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Fox Corp. reported revenue in its fiscal first quarter of $3.19 billion, up 5 percent from the same quarter a year ago, owing to higher affiliate fees and a strong advertising environment, led by a record-shattering midterm elections advertising haul.
That being said, the company reported net income of $618 million, down from $708 million a year earlier.
The strong quarter came as the company is in talks to merge itself with the other major piece of the Murdoch family empire: News Corp., the owner of Dow Jones, The Wall Street Journal, and Australia’s Foxtel.
“The Special Committee has not made any determination at this time, and there can be no certainty that the company will engage in such a transaction,” Fox said in its quarterly report. Fox CEO Lachlan Murdoch said on the earnings call that he would not comment further on the proposal.
And it comes ahead of what Murdoch called “a notable fiscal year of prominent scheduled events across the company,” including the FIFA World Cup and the Super Bowl.
Fox has benefitted from the midterms through its Fox TV stations, which have seen record-breaking political ad buys in a number of states, as well as at Fox News, which is among the most watched channels on TV, and which also benefits from political ad spending.
Advertising revenue was $1.2 billion in the quarter, up 8 percent from a year earlier, and on the quarterly earnings call Murdoch said that over two-thirds of the company’s ad revenue came from live news and sports.
Fox has also invested heavily in streaming through its free ad-supported platform Tubi and its Fox Nation streaming service, with the company citing Fox Nation as a driver in its “other” reporting segment. On the call, Murdoch said that the quarter was the first time that Tubi revenue exceeded Fox entertainment revenue in any meaningful way.
However, with macroeconomic concerns swirling, Murdoch added in a statement that the company is proceeding with caution.
“While we are mindful of current macroeconomic conditions, the durability of our brands and Fox’s ability to deliver audiences at scale position us well to navigate this uncertainty while continuing to create value for our shareholders,” he said.
He elaborated on the earnings call, telling analysts that “yes, the broader national advertising market is looking more fluid compared to the time of our last earnings call.”
“While we have observed some softness in linear entertainment scatter marketplace … [that softness was] more than offset by digital entertainment strength delivered by Tubi.”
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