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The earnings, for fiscal Q1 of 2022 (the quarter that ended Sept. 30), saw the company have revenues of $3.05 billion (up 12 percent year-over-year), and net income of $708 million (down from $1.12 billion a year ago, which was due to a onetime payment from Disney).
Advertising revenue rose to $1.13 billion for the quarter, up from $969 million a year ago, when COVID-19 had impacted the availability of live sports and entertainment programming, and when many advertisers were still reluctant to return to TV.
On the company’s earnings call, CEO Lachlan Murdoch said there was a “healthy national advertising market” led by sports betting and helped by a fully stocked programming schedule.
“Audiences are migrating to live news, sports and streaming, underscoring the three pillars of our strategy,” Murdoch added.
Sports and digital were key themes in the earnings report, not only for their contributions to the company’s bottom line, but also as a higher source of costs, as the company invests in new streaming offerings like Fox Nation and Fox Weather.
The cable segment, which includes Fox News and Fox Sports 1, saw its affiliate and advertising revenues rise only by the mid-single digits year-over-year, due to contractual carriage agreements and Fox News ratings. However, the gains were offset by a particularly strong quarter a year ago, when the 2020 election contest was in full swing.
Murdoch said they expect affiliate revenues to continue to rise, as the company is keeping its NFL games on linear TV and isn’t making them to stream in any subscription offering, unlike competitors.
“What drives the sports business is first and foremost live sports and live sports content; we believe the best place for our premium sports is on our broadcast networks,” he said. “It drives the most value for us, it drives the most value for our affiliates.”
And the company plans to continue investing in sports, announcing a deal Wednesday to acquire the 2024 and 2028 UEFA European Championships, as well as more than 1,500 UEFA matches.
By contrast, the television segment, which includes the Fox broadcast network and Tubi, saw its affiliate revenue rise by 14 percent thanks to retransmission fee increases, and its advertising revenue soar by 22 percent, thanks to a significantly larger schedule of live sports, more entertainment programming on Fox, and Tubi.
Murdoch said “we program and monetize Tubi in distinct contrast with the SVOD approach of many other media companies,” citing the expensive programming and marketing costs of competitors with subscription offerings.
Last quarter, which was the company’s fiscal Q4 for 2021, the company had revenues of $2.89 billion and net income of $272 million. Since then, Fox also disclosed its executive pay, revealing that CEO Lachlan Murdoch and chairman Rupert Murdoch took pandemic-induced pay cuts, to $27.7 million and $31.1 million, respectively.
Murdoch also discussed the acquisition of TMZ for $50 million, saying that the company is a “perfect fit” at the company, which will be “bringing it to all parts of our portfolio.” TMZ “gives us an array of possibilities to expand a brand and platform that have long been a staple of our local TV stations,” Murdoch said, citing potential TMZ-branded local programming, and shows or channels on Tubi.
Looking ahead, Murdoch said that the rest of fiscal 2022 and fiscal 2023 look strong, with a Super Bowl, the end of its Thursday Night Football deal, and the 2022 midterm elections contributing to the bottom line.
“We believe the midterm election contests next year bode to be staggering,” Murdoch said, citing the strong Fox News ratings and the competitive implications of Tuesday night’s elections.
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