Fox Reports Profit in Q3 Despite Decline in Ad Sales

Fox Corp. CEO Lachlan Murdoch announced impressive fiscal third-quarter earnings on Wednesday, surpassing Wall Street estimates with revenue reaching $3.4 billion and net income growing to $704 million. The surge in profits can be attributed to last year’s settlement at Fox News and a gain on the value of its USFL assets, which were merged with the XFL to form the UFL.

Despite the success, advertising revenue took a hit, dropping to $1.2 billion from $1.9 billion due to the absence of the Super Bowl in this quarter compared to last year. However, Murdoch assured analysts during a call that the company’s ad business was on the right track.

Murdoch highlighted positive advertising trends at Fox, particularly in the scatter market and early upfront discussions. He emphasized the strong demand for sports content and the improving performance of Fox News in ad revenues. Additionally, he expressed confidence in the upcoming political advertising season, anticipating a boost in revenue from national and local races.

The affiliate fee revenue saw a slight increase to $1.9 billion, with the cable division, led by Fox News, generating $1.5 billion in revenue. The TV division, spearheaded by the Fox broadcast network, reported revenue of $1.9 billion, albeit lower than the previous year due to the Super Bowl comparison.

During the call, Murdoch also discussed the progress of Tubi, Fox’s free ad-supported streaming platform, and a streaming sports joint venture in development. He mentioned that the joint venture has 150 employees working on it and a functional demo product, emphasizing its focus on cord-cutters and digital-first approach. Murdoch described the product as groundbreaking and innovative, catering to a new audience in the streaming landscape.