Fox Corporation generated a profit during its fiscal third quarter (Fox Q3, calendar Q1) despite lower comparative ad revenue, according to the company’s earnings report released on Wednesday.
Overall revenue clocked in at $3.45 billion during the first three months of the year, or around 15 percent lower when compared to the prior year, which was bolstered by higher ad interest due to a Super Bowl telecast.
With the Super Bowl moving to Paramount Global’s CBS this year, things mostly returned to normal for Fox. Compared to Fox Q3 2022 — the last time Fox did not have a Super Bowl — overall revenue fell less than 1 percent.
Fox was also not saddled with a legal charge during its most-recent Q3, unlike last year, when Fox agreed to shell out $787.5 million to Dominion Voting Systems as part of a settlement in their civil defamation case.
Net income clocked in at $704 million during Fox Q3, significantly better than the $54 million loss the company logged during the same period last year. When compared to the non-Super Bowl quarter in 2022, Fox’s profit increased 142 percent from the $290 million in net income reported then.
“Fox’s fiscal third quarter results once again demonstrate how our unique strategy continues to distinguish Fox from our peers,” Fox CEO Lachlan Murdoch said in a statement. “The strength and leadership of our core brands, coupled with our focus on live content and must-have event programming, is clearly valued by our audiences, advertisers and distribution partners.”
Fox’s television segment — which includes the Fox broadcast network and free, ad-supported streaming service Tubi — helped bolster the company’s overall revenue, earning $1.938 billion during Fox Q3, a 6.4 percent increase when compared to the Fox’s non-Super Bowl Q3 2022.
Affiliate fees charged to cable and satellite subscribers for the carriage of Fox’s broadcast network and local Fox-owned stations clocked in at $834 million during Fox Q3, a year-over increase of 9.1 percent. Fox began renegotiating its distribution contracts with cable and satellite companies last year, and will continue to work with some distributors toward new contracts through the end of 2024.
Cable network affiliate fees rose to $1.1 billion during the quarter, a year-over increase of 1 percent. That segment includes fees generated from the carriage of Fox News Channel, Fox Business Network, Fox Sports 1 and Fox Sports 2 on cable, satellite and streaming cable-like platforms.
Advertising against Fox cable networks fell to $296 million, with Fox blaming the lack of the World Baseball Classic on its sports networks and lower take in ad inventory against Fox News and Fox Business Network programs.
Tubi, which is reported in the “television” segment of Fox’s business, helped push Fox’s advertising and overall revenue during Fox Q3. The number of people watching Tubi’s free, ad-supported streaming content rose to 80 million on a monthly basis, Fox revealed on Wednesday, up nearly 20 percent from the 67 million that were streaming Tubi content around this time last year.
Accordingly, Tubi’s advertising revenue climbed 22 percent on a year-over basis, Fox executives affirmed on Wednesday.
“Tubi finished only marginally behind Disney Plus in market share,” Murdoch said on a conference call with investors, referencing Nielsen’s latest “The Gauge” report, which evaluates how much of the streaming pie each service shares in the domestic market.
