Strong advertising deliveries swung Fox Corp. back to profitability in the company’s last quarter (its fiscal Q3), after it had reported a loss in fiscal Q2.
Fox reported revenues of $3.45 billion, including advertising revenues of $1.3 billion, and reported net income of $290 million. That being said, profits were down from a year earlier, due to “increased digital investment, higher sports programming rights amortization and production costs, and the write-down of certain scripted entertainment programming,” the company said.
Growth was driven heavily by advertising, with ad revenue at its cable networks division (led by Fox News) up 20 percent year over year. That was despite “higher preemptions associated with breaking news coverage” at Fox News (the preemptions are mostly from coverage of the war in Ukraine).
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“Fox News was the engine of this advertising growth, with strong gains in ratings and pricing,” Fox CFO Steve Tomsic said on the company’s earnings call.
Also on the company’s earnings call, Fox CEO Lachlan Murdoch took a moment to acknowledge the “incredible bravery, sacrifice, and professionalism of the entire Fox News reporting team covering the war in Ukraine.”
“Journalism is rarely easy, and often it is very hard,” he added. “I am, we all are, deeply grateful for the tremendous work and extraordinary journalism [of the Fox News team].”
At the television division (led by the Fox network, Tubi and owned local stations) ad revenues were up 6 percent year over year, due to growth at Tubi, as well as one additional NFL game. The company also said “other” revenues in the division were up 17 percent due to TMZ, Studio Ramsay Global and MarVista Entertainment, all recent acquisitions.
“Our advertising growth was notably broad based,” Murdoch said on the company’s earnings call, noting that entertainment-focused Tubi, sports-driven Fox and Fox News all saw growth.
As was the case last quarter, a change in fair value in the company’s investment in the sports betting company Flutter caused some of the net income fluctuations (the investment was responsible for Fox’s loss last quarter).
Going forward, Fox projects that distribution revenues should rise as they come up for renewals. Fox, unlike its network competitors, does not stream its key programming (like the NFL) live online.
“We think that our key rights deserve to stay on our broadcast and cable networks exclusively,” Murdoch said. “It gives our league partners the most breadth and reach that they can achieve in viewership from their fans, but it is also key to our distribution strategy.”
