Local TV Advertising ‘Fully Recovered’ At Fox Corp.

Calling the advertising marketplace “robust,” Fox Corp. Executive Chairman-CEO Lachlan Murdoch said 6% ad revenue growth for the fiscal second quarter ended Dec. 31, 2021, was powered by CPM growth at the Fox Network and continued growth at the ad-supported streaming service Tubi. Company executives focused on 9% overall revenue growth to $4.4 billion, while reporting an overall loss of $73 million attributed to a decline in the value of the company’s “other” investments category.

Ad revenues for the TV segment rose 6% to $649 million, while the cable nets rose 3% to $454 million. Affiliate revenues (retrans and reverse comp) grew 10% to $649 million for TV and affiliate fees rose 12% to $454 million for cable.

“The overall market trends in local advertising also remain positive for us, as we achieved double-digit advertising growth in the quarter, when excluding political revenue. Perhaps even more importantly, our local advertising revenues have now fully recovered from the impact of COVID and are up over pre-pandemic levels,” Murdoch told Wall Street analysts Wednesday morning.

“While there continues to be softness in the local automotive category, caused by the ongoing supply-chain delays, this is being more than offset by nearly all other categories, led by sports betting. We have already written over 50% more local sports betting revenue at this point of the fiscal year than we did across all of fiscal ’21,” the CEO said. And he noted that the strength is continuing into the current quarter.

Murdoch remains gung-ho on Fox’s proprietary sports betting products, as well as strong growth from advertising buys from other companies. He declared that he is “extremely pleased” with the free-to-play Fox Bet Super 6 and is hoping to be able to expand the legal gambling product, Fox Bet, beyond its current four states: Colorado, Michigan, New Jersey and Pennsylvania.

At the local station group, Murdoch said sports betting is the leading category of advertising growth and is “significantly driving the advertising growth across our station group.” The category, he noted, is currently pacing up more than 100%.

Analyst Doug Mitchelson asked about trends in the current Upfront.

“What you’re seeing across the marketplace is softness in entertainment and scripted. The entertainment ratings — not just for us, but for all of the broadcasters — what you’re seeing is softness and you’re seeing major advertisers are parring and starting to look at where they can capture their consumers in other places. Where they’re flowing to … is live news and live sports — and, to a large extent, digital — which we’re utilizing Tubi extraordinarily well,” Murdoch replied.