Hicks Equity Partners, a firm with ties to a co-chair of the Republican National Committee, is pitching investors on a new conservative news channel
For nearly two years, allies of President Trump have been exploring ways to build up a formidable competitor to Fox News. One target they recently zeroed in on: the fledgling pro-Trump cable channel Newsmax TV.
Hicks Equity Partners, a private-equity firm with ties to a co-chair of the Republican National Committee, has held talks in recent months about acquiring and investing in Newsmax, according to people familiar with the matter, part of a larger effort that could also include a streaming-video service.
Newsmax’s viewership has risen sharply since Election Day, as it wins over viewers loyal to Mr. Trump who are frustrated that Fox News and other networks have declared Democrat Joe Biden the president-elect. Newsmax hosts have promoted Mr. Trump’s claims that the election was stolen. No evidence of significant fraud has emerged or been presented.
It is unclear whether Hicks Equity’s talks with Newsmax will move forward. The discussions show the belief among some investors and allies of Mr. Trump that there is room to mount a real challenge to Fox News, which has dominated the conservative media landscape for two decades.
Mr. Trump and Fox News have had a complicated relationship. The network’s opinion hosts are highly supportive of the president. He devours Fox content, tweets about it and is influenced by it in policy and personnel decisions, aides say. Yet he spars with the network when he feels it is criticizing or undermining him.
The election’s aftermath has stoked those tensions: Mr. Trump has criticized Fox News on Twitter while promoting segments on the network favorable to him and heaping praise on Newsmax and One America News Network, another small, far-right channel.
Creating a television network to rival Fox News, which has led the cable-news ratings for years, is a longshot. Newsmax’s average prime-time audience jumped 156% to 223,000 viewers during the week of the election, according to Nielsen data, and last Thursday crossed one million from 7 p.m. to 8 p.m., about half of Fox’s audience during the time period. Sustaining those gains when interest in the election subsides won’t be easy. Fox averaged nearly six million prime-time viewers during the week of the election, about 22% higher than the previous four weeks.
The cable-TV business as a whole is under pressure as consumers increasingly “cut the cord.” Big media conglomerates are generally in a better position to weather that storm than smaller or independent competitors, because they have more leverage to extract monthly fees from distributors.
In an interview, Newsmax Media Chief Executive Chris Ruddy said he has had many discussions with interested parties over the years looking to buy or invest in Newsmax. “Newsmax never had any deal with the Hicks group, and if it’s true they were using our name for the purposes of capital fundraising, that is wholly inappropriate,” he said.
A spokeswoman for Fox Corp. had no comment. The company’s chief executive, Lachlan Murdoch, said on a recent earnings call that the company “loves competition.”
The Trump campaign declined to comment. The White House didn’t respond to a request for comment.
People close to Mr. Trump say he is focused on the results of the election, and his pending litigation about it, and there are no signs he is taking any steps of his own to launch a network.
If Mr. Trump wanted to create his own media business from scratch, the most likely avenue would be a subscription streaming service, some industry executives said, and he could likely create a viable business, though perhaps not one with the scale of a TV network. “I think for someone like Trump it’s an easy million,” said Chris Balfe, a partner at the digital media consulting firm Red Seat Ventures, referring to the number of subscribers Mr. Trump could launch with. Typical industry prices for such services can run from roughly $6 to $10 a month.
Fox News already has a streaming-video service, Fox Nation, that offers a combination of opinion programming and entertainment. The network declined to say how many subscribers Fox Nation has, but has said 80% of people who sample the service convert to paying customers.
Trump supporters’ dissatisfaction with their media choices after the election have created opportunities on digital platforms as well. Libertarian-leaning social-media platform Parler became the most downloaded app on both Android and Apple devices for most of last week thanks to conservatives’ anger at Facebook and Twitter.
The Newsmax pursuit is being led by private-equity deal-making pioneer and Trump supporter Thomas Hicks. The family’s private-equity outfit, Hicks Equity Partners, is looking to raise at least $200 million for its efforts in right-leaning media and has spoken with wealthy conservative families about the deal, people familiar with the matter say.
One of Mr. Hicks’s sons, Thomas Hicks Jr., co-chairs the Republican National Committee. He is unlikely to participate in any deal while he holds an RNC post, said a person close to the Hicks family.
The Hicks family’s wealth stems from private-equity firm Hicks Muse Tate & Furst Inc., a leading media investor of the 1990s and 2000s. The Wall Street Journal reported early this year that Hicks Equity Partners was seeking a buyout of San Diego-based One America News Network, also known as OANN. Those talks have cooled in recent months, some of the people familiar with the matter said, though Hicks Equity still considers it a compelling target.
An acquisition of Newsmax, which is based in West Palm Beach, Fla., would be part of a larger plan to assemble a network of channels aimed at conservatives, according to a pitch that was made to investors. Another channel would provide family-friendly entertainment programming. The Hicks group has identified a team of executives who would help manage the network if the deal were completed, the people familiar with the matter said.
The Hicks group has been courting former Fox News stars, the people said. Earlier this year, the group held talks with former Fox News and NBC anchor Megyn Kelly about coming to One America News Network if the group succeeded in buying it, according to people familiar with the discussions. Ms. Kelly has turned down multiple offers to return to television so she could focus on building her own media company, according to a person familiar with her thinking.
Hicks Equity has also reached out to conservative donors and media competitors in recent months about putting together a streaming service that would challenge Fox from the right, according to people familiar with the situation.
A serious rival to Fox News would be a threat to Fox Corp. If a competing network were to take 20% of Fox News’s audience by 2024, it could sap about $200 million in annual profit from the company, according to a report from media analyst Michael Nathanson.
Launched in 2014, Newsmax TV says it is available in 70 million cable homes, giving it substantial room to expand its audience. Mr. Ruddy, the network’s CEO, is a friend of Mr. Trump’s and speaks to him often. He is a member of Mr. Trump’s Mar-a-Lago Club in Palm Beach, Fla.
Mr. Ruddy said after Fox News called Arizona for Mr. Biden on Nov. 3, and other networks didn’t confirm that projection, he began hearing from Trump supporters who said the call was premature. “There was a perception that they were trying to help Biden,” Mr. Ruddy said.
Several White House aides called Fox News to complain about the call, people familiar with the situation said.
Jared Kushner, a senior White House adviser and the president’s son-in-law, called Fox Corp. Chairman Rupert Murdoch and urged him to revisit it. Mr. Murdoch dismissed the request, a White House official said.
Fox News’s decision desk stood by its call; Arizona turned out to be very close, but all major networks have now called it for Mr. Biden.
Newsmax hasn’t called the election for Mr. Biden. “If it’s that close, we should wait until the states certify before we as a media organization should project one or the other the winner,” Mr. Ruddy said. He said Newsmax will declare the president based on when states certify winners later this month.
Mr. Ruddy said he believes Mr. Trump will also come around. “My experience is, he will accept the result of the state certification. He may not be happy. I think he will support a smoother transition than what appears to be the case now.”
I ask is it better for many far right wing reality denying media for older people a good thing for the country and for the rest of us normal in reality people? Could it dilute the influence of all of them? Could it help wean people off the most wild conspiracy channels? Let me know what you think of this. Hugs