Lachlan Murdoch hoped he wouldn’t slip up and reveal the name of the new sports platform that Fox Corp., The Walt Disney Co., and Warner Bros. Discovery are rolling out this fall in a joint venture (JV). In speaking with analysts this morning about Fox’s third quarter earnings report, the company’s executive chair and CEO mentioned that a beta version was in the room behind him. The service has been nicknamed Spulu — or Hulu for Sports.
Murdoch addressed MVP concerns about how the Spulu service might negatively impact their business. “It’s very innovative. It’s designed to be entirely focused on the cord nevers [and] cord cutters, people who are not in the cable bundle, and who frankly won’t be able to compare it to a tier of live channels. It’s a very different digital-first product,” he said. “When you eventually get to enjoy it, you’ll understand how groundbreaking, certainly in this country, it really is.”
Murdoch said that about 150 engineers and executives are now hard at work — under the leadership of the JV’s CEO, Pete Distad — to get it ready. “We’ve already launched an internal beta service, which I been trialing this past week. And I have to say it’s an incredibly exciting product, and we can’t wait to launch it this fall,” Murdoch said.
In answer to an analyst’s question about why the JV deal paperwork hasn’t been inked, he said: “I wouldn’t read anything into the final deal terms being signed. It’s just a matter of everyone running on all cylinders to get the finished.”
That was but one of several topics covered during the call. Jessica Reif Ehrlich, managing director of Bank of America Securities, said that Fox “may have the strongest balance sheet in the industry” as a prelude to asking whether Fox is zeroing in on any acquisitions.
“We obviously don’t want our balance sheet to go to waste but we haven’t found anything yet that we’re immediately going to do or follow,” Murdoch replied.
The company’s operating results showed a decline in revenue from last year’s third quarter, about $3.45 billion in Q3 2024 versus about $4.08 billion. But affiliate fees rose, from about $1.86 billion in last year’s comparable quarter to $1.94 billion.
The television unit, where the broadcast stations are housed, increased its affiliate fees by $70 million, or 9%. And cable network affiliate fees rose $11 million, up 1%, with contractual rate increases partially offset by subscriber declines.
Due partly to the loss of the Super Bowl in 2024 and fewer NFL games on Fox Sports, the company’s overall advertising decreased from about $1.88 billion to $1.24 billion. Within Fox’s television unit, ad revenues went from about $1.56 billion at the same time last year to $939 million in the quarter just ended. Cable advertising also dipped, from $316 million to $296 million.
Murdoch waxed euphoric in discussing the continued growth of the company’s Tubi streaming platform, which now contains 250,000 movies and TV series and around 270 live FAST channels. Murdoch said that “90% of the viewing comes on demand. And this is very important because when viewing comes on demand — and it’s proactively on demand, as opposed to passively sitting back and watching a FAST channel — that’s much more valuable to advertisers. And it certainly is something that we’re going to make a big deal about at our upfront presentations next week.” He also expressed confidence that Fox wouldn’t need to drop Tubi’s CPM rate, unlike some of its competitors.
Murdoch noted that while political spend has been slower so far this election cycle — largely due to the lack of strong competition during the presidential primaries — there are high expectations that the spigot will overflow for local stations eventually.
Setting aside presidential election considerations, he focused on Senate races. Fox stations should benefit from spending tied to tight races in Arizona, Michigan, Pennsylvania and Wisconsin. The outlets are also intent on capturing issue ad spend in Florida, Maryland and Arizona.
Murdoch said Fox won’t enter the competition for NBA rights. “We’re very happy with our sports portfolio,” he said. “We feel very strong with the current portfolio that we have, which is one of the reasons why we didn’t pursue the NBA in this round of negotiations.”
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