The Super Bowl telecast in February and rising political advertising revenue at Fox News made for a strong start to the year for Fox Corp.
Fox Corp. on Wednesday posted solid revenue and adjusted operating income games for the quarter ended March 31, which is the company’s fiscal third quarter. Revenue was up 25% to $3.4 billion, thanks to a more than $500 million influx from the Super Bowl, while adjusted earnings before interest, taxes, depreciation and amortization were up 20% to $920 million.
Fox Corp. CEO Lachlan Murdoch was pressed hard by Wall Street analysts during the call for detail on the coronavirus lockdown and its impact on the operations of Fox network, Fox Sports, Fox News and the 29 Fox O&O stations around the country. The biggest wallop has come at the local station level, where ad sales for the quarter appear to be down some 50% from the year-ago frame, despite generally higher ratings.
The picture is much different at Fox News. Murdoch said the news network that is among the oldest skewing major networks has seen its younger audience grow which is a boost for ad sales. He also said that advertising dollars booked on other Fox networks for sports telecast are being re-routed to Fox News.
“New business coming to Fox News looking to reach younger demos,” Murdoch said. The ability to move those dollars around the Fox TV eco-system has had the effect of “mitigating most of the pullback in other categories” such as auto, entertainment and retail, he said. Fox News delivered “the largest audience in its history” at the close of the quarter, Murdoch said.
Fox is hopeful that the signs of economic recovery are on the horizon. Marketers “are beginning to think aobut how they market and get their products and brands in front of customers again,” Murdoch said. “It’s early days . We’re just beginning to see that positive shift.”
Political advertising has also pulled back significantly,
Fox’s Cable Programming unit delivered $1.5 billion in revenue (up 6%) and $792 million in EBITDA (up 7%). Fox Television, buoyed by the NFL championship game came in at $1.9 billion in revenue (up 41%) and $224 million in EBITDA (up 126%).
Among other highlights from the call:
** Murdoch talked up the growth of the Fox Nation streaming subscription service, saying that 80% of its free trial users are converted to paying customers.
** Fox has yet to sit down with the NFL to discuss renewing its contract for the NFC conference games that expire in two years but it has been in close contact with the league on the fate of the 2020 season. “There’s nothing we see in the marketplace today that makes us feel any differently about the value of our partnership with the NFL,” he said.
** Murdoch emphasized that Fox has been lucky on the broadcast side in that the timing of its sports rights holdings are more concentrated to fall events such as the Major League Baseball playoffs, college and NFL games are fall and winter events that may have a better shot of staying on track this year.
** Tubi, Fox Corp.’s newly acquired streaming service, generated more that 200 million hours of “viewing time” last month, as Murdoch put it, up 150% from April 2019.
** Murdoch said the culinary staff at Fox Studios in West Los Angeles have been delivering 2,000 meals a day to the disabled in the Los Angeles area.