Fox Corporation raked in $4.61 billion during its second fiscal quarter of 2022, the company said on Wednesday, with revenue boosted by the November to December broadcast of the 2022 FIFA World Cup soccer tournament and Fox’s news coverage of the midterm election.
The bulk of Fox’s revenue was attributed to its broadcast television sector, which was reported at $2.934 billion, an increase from the $2.795 billion reported during the same quarter in 2021. Executives attributed the revenue growth to the World Cup event; gains at Fox’s free, ad-supported streaming service Tubi; political ad buying against news and local programming on Fox-owned television stations in major markets like New York, Los Angeles, Chicago and San Francisco; and a lower operating expense due to the loss of “Thursday Night Football” telecasts to Amazon.
Advertising fees made the bulk of Fox’s television revenue, with the company reporting $2.052 billion for Q2 2022, up from the $1.954 reported during Q2 2021. Affiliate fees charged to cable and satellite companies accounted for $686 million in television revenue, an increase from the $649 million reported during the same period one year prior.
Fox’s cable affiliate fee revenue was reported at $1.026 billion, down from $1.039 billion reported during the same quarter in 2021. Executives attributed the decline in cable affiliate fee revenue to an ongoing trend of cord-cutting, where customers ditch expensive cable and satellite packages for cheaper, online-only offerings.
What Fox lacked in cable affiliate revenue was more than made up for through subscriptions to Fox Nation, which helped bring in $155 million for the quarter, up from $145 million reported during the previous year. Fox did not disclose the number of subscribers it has for Fox Nation, but the company has invested heavily in the streaming service’s news, documentary and general entertainment programming over the last 12 months.
Fox Nation costs $6 a month, with an annual subscription going for around $65 a year or $100 for two years. The Desk estimates Fox Nation has over 1 million subscribers.
During a conference call with reporters and investors on Wednesday, Fox Chief Executive Officer Lachlan Murdoch said the company will continue to make strategic investments in its digital properties, including Fox Nation and the free, ad-supported climate channel Fox Weather, in part because the company continues to see revenue growth opportunities there.
“When we look across our whole portfolio, and we look further into our websites, our FAST channels and our apps, this revenue is becoming very significant, even in parts of the company you wouldn’t expect,” Murdoch said. “So we believe the future of our business is obviously digital, and we’re making that transition pretty rapidly and robustly.”
One thing that has helped Fox: Unlike its competitors, most programs that aired on Fox aren’t rolled into a direct-to-consumer subscription streaming service that the company owns and operates. Instead, Fox recently renewed an agreement with the Walt Disney Company to continue distributing prime-time comedies, dramas and reality shows on Disney’s general entertainment streamer Hulu.
Meanwhile, Fox’s sports coverage — including soccer, professional football, auto racing and baseball — still requires tuning in to a Fox station or affiliate on broadcast TV, cable, satellite or a streaming cable replacement; by comparison, Comcast has streamed live NBC Sports programming on Peacock, while Paramount Global offers live feeds of CBS stations and affiliates through its cornerstone Paramount Plus streamer.
Murdoch said keeping live events tied to broadcast and cable television has helped the company leverage higher affiliate revenues from pay TV programmers and non-owned broadcast stations, even as viewers drop cable and satellite packages.
“It’s the strength of the portfolio that allows us to do that,” Murdoch affirmed. “We are looking forward to continued success in our affiliate renewals as we get into the next fiscal year.”
Meanwhile, Fox is more than happy to let Disney do the heavy lifting when it comes to digital distribution of Fox’s prime-time programming.
“The kind of symbiotic relationship that we have with Hulu, it grows in significance as viewers more and more watch our content on a sort of catch-up basis,” Murdoch said. “So when we look at our hit shows, we’re not monetizing them in the first window in the live or even live plus same day window, as you all know, in the same manner that we used to. And so being able to capture the engagement after live and same day or even live plus seven days is critically important. And our Hulu deal really allows us to do that.”