Strong retransmission consent revenue growth couldn’t counterbalance the lack of Super Bowl ad money from a year earlier as well as higher entertainment programming costs at the Fox Broadcasting Network.
Twenty-First Century Fox Inc. on Wednesday reported television revenue for its fiscal third quarter of $1.2 billion, a 22.1% decrease from the $1.6 billion reported in the same period a year ago. The decline principally reflects the absence of advertising revenue generated from the broadcast of the Super Bowl in the prior year.
Absent the impact of the Super Bowl in the prior year quarter, quarterly segment revenues were consistent with those from the corresponding period in the prior year as strong retransmission consent revenue growth was counterbalanced by a 7% decline in advertising revenues reflecting overall lower general entertainment ratings at the Fox Broadcast Network.
Television generated quarterly segment operating income before depreciation and amortization (OIBDA) of $141 million, a $147 million or 51% decrease from the $288 million reported in the prior year quarter, again due to the principally to the absence of advertising revenue and OIBDA generated from the broadcast of the 2014 Super Bowl in the prior year quarter as well as higher entertainment programming costs at the Fox Broadcasting Network from a higher volume of original series, including Glee and Empire, in the current year quarter as compared to more series repeats in the prior year quarter.
The cable network programming segment OIBDA increased $57 million or 5% to $1.23 billion, driven by a 14% revenue increase on strong affiliate revenue growth. The revenue improvement was partially offset by a 19% increase in segment expenses, the majority of which reflected the impact of the planned investments in new channels, primarily STAR Sports and FXX.
The expense growth at the new channels was led by increased rights fees related to the broadcast of the ICC Cricket World Cup at STAR Sports and increased programming costs at FXX led by The Simpsons. Segment OIBDA growth was adversely impacted by 5% from foreign exchange rate fluctuations, primarily in Latin America and Europe.
Commenting on the results, Chairman-CEO Rupert Murdoch said: “In the fiscal third quarter, we delivered double-digit affiliate revenue growth at our cable networks and continued our strong operating performance at our film studio. Our results reflect the underlying strength of our business even as it was impacted by an unfavorable comparison for our broadcast television businesses without the Super Bowl and ongoing currency headwinds. In addition, we’re seeing real momentum from our continued investments in our global channels business, most notably with the ICC Cricket World Cup broadcasts on STAR Sports in India which broke both linear and digital viewing records.”