Fox Corporation said profit fell in its fiscal second quarter despite revenue gains that were fueled by political advertising at its local stations and digital advertising at its large Fox News Media unit.
The owner of Fox News Channel, Fox Sports and the Fox broadcast network said net income attributable to shareholders came to $224 million, or 37 cents per share, compared with $300 million, or 48 cents per share in the year-earlier period. Fox said the decline in profit was largely due to a revenue decline in its operations that are separate from its main media operations, citing a gain in the year-earlier quarter. The segment includes the company’s corporate overhead, stake in financial-tech company Credible Labs, and its L.A. studio properties.
Revenue rose 8%, to $4.09 billion, compared with $3.78 billion in the year-earlier quarter.
Lachlan Murdoch, the company’s executive chairman and CEO, noted “an unprecedented political advertising cycle at our local television stations, strong digital growth at Fox News Media and an
influx of new advertisers at Tubi,” the company’s streaming-video outlet.
During a call with investors, Murdoch expressed optimism for the company’s businesses, noting that Fox believes Tubi, its video-streaming service, can thrive among other ad-based competitors. He also suggested Fox Sports would fare well as rivals like NBCUniversal placed more scrutiny on their own sports operations. Fox, he said, has long focused on major sports like NFL and Major League Baseball, rather than trying to build a portfolio out of rights deals with smaller sports leagues. He said he expected ongoing talks with the NFL for a new round of sports rights to reach some sort of conclusion in the near to immediate term.
Fox’s TV stations were a pillar of the fiscal quarter, helping to drive an increase in advertising revenue in the company’s broadcast operations by $168 million. Still, cash flow at the broadcast operations was negative, as Fox dealt with increases in rights fees for football and the postponement of some scripted programs due to the pandemic.
Fox’s cable operations also produced increased advertising revenue, but increases in fees from affiliates were offset by the need to create “potential distribution credits as a result of cancelled
college football games in the quarter” due to the pandemic.