Fox $50m loss on Dominion settlement
May 9, 2023
Fox Corporation has reported financial results for the three months ended March 31st 2023.
The company posted total quarterly revenues of $4.08 billion (€3.7bn), an 18 per cent increase from the $3.46 billion reported in the prior year quarter. Advertising revenues increased 43 per cent, primarily reflecting the impact of Super Bowl LVII, a higher volume of NFL games and continued growth at Tubi. Affiliate fee revenues increased 3 per cent with 9 per cent growth at the Television segment. Other revenues were largely flat from the prior year quarter.
The company reported a quarterly net loss of $50 million as compared to net income of $290 million reported in the prior year quarter. The variance was primarily attrbiuted to charges associated with legal settlement costs at Fox News Media, partially offset by the higher fair value of the Company’s investments recognised as a gain in Other, net. Net loss attributable to Fox Corporation stockholders was $54 million as compared to net income of $283 million reported in the prior year quarter. Adjusted net income attributable to Fox Corporation stockholders was $494 million, an increase of $35 million from the $459 million reported in the prior year quarter.
Quarterly Adjusted EBITDA was $833 million, an increase of $22 million from the prior year quarter, as the revenue increases noted above were partially offset by higher expenses. The increase in expenses was primarily due to higher programming rights amortisation and production costs at Fox Sports driven by the broadcast of Super Bowl LVII and a higher volume of NFL games in the current year quarter, as well as increased digital investment at Tubi.
Executive Chair and Chief Executive Officer, Lachlan Murdoch, didn’t mention the settlement, but commented: “Our fiscal third quarter once again demonstrated the effectiveness of Fox’s strategy to leverage the power of compelling live events to deliver for our viewers, advertisers, and distributors at scale. During the quarter, the largest audience in US television history gathered to watch Fox Sports’ broadcast of Super Bowl LVII, underpinning our delivery of double-digit revenue growth, and providing a promotional gateway to Fox’s entertainment and news brands. Additionally, the momentum at Tubi continued in the quarter where its stellar growth has led to its emergence as the most watched Free-Advertising-Supported-Television service in the United States. Against a backdrop of macroeconomic uncertainty, our portfolio of leadership brands combined with our balance sheet strength position us well to allow us to focus on creating shareholder value for the long term.”
Cable Networks
Cable Network Programming reported quarterly segment revenues of $1.57 billion as compared to $1.58 billion in the prior year quarter. Affiliate fee revenues were broadly consistent with the prior year quarter as the impact of net subscriber declines was nearly offset by contractual price increases. Advertising revenues were $316 million as compared to $339 million in the prior year quarter as the continued impact of elevated supply in the direct response marketplace at Fox News Media was partially offset by the broadcast of the World Baseball Classic at Fox Sports. Other revenues increased $14 million or 10 per cent, primarily due to higher Fox Nation subscription revenues.
Cable Network Programming reported quarterly segment EBITDA of $792 million compared to $864 million in the prior year quarter. Expenses increased in the quarter, primarily due to higher legal costs at Fox News Media and higher costs associated with the second season of the USFL and the broadcast of the World Baseball Classic at Fox Sports.
Television
Television reported quarterly segment revenues of $2.48 billion, an increase of $655 million or 36 per ent from the amount reported in the prior year quarter. Advertising revenues increased $590 million or 61 per cent, primarily due to the broadcast of Super Bowl LVII and a higher volume of NFL games at Fox Sports, as well as continued growth at Tubi. Affiliate fee revenues increased $64 million or 9 per cent led by higher rates at both the Company’s owned and operated stations and third-party Fox affiliates.
Television reported quarterly segment EBITDA of $117 million, an increase of $82 million from the prior year quarter. Expenses increased in the quarter, primarily due to higher programming rights amortisation and production costs driven by the broadcast of Super Bowl LVII and a higher volume of NFL games at Fox Sports, as well as increased digital investment at Tubi, partially offset by lower programming costs at Fox Entertainment, including the absence of a write-down of certain scripted programming in the prior year quarter.