In a recent quarterly earnings call, Fox Corporation’s CEO Lachlan Murdoch revealed that Fox Sports played a pivotal role in driving higher consumption across all Fox brands in the last quarter. Consumption data indicated a 2% increase in viewership during the fiscal year’s first quarter, attributing this growth to Fox Sports. One standout event was Fox’s broadcast of the Women’s World Cup, where the thrilling U.S. versus Netherlands match set a record as the most-watched Women’s World Cup game ever on U.S. English language television.
Impact on profits
However, while sports programming continued to draw massive viewership, it came at a significant cost. The expenses associated with sports programming had a notable impact on the company’s profits, offsetting the revenue growth in its TV segment. Fox Corporation reported a net income of $415 million, marking a 33% decrease from the $613 million earned in the same period the previous year. Major expenses were attributed to the Women’s World Cup and the renewal of National Football League (NFL) rights.
Sports programming is known for being a consistent ratings powerhouse for TV networks. This year’s Super Bowl, broadcast on Fox, attracted a whopping 113 million viewers, ranking as the third-highest viewership of all time. However, the acquisition of sports programming rights comes with a hefty price tag, particularly as linear networks and streaming services compete for broadcasting rights.
Promising Results from ‘Tubi’
The company’s ad-supported streaming service, Tubi, which Fox acquired in 2020, showed promising results. Tubi’s monthly active users surpassed 70 million in September, up from the 64 million reported in February. Despite the success, Fox emphasized that Tubi would remain dedicated to providing entertainment content and had no plans to introduce live sports streaming.
In terms of ad revenue, Fox Corporation reported a 2% decline during the quarter compared to the previous year. This drop was attributed to the absence of political ads that were prevalent leading up to the midterm elections during the same period the previous year.
Commitment toward cable
Fox’s commitment to the traditional cable bundle remains unwavering, with the Fox News channel, known for its conservative-leaning content, continuing to thrive within this model. Despite the ongoing trend of cord-cutting, Murdoch expressed his confidence in the cable bundle, stating that it would remain the company’s largest and most significant revenue stream for years to come.
Analysts at Morgan Stanley echoed this sentiment, acknowledging that Fox remains relatively insulated from the challenges facing general entertainment linear TV but is not entirely immune. Fox Corporation’s ongoing success in sports programming, streaming services like Tubi, and its dedication to the cable bundle make it a prominent player in the evolving media landscape.
