Fox Corporation has reported financial results for the three months and twelve months ended June 30, 2023. The company operates Fox News Channel, Fox Sports, Fox Entertainment, Fox Television Stations and Tubi Media Group.
The business has survived some massive challenges that might have silenced other broadcasters. Fox News agreed to pay Dominion Voting Systems $787.5 million on the eve of a court case about counting the votes in the 2020 presential election. Fox also weathered the loss of its key presenter Tucker Carlson with ratings remaining strong meaning again we see the brand being bigger than the broadcaster.
Commenting on the results, executive chair and chief executive officer Lachlan Murdoch said: “Fiscal 2023 showcased the very best of Fox’s portfolio while achieving record annual revenue and EBITDA. From the exceptional sports calendar that included Super Bowl LVII and the FIFA Men’s World Cup, to the record-breaking political midterm cycle and the impressive growth seen at Tubi, the power of the Fox platform was on full display. We enter fiscal 2024 with a focused strategy and best-in-class balance sheet as we continue to drive shareholder value.”
Fox: The numbers
Fox Corp reported total full-year revenues of $14.91 billion, a 7% increase from the $13.97 billion reported in the prior year. (All amounts in US$.) Affiliate fee revenues increased 3%, led by 8% growth at the television segment. Advertising revenues increased 12%, primarily reflecting the broadcasts of Super Bowl LVII and the FIFA Men’s World Cup at Fox Sports, continued growth at Tubi, and higher political advertising revenues at the Fox Television Stations, partially offset by the absence of Thursday Night Football.
The company noted other revenues increased 5%, driven by the full-year impact of the prior year consolidation of entertainment production companies and higher Fox Nation subscription revenues.
Full-year net income was $1.25 billion as compared to the $1.23 billion reported in the prior year. The variance includes charges associated with legal settlement costs at Fox News Media.
Full-year adjusted EBITDA was $3.19 billion, an 8% increase from the $2.96 billion reported in the prior year, primarily due to the revenue increases noted above, partially offset by higher expenses. The increase in expenses primarily reflects higher programming rights amortization and production costs at Fox Sports driven by the broadcasts of Super Bowl LVII and the World Cup, as well as increased digital investment at Tubi, partially offset by the absence of Thursday Night Football.
Lachlan Murdoch on Fox strategy
Speaking on the earnings call after the release of the results, Murdoch said: “These results demonstrate that Fox’s differentiated strategy continues to deliver engaged audiences at scale for our advertising and distribution partners across our sports and news verticals. While also driving exceptional growth across our digital businesses.
“In a world of increasing audience fragmentation, Fox’s collective linear and digital viewership was up 8% year-over-year. The onscreen reflection of that strategy was clearly apparent throughout fiscal 2023.”
Breaking all-time ratings records
Murdoch continued: “Fox’s broadcast of Super Bowl LVII was the most-watched TV show of all time.
“Our Thanksgiving Day game was the most-watched NFL regular season game of all time.
“The US v England match was the most-watched US Men’s World Cup match of all time.
“Fox News maintained its lead as both the top-rated national cable news channel as well as the top-rated network across the entire cable eco-system and ranks as the #2 national network in all of US television.
Tubi the AVOD over-achiever
Murdoch: “On the streaming front, Tubi made its debut in Nielsen’s The Gauge, growing total consumption in fiscal 2023 by 79%, making it the #1 AVOD player with consumption levels equal to a top five cable network.
“Tubi’s fiscal 2023 was nothing short of spectacular. Underpinned by growth in total view time which in turn powered revenue growth. It was a year of increased awareness and engagement for Tubi – whether that was being recognised by Nielsen as America’s most-watched AVOD service, its expanding content library and TVT metrics, or the five Cannes Lions awards bestowed on Tubi’s Super Bowl spot.
“Each quarter during the year saw successive gains at Tubi and the fiscal fourth quarter was its most impressive of all with revenue growth of 47% driven by strong engagement with total viewer time growing by 65%. Each month of the quarter set new records for monthly viewers.
“We are looking forward to further strengthening Tubi’s position in fiscal 2024. To that end we are very excited to welcome Anjali Sud as the new CEO of Tubi.”
The revamped Fox News primetime line-up
Fox News leadership
“At Fox News Media we continued to lead in both ratings and engagement. The Fox News Channel ended the further quarter as the most-watched cable network in total day for the ninth consecutive quarter. It maintained its lead as the most-watched cable news network, beating CNN and MSNBC in both total viewers in the demo for primetime and total day.
“Fox News debuted its tweaked primetime line-up last month. We are pleased with the initial results and are confident our deep bench of talent will continue to set the standard for all news services as we move toward the 2024 presidential election.
“This past year the Fox News leadership position was never at risk. We sustained double digit advantages in total viewership over our nearest competitors for the entire fiscal year. Even during the period when our primetime line-up was in transition. Since its mid-July debut, Fox News’s new primetime line-up is up over 35% in total viewers and up over 40% in 25-54 demographic versus the June schedule.”
Murdoch explained there were plenty of highlights too at the Fox Entertainment Network: The broadcaster can boast to have the #1 entertainment telecast with Gordon Ramsay’s Next Level Chef, #1 new drama of 2023 with The Accused and #1 new unscripted series with Special Forces: World’s Toughest Test.
Gordon Ramsay in Next Level Chef
Cable Network Programming reported full year segment revenues of $6.04 billion as compared to the $6.10 billion reported in the prior year. Affiliate fee revenues were $4.18 billion as compared to the $4.21 billion reported in the prior year, as contractual price increases were more than offset by the impact of net subscriber declines.
Advertising revenues were $1.40 billion as compared to the $1.46 billion reported in the prior year, primarily due to the impact of elevated supply in the direct response marketplace at Fox News Media, partially offset by the broadcast of the World Cup at the national sports networks. Other revenues increased $35 million or 8%, led by higher Fox Nation subscription revenues and higher sports sublicensing revenues.
Cable Network Programming reported full year segment EBITDA of $2.47 billion as compared to the $2.93 billion reported in the prior year, primarily due to higher programming rights amortization at the national sports networks, including the broadcast of the World Cup, as well as higher legal costs at Fox News Media.
For its coverage of FIFA Women’s World Cup Fox Sports set up HQ at Campbells Cove
Television reported full-year segment revenues of $8.71 billion, an increase of $1.03 billion or 13% from the amount reported in the prior year. Advertising revenues increased $764 million or 17%, driven by the broadcasts of Super Bowl LVII and the World Cup at Fox Sports, continued growth at Tubi and higher political advertising revenues at the Fox Television Stations, partially offset by the absence of Thursday Night Football.
Television reported full-year segment EBITDA of $1.01 billion, an increase of $662 million from the amount reported in the prior year, primarily due to the revenue increases noted above, partially offset by higher expenses. The increase in expenses primarily reflects higher programming rights amortization and production costs at Fox Sports, including those associated with the broadcasts of Super Bowl LVII and the World Cup, and increased digital investment at Tubi, partially offset by the absence of Thursday Night Football and lower entertainment marketing and production costs.
See also May 2023: Fox Corp results – Surging ad revenues, Fox News primetime and Dominion settlement