Fox Sports "will definitely have to keep" broadcast rights to the AFL, News Corp chief financial officer Bedi Singh said, adding he doesn't expect a British-style bidding war.
News Corp Australia owns Fox Sports, the current AFL broadcast rights holder with Foxtel, Seven West Media and Telstra.
That five-year $1.25 billion deal expires at the end of 2016 and Mr Singh said he expected negotiations for the fresh agreement to "begin shortly".
The AFL has told the market it values its next broadcast rights deal at $1.75 billion over five years, and is understood to have had informal chats with the television networks late last year.
Mr Singh said the AFL "was the big one" in terms of securing broadcast rights and Fox Sports would need to retain it – but at a cost.
"It's all about we have to drive the bottom line at Fox Sports, so we will definitely have to keep these rights but I think we have to look at other levels in terms of cost efficiencies and other things where we try to maintain the profitability," Mr Singh told the Morgan Stanley Technology, Media & Telecom Conference at San Francisco on Tuesday (Australian time).
"The key is we want to do things that are economically sensible. I don't think we are looking at getting into negotiations where you see the kind of stuff that's happening in the UK hopefully."
Mr Singh was referring to the record £5.136 billion ($10.17 billion) Sky and BT paid last month for live Premier League TV rights for three seasons from 2016-17. This was a 70 per cent increase on Sky at BT's current £3 billion deal.
Mr Singh said News Corp Australia was fortunate it didn't face the same sort of price inflation because Fox Sports bid with Foxtel, which is owned by News and Telstra.
"The situation isn't as bad as the markets in Britain and the US because the good news is in Australia is ... Telstra, the big telecom company, is our partner in Foxtel, and Foxtel is a partner with Fox Sports in going after sports rights.
"That tends to mitigate the inflation factor. But clearly I think there will be some."
Bidding is set to start at about $1.5 billion for the AFL rights. Some analysts have told Fairfax Media that the deal could hit almost $2 billion.
Seven West Media has maintained a "polite silence" about the upcoming negotiations but chief executive Tim Worner declared late last year that Seven would make a "sensible" decision when it comes to reapplying for the AFL rights.
"There's no 'whatever it takes', you know. There are sensible decisions, and we'll be making a sensible decision," Mr Worner said at the time.
Meanwhile, a gulf is emerging between Rupert Murdoch's "quality newspapers" and mass market tabloids when it comes to circulation growth, Mr Singh said.
Mr Singh said circulation growth was "challenging "across the company's mass market titles, which include The Sun in the UK, the New York Post, and in Australia the Herald Sun and Daily Telegraph.
"Certainly there's a distinction emerging between the quality end of our newspapers around the world, which are growing, and then you have the mass market where the jury is still out," Mr Singh told the conference.
"We're experimenting. We're seeing how things will go."
Revenue from News Corp's overall newspaper business slumped 6 per cent or $89 million, in the quarter ending December 31 last year, while advertising revenue dropped 9 per cent.
