Fox Says Distribution Fees Make-Up Greater Share of Revenue

While it continues to see strong advertising revenues, Fox Corp's distribution revenues are taking greater share of its overall business, reports Mediapost.

At the company, over the last few years, advertising-to-distribution revenue share was about 50-50. “That has shifted to about 45-55, advertising-to-distribution,’” said Lachlan Murdoch, executive chairman and chief executive officer of Fox Corp., speaking at the Morgan Stanley Technology, Media & Telecom Conference. Still, he adds: “Advertising has remained very strong.”

Even with cord-cutting, distribution revenues (cable carriage and broadcast retransmission fees) continue to grow at Fox, especially on the strength of its Fox News Channel. Murdoch says the company doesn’t position itself as competition against other cable TV networks -- but instead, compares itself to broadcast networks.

“We are an essential part of the bundle,” he says. “When we look at pricing of distribution, we are competing in ratings with the broadcast networks. We don’t compare ourselves to other cable channels. It is almost broadcast retransmission pricing.”

Murdoch also touts major advertising growth at Fox News Channel. Not only is overall viewership climbing again, but in particular, certain political-minded viewers that one might associate with its competitors CNN and MSNBC.

“We have more Democrats and Independents [politically minded viewers] watching Fox News than watching MSNBC or CNN... Advertisers have noticed that, and we have a broader array of advertisers than we ever had before," Murdoch says.

Heading into the upfront advertising selling season, Murdoch says, current TV scatter pricing for news content and sports TV programming on the Fox Television Network and Fox Sports channels is 20% to 25% higher than last year’s pricing.

Also for this year, Murdoch expects political advertising for this midterm election cycle to best the results the last time around in 2018, when Fox Corp. posted a total of $180 million on a company-wide basis.

Fox Corp., now three years old, continues to hone its national TV sports and news focus, coming primarily from its Fox Television Network and Fox News Channel, respectively.