Fox Corp. reported strong quarterly earnings on Wednesday as the TV business continued to recover from the previous year when the pandemic was ‘destroying’ the advertising and TV business.
Earnings for the first quarter of fiscal 2022 (the quarter ended Sept. 30) saw the company have revenues of $3.05 billion (up 12% year-over-year) and net income of $708 million (below $1.12 billion from the previous year, due to a one-time Disney payment).
Advertising revenue increased to $1.13 billion for the quarter from $969 million a year ago when COVID-19 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 conference call, CEO Lachlan Murdoch said there was a “healthy national advertising market” led by sports betting and aided by a fully-stocked programming schedule.
“The audience is shifting to live news, sports and streaming, underlining the three pillars of our strategy,” added Murdoch.
Fox Corp’s strongest segments
Sports and digital were key themes in the earnings report, not only for their contributions to the company’s results, but also as a higher source of costs, as the company invests in new streaming offerings such as Fox Nation and Fox Clima .
The cable segment, which includes Fox News and Fox Sports 1, saw its affiliate and advertising revenues rise only in the mid-single digits year-over-year due to Fox News contracts and ratings contracts.
However, the gains were offset by a particularly strong quarter a year ago, when the 2020 election contest was in full swing.
Murdoch said he expects affiliate revenues to continue to increase as the company is keeping its NFL games on linear TV and isn’t having them broadcast on any subscription offerings, 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 brings more value to us, more value to our affiliates.”
And the company plans to continue investing in the sport, announcing on Wednesday an agreement to acquire the 2024 and 2028 European Championships, as well as more than 1,500 UEFA games.
In contrast, the television segment, which includes Fox network broadcast and Tubi, saw its affiliate’s revenue increase 14 percent thanks to rebroadcast rate increases, and its advertising revenue skyrocket 22 percent thanks to significant programming. more live sports, more entertainment programming on Fox and Tubi.
Murdoch said “Programming and monetizing Tubi in distinct contrast to the SVOD approach of many other media companies,” citing the expensive programming and marketing costs of competitors with subscription offerings.
A good time for the company
Last quarter, which was Fox Corp’s fiscal fourth quarter in 2021, the company reported revenue of $2.89 billion and net income of $272 million.
Since then, Fox has also “revealed its executive compensation,” revealing that CEO Lachlan Murdoch and President “Rupert Murdoch” have had pandemic-induced salary cuts to $27.7 million and $31.1 million, respectively.
Murdoch also discussed the acquisition of TMZ for $50 million , saying the company is a “perfect fit” in the company. “TMZ gives us a matrix of possibilities to expand a brand and platform that has long been an experienced team for our locations and stations,” said Murdoch, citing potential local programming under the TMZ brand and programs or channels in Tubi.
Looking ahead, Murdoch said the rest of FY 2022 and FY 2023 looks strong, with a Super Bowl, the end of their Thursday Night Football deal and the 2022 midterm elections contributing to the results. financial.
Looking ahead, Murdoch said the rest of FY 2022 and FY 2023 looks strong, with a Super Bowl, the end of their Thursday Night Football deal and the 2022 midterm elections contributing to the results. financial.
