Fox Corp. Claims Top Upfront Performance

Fox Corp. closed out its fiscal year (ended June 30) with a strong year that included the 2022 election season and this year’s Super Bowl. The fourth quarter was flat, but that was considered OK given the macro-economic headwinds.

In the company’s quarterly Wall Street conference call, Executive Chairman-CEO Lachlan Murdoch repeated his claim that Fox’s strategy is different from its peers.

“Nowhere is that more evident than in the current environment, where Fox’s leadership position is proven. In this year’s upfront we believe Fox led the market in both price and volume across our live sports and news offerings,” he said. And he said he’s optimistic about the current quarter.

“While it is early in the quarter, underlying ad trends have shown signs of improvement over last quarter. We are seeing an uptick in scatter, driven largely by sports, and national news is solid,” Murdoch said.

Cable advertising was down 11% in the April to June quarter, primarily due to direct response weakness on Fox News, explained CFO Steve Tomsic.

“Our Television segment reported 4% growth in quarterly revenues. This was led by 9% growth in affiliate fee revenues,” he told the analysts.

“Television advertising revenues fell 1% as the strong growth in Tubi was offset by lower off-cycle political revenues and a slower rebound in the base market at the Fox Television stations and lower ratings at Fox Entertainment,” Tomsic added.

In the Q&A, Murdoch got into some of the nitty gritty details.

“Categories that really impacted the upfront, all these for national, are auto — which was a very strong category — travel — in the upfront very strong — and pharmaceuticals. From a local perspective, if you look at local pacing, ex-political — obviously you’ve got a year-over-year comparison with a very strong political year last year —ex-political we’re pacing flat to slightly up. That includes some of the local digital revenues. And those categories are similar: auto is very strong; financial services is strong; health, but offset by retail, telcom and, as we’ve talked about in past quarters, wagering. So overall we’re very pleased with where we are and we think we’re going to have a pretty decent second half,” the CEO said.

He was also upbeat when asked about affiliate deals.

“Our relationship with the affiliates is very strong. We catch up with them regularly. We understand the headwinds facing broadcast television and in our station group we’re going to have all the same issues that they have. So, we’re simpatico in both the opportunities and the risks of the headwinds in that business,” Murdoch said.

And he noted how Fox’s strategy differs from other networks when it comes to subscription streaming.

“We’re proud of the fact that we’ve protected our key sports franchises — for the pay TV environment, but also for our affiliates, our most important distribution partners. We don’t take our NFL games and put them anywhere else. We keep them exclusive for our distribution partners. That’s understood and very well received. And because of that I think we will be able to continue to drive the industry-leading pricing in the pay universe and the free universe,” Murdoch concluded.