Fox Corporation grew its advertising revenue by 48 percent during its first financial quarter of 2023, spurred in large part by the broadcaster’s telecast rights to Super Bowl LVII in February and continued success with its ad-supported streaming service Tubi.
The growth in ad-related revenue comes at a time when other media companies have experienced financial challenges due to economic turbulence that has prompted companies to pull back on their marketing budgets over the last several quarters.
Fox’s advertising revenue during Q1 2023 was reported at $1.875 billion, up from the $1.307 reported during the same period in 2022.
Fox notched a big win earlier this month when analytics firm Nielsen Media Group admitted a blunder that caused it to undercount viewers for Super Bowl LVII. The actual number of households that tuned in to the big game was 115 million, making it the most-watched television program in American history.
While embarrassing for Nielsen, it was a big boost of confidence in Fox’s ability to deliver high-quality programming to the television masses at a time when consumers are increasingly ditching expensive cable and satellite television for cheaper online services to satisfy their entertainment needs.
To that end, Fox said its affiliate revenue grew to $1.857 billion during Q1 2023, a 3 percent increase compared to the previous year. Affiliate fee revenue includes payments made by cable and satellite operators who carry Fox’s linear channels and other programming, as well as any fees paid by local broadcast station owners who affiliate with the Fox network.
Cable and satellite affiliate revenue dipped 0.3 percent to $1.093 billion during the quarter, with the decline attributed to more cable and satellite subscribers canceling their service for streaming options. Advertising revenue from Fox’s cable networks also took a hit, with the company bringing in $316 million from its cable channels, a year-over-year decline of 6.7 percent.
Broadcast and streaming advertising revenue jumped 60 percent to $1.559 billion, spurred in large part by advertiser spending against Super Bowl LVII as well as National Football League playoff games aired on the Fox network. The figure also included ad revenue from Tubi, which offers tens of thousands of movies and TV shows along with hundreds of linear content streams.
“As we look ahead, we are confidence in the strength of the Fox brands and the strength of our balance sheet,” Lachlan Murdoch, Fox Corporation’s chairman and CEO, said on a conference call with investors on Tuesday. “While we are not completely immune to the headwinds facing the broader industry and the general economy, we are well positioned given our areas of differentiation. Nonetheless, you can expect us to be even more focused on our cost base as we look to reinforce our strategy for future growth.”
Overall, Fox said it logged a $54 million during Q1 2023, due in large part to the company’s recent settlement of a defamation case brought by Dominion Voting System over political conspiracy theories floated by on-air hosts and guests on some Fox News Channel programs.
Murdoch said the decision to settle the case came after an unfavorable pre-trial decision by a Delaware judge overseeing the matter, and was intended to help “avoid the acrimony of a divisive trial and a multiyear appeal process.”
“Our decision clearly in the best interest of the company and its shareholders,” Murdoch said. “The settlement in no way alters Fox’s commitment to the highest journalistic standards across our company or our passion for unabashedly reporting the news of the day. We’re proud of our Fox News team, the exceptional quality of their journalism and their stewardship of the Fox News brand.”
Few heads have rolled at Fox over the Dominion settlement, which implicated several on-air hosts and their guests for their roles in perpetuating election-related misinformation. In a surprise move last month, Fox News Media said it was parting ways with commentator Tucker Carlson, whose prime-time program was one of the highest-rated on the channel. Fox has launched a broad search for Carlson’s replacement; meanwhile, substitute programming in the 8 p.m. time slot has helped the network maintain its leading position among all cable news channels.
“As regards to our programming strategy in prime time, there’s no change to our programming strategy at Fox News,” Murdoch said on Tuesday. “It’s obviously a successful strategy.”