To no one’s surprise, the local television unit at Fox Corp. benefitted from record political advertising in the company’s fiscal first quarter ended Sept. 30. Even so, total advertising was down for the quarter at the O&Os. But no more, Executive Chairman-CEO Lachlan Murdoch told analysts in the company’s quarterly conference call this morning.
“Since I spoke to you in August, we’ve gained increased visibility into local advertising pacings. Last quarter [fiscal fourth quarter], our local stations were experiencing a year-over-year decrease in our base ad market of approximately 40%. Compare that to this first quarter, where our core stations were down approximately 20%,” said Murdoch.
And then to the current situation: “Including the benefit of political and station acquisitions, we are now pacing ahead of the same time last year,” he said.
“Looking at it slightly differently, at the beginning of COVID, the stations were pacing down nearly 50% compared to the prior year. Today, they are pacing ahead. This is a tremendous return to strength in a remarkably short period of time,” Murdoch told the analysts.
Total revenue for the company was up 2% in the fiscal first quarter to $2.72 billion, with affiliate revenues up 10%, while advertising declined 7%. Cable Network revenues were up 3% to $1.33 billion, with Fox News Channel benefitting from the election — offset by a decline at FS1 due to COVID-19-related sports cancellations.
Television (Fox Network, O&Os and Tubi streaming) reported revenues down $6 million to $1.35 billion. Affiliate revenues (retrans and payments from affiliate stations) rose 23% to $560 million, while advertising declined 15% to $670 million.
“From a television advertising perspective, our local TV stations generated record political advertising revenues in the quarter, reversing the COVID-driven trend of the June quarter, to be up versus prior year. This coupled with the addition of revenues from the fast-growing Tubi was more than offset in the segment by COVID-related postponements of college football and key scripted entertainment programming,” CFO Steve Tomsic said on the call.
“Looking through to the second quarter, the strong advertising momentum at [Fox] News, our local television stations and Tubi have all carried forward into the first month of this current quarter. We anticipate that these factors, coupled with a heavy schedule of sports events, will translate into a return to growth in overall advertising revenue in the fiscal second quarter,” Tomsic assured analysts, notwithstanding a delay in key scripted programming to mid-season.
Discussing details of the record political advertising with analysts, Tomsic noted the growth of national spending, even as the bulk of political ad spending continues to be at the local stations.
“It’s not been just a local story. We’ve been booking a significant amount of national political revenue. So, for the quarter we did just a shade under $100 million across the group, of which 70% of that was local. And then when we look at it across the first half — July through today — we’ll push close to $300 million of political ad revenue, of which just over $200 million will be local,” the CFO said.
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