CEO Lachlan Murdoch: Fox Won Back Ratings

Fox News kept its parent company flush in the first three months of the year, notching a slight gain in profit and sales despite a drop in viewers, The NY Times reports.

Altogether, Fox Corporation beat Wall Street expectations with a sevenfold increase in profit to $567 million and a 6.5 percent drop in revenue to $3.2 billion compared with the same period a year prior. A change in how the company valued some of its assets was a key reason for the profit surge. Investors were looking for a $332 million profit and $3.1 billion in sales.

But revenue at most of its businesses dropped as fewer viewers tuned into the company’s cable channels and the Fox broadcast network, in part because Fox did not host the Super Bowl this year. Total advertising sales fell 24 percent to $1.2 billion, with the cable segment, primarily Fox News, seeing ad revenue drop 7 percent to $283 million.

Lachlan Murdock

Fox News still makes up the vast majority of Fox Corporation’s profits. The cable division that houses the news network generated $899 million in pretax income, accounting for 95 percent of the company’s total pretax profit. The company’s businesses include several sports cable networks and the free streaming platform Tubi.

Despite the drop in viewers at Fox News, the network benefited from contractually triggered rate increases that cable operators pay to carry the channel. Licensing fees rose 6 percent to $1.07 billion. Advertising fell despite charging higher ad rates.

The Wrap reports this primarily affected advertising revenues, which dipped form $1.57 billion last year to $1.20 billion. Additionally, a less-breakneck news cycle, with 2021 being an odd-numbered year and current president Joe Biden being significantly less scandalous than his predecessor, dragged down ad revenue at the cable networks, which pretty much means Fox News. It fell from $304 million a year ago to $283 million.

However, affiliate revenues increased $62 million or 6% as compared to the prior year quarter, driven by contractual price increases.

“The company continues to deliver operationally and financially with our year-to-date Revenues and EBITDA pacing well ahead of last year, despite the impact of COVID and the comparison against a Super Bowl year,” Fox Corp CEO and executive chairman Lachlan Murdoch said. “Consistent with our expectations, Fox News reclaimed its leadership position as America’s number one cable news network and the most watched cable network in primetime, while Fox Sports reached a landmark agreement with the NFL to extend our Sunday NFC rights package with expanded digital rights. These strategic milestones, coupled with a slate of complementary, high-growth, digital-focused assets, led by continued record growth at Tubi, provide a powerful platform to grow our business for the long-term.”