multifaceted, broadly based broadcasting network during the 1990s under the guidance of Margaret Loesch and Haim Saban. Part of Rupert Murdoch's labyrinthine media empire, Fox Family Worldwide comprised the Fox Family Channel, the Fox Kids Network, Saban Entertainment, and Fox Kids International.

Origins

Although few outside observers believed it could be done, Australian media mogul Rupert Murdoch created a successful fourth television network in the United States, which at last broke the grip held by the country's three national heavyweights, American Broadcasting Corporation (ABC), National Broadcasting Corporation (NBC), and Columbia Broadcasting Station (CBS). Murdoch's success with Fox Broadcasting Company set the stage for his bold forays into all facets of the commercial and cable television industry, all of which were governed by The News Corporation Limited, the company Murdoch presided over as chairman of the board. From within the vast media empire superintended by The News Corporation Limited, emerged a new television broadcasting entity in 1990, a network christened the Fox Children's Network, which proved to be the foundation upon which Fox Family Worldwide, Inc. was built. Fox Children's Network, organized by Murdoch's maverick Fox Broadcasting Company and most of the network's member stations, set out to provide television programming targeted at children, beginning with a broadcast schedule consisting of 5.5 hours of programming that aired on weekdays and Saturday mornings. Both the range of Fox Children's operations and the number of hours of programming it offered increased in the ensuing years, as the fledgling effort to tap into the market for children's television shows blossomed into Fox Kids Worldwide, Inc.

The leader of Fox's entry into children's programming and its recognized founder was Margaret Loesch, who demonstrated considerable skill in transforming the network into a market share contender. The task assigned to Loesch was similar to the objective pursued by Fox Broadcasting Company: entice viewers away from the entrenched broadcast networks. Toward this goal, the subsidiary emulated its parent, stealing away enough viewers to legitimize itself as a formidable force in its industry. Once the network had gained a foothold and established itself as a genuine player in its market, the next objective was to secure a ratings winner that would enable the network to charge top advertising rates. For roughly two years, the network searched for the program that would lift it to the top of its market, and scored its coup with the 1992 debut of "X-Men," an animated program produced by Saban Entertainment, Inc. In February 1993, during the month-long "sweeps" rating period when advertising rates were determined, "X-Men" ranked as the winner, giving Loesch and Fox Children's Network their first ratings crown and breaking the stranglehold held by the major networks on Saturday mornings. Once the network rose to its dominant position, it never looked back. Shortly after "X-Men" captured the hearts of young viewers, Loesch aired another new children's program that obliterated every record in children's television history. The program ignited a powerful trend that could rightly be termed a phenomenon, making Fox Children's Network the preeminent children's broadcaster in the country.

On August 28, 1993, the "Mighty Morphin Power Rangers" debuted on the Fox Children's Network, quickly sparking incredible popularity among young viewers that led to unprecedented ratings and an armada of merchandising paraphernalia. Within several weeks after its debut, the half-hour "live-action cartoon" became the most popular children's television show in the country. Among viewers between two and 11 years old, the "Power Rangers" earned a record-setting 73 share. During one week in October 1994, the program averaged a previously unfathomable 91 share among boys aged six to 11. Once the program demonstrated its dominance in the United States, the "Power Rangers" frenzy swept into foreign markets, ascending to the number one ranking among children's television series in a host of countries, including France, Canada, Italy, Germany, and Israel. The popularity of the show was staggering, establishing a new benchmark for other networks to pursue, but the ratings earned by the television program represented only a portion of its power.

Aside from attracting legions of loyal viewers, the "Power Rangers" represented a mighty revenue-generating engine capable of producing cash outside the realm of television. The Power Ranger characters were cultural icons, selected as the national teen ambassadors of D.A.R.E., the United States' largest anti-drug and anti-violence program, which targeted children in thousands of schools throughout the nation. The popularity of the show's heroes spawned a line of toys that represented more than $1 billion worth of merchandise available to consumers worldwide. A $3 million live stage production called "Mighty Morphin Power Rangers Live" was put on tour, eclipsing all-time box office records for family entertainment by grossing nearly $30 million in 82 North American shows between 1994 and 1995. As plans were being developed for a follow-up tour of the stage production that would include shows in Mexico and Australia, Mighty Morphin Power Rangers: The Movie debuted under distribution by 20th Century Fox, grossing nearly $40 million during its first month.

Mid-1990s Alliance with Saban

"Power Rangers" became a legendary television program, and like "X-Men," the show was produced by Saban Entertainment, a broadly based entertainment organization that had helped Loesch carve a lasting place for Fox Children's Network on the airwaves. The ties between Saban Entertainment and Loesch's network were strengthened considerably when the two organizations formed a strategic alliance in 1995. A short time later, Saban Entertainment and Fox Children's Network consolidated, which gave rise to the formation of Fox Kids Worldwide, Inc., the immediate predecessor to Fox Family Worldwide. The central personality behind Saban Entertainment was its founder and most senior executive, Haim Saban. Saban's growing influence over Fox Children's Network and its parent company, Fox Kids Worldwide, Inc., engendered controversy and tumult during the late 1990s, changing the face of Fox's children's television network.

Saban, an Israeli born in Egypt, displayed his entrepreneurial bent early in life, employing a crew of boys to clean barns near the agricultural school he attended as a 14-year-old. Later, when he was in his early 20s, Saban joined a band, then put away his musical instrument to become the band's manager. Saban's passion for music and his penchant for the business world led to a quick rise in his country's music industry. By the age of 25--three years after he had joined a local band--Saban was the leading music promoter and manager in Israel, holding sway as the head of his own company, Saban/Tait Productions. Through his company, Saban managed several well-known bands and arranged concert dates in Israel for such popular U.S. music artists as Jose Feliciano and Blood, Sweat, and Tears. Fast on the rise, Saban appeared headed for considerable fame and fortune as an Israeli music mogul, but the Yom Kippur War in 1973 cut short his promising career. Saban tried to promote several special music events in the wake of hostilities, but all were disappointing ventures. Unable to rekindle the success he had enjoyed earlier, Saban left Israel with $1,500 in his pocket and resettled in France.

Shortly after arriving in France, Saban convinced a backer to finance the production of a record featuring a nine-year-old boy named Noam Kaniel, who sang in French. The record went platinum, selling two million copies, which gave Paris-based Saban Records an encouraging start in the business world. For Saban, success bred further success, making Saban Records the leading independent recording company in France seven years after it was started. Within that period, Saban Records had produced 15 gold and platinum records, but the ambitious Saban wanted more. One year after forming Saban Records, he showed his skill in other business areas by diversifying into television soundtrack recordings. His company's first recording was the soundtrack to the Japanese animated television series "Goldorak," which sold more than 3.5 million copies.

Saban registered further success by creating foreign soundtracks to popular American television shows such as "Dallas," "Starsky & Hutch," and "Hart to Hart," selling different versions for French, Spanish, and Latin American broadcasters. Next, he began producing soundtracks for children's animated television programs in the United States, selling the soundtracks to international markets. By the beginning of the 1980s, a Saban empire was taking shape, particularly after the 1980 formation of Los Angeles-based Saban Entertainment, which began producing music for U.S. television series. Another petal to the blossoming empire was added when Saban began producing television programs. In 1985, he sold his first in-house production to NBC, a program titled "Kidd Video" that mixed live action with animation. "Kidd Video" proved to be an unequivocal success in the United States and ultimately was syndicated in more than 70 countries.

Such were the antecedents to Saban Entertainment's production of "X-Men" and the "Mighty Morphin Power Rangers." The partnership between Saban Entertainment and Fox Children's Network in 1995, however, augured a new era for Saban, one that would include the stewardship of a television network, which represented a meaningful leap from his previous role as a supplier of programming to television networks. One year after the alliance between Saban Entertainment and Fox Children's Network was cemented, the two companies consolidated and Fox Kids Worldwide, Inc. was created, its mission to oversee the operation of both Saban Entertainment and Fox Children's Network.

Owned equally by Murdoch's The News Corporation Limited and Saban Entertainment, the newly created Fox Kids Worldwide sent a reverberating shockwave throughout the U.S. television industry with its June 1997 announcement that it was acquiring International Family Entertainment. The acquisition, valued at nearly $2 billion, included International Family Entertainment's principal asset, cable television's widely popular The Family Channel, which provided family-oriented programming to more than 72 million U.S. television homes. The transaction, completed in September 1997, caused a considerable stir at Fox Kids Worldwide well before any final papers were signed. In July 1997, a management shakeup occurred that included Loesch. She was promoted to vice-chairman, but common consensus both within and outside the company pointed to the exact opposite of a promotion. With no staff responsible for reporting to her and with the ephemeral duties of the company's "global strategist," Loesch had effectively been removed from all operations. She was "blindsided," according to one colleague, and many inside the company did not expect her to return from a month-long vacation. Saban, along with top executives at Murdoch's The News Corporation, apparently had decided to move toward the future without the help of Loesch.

Critics and proponents alike explained Loesch's "promotion" by noting that despite the popularity of the shows she had aired, she had never delivered a big hit with merchandising opportunities that the company owned. Her ouster, these same sources reasoned, was signaled by the inclusion of Saban as a partner and the billions of dollars at stake in the International Family Entertainment acquisition. Senior executives close to Murdoch were anxious about the mega-acquisition, desirous of a "business-first" leader, and Saban was renowned for running "his own ship" and bestowing little authority to his second-in-command. Other Fox Kids Worldwide executives were shown the exit door in July 1997, but Loesch was the most prominent personality to suffer from the company's ambitious moves in the late 1990s.

1997 Acquisition of The Family Channel Spawns New Company

The assimilation of International Family Entertainment's The Family Channel into Fox Kids Worldwide's operations, led to a significant corporate name change in May 1998 when Fox Kids Worldwide changed its name to Fox Family Worldwide, Inc. Beneath the corporate umbrella of Fox Family Worldwide were a number of different operating companies, including the Fox Family Channel, Fox Kids Network, Saban International, and Fox Kids International, which comprised dedicated cable and satellite channels that broadcasted programming to 30 countries. Saban, chairman and chief executive officer of the newly named company, explained the reasoning behind the name change, noting in a press release, "By embracing the 'Family' designation in our corporate name and broadening the demographics, we are more accurately acknowledging our target audience and business objectives." Saban added, "We are creating media for kids, their teenage siblings as well as their parents and grandparents--consumers of all ages." With this lofty objective directing the company's future as it prepared for the beginning of the 21st century, Fox Family Worldwide moved forward, striving to offer enticing television programming to, quite simply, everyone.

Principal Subsidiaries: Fox Family Channel; Fox Kids Network; Saban Entertainment; Fox Kids International.

Further Reading:

Schmuckler, Eric, "Tough Times for Fox Kids: with Saban Now in Charge, Company Faces Pressure on Several Fronts," MEDIAWEEK, August 18, 1997, p. 8.

Source: International Directory of Company Histories, Vol. 24. St. James Press, 1999.

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