Political Ads Booming For Fox O&Os

Like all television companies, Fox Corp. has seen advertising demand negatively impacted by COVID-19. But in reporting on results for the company’s fiscal fourth quarter ended July 30, Executive Chairman-CEO Lachlan Murdoch singled out Fox’s owned stations as a bright spot, with record political ad sales helping to offset the pandemic impact.

Political is pacing more than 50% ahead of the equivalent period four years ago, he told analysts. Nine of the 18 stations are in presidential battleground states. There are also U.S. Senate races in 10 markets, plus some hot House races.

“In our top seven markets, where businesses have not yet fully reopened, we are now pacing overall down 29% at the start of Q1. Our next 11 markets are together pacing down just 4%. That’s a tremendous recovery from what we were seeing just a couple of months ago,” Murdoch told Wall Street analysts Tuesday.

Also, he proudly noted, “three of our markets are now pacing well ahead of last year.” Those are Atlanta, Tampa and Phoenix. “Not coincidentally, these are all strong political markets,” he added.

Apart from political, COO John Nallen said it is “remarkable to see how quickly local advertising is coming back.” That’s particularly true of the bottom half of Fox’s station portfolio by market size, where the populations are less dense and the markets have been less impacted by government-ordered shutdowns. “Those markets are coming back well,” he said.

On the network side, Murdoch called sales in the current upfront “very active.” He proudly noted that Fox will have two new series ready to go for the fall — the science fiction crime drama Next and the Southern drama Filthy Rich. Also, production on Fox’s animated series has been virtually unaffected by the pandemic. And network executives are also hoping to be able to air a new season of the hit reality competition series The Masked Singer.

Looking at the current quarter, Fox’s fiscal first quarter, CFO Steve Tomsic told analysts that the impact of COVID-19 is expected to reduce company-wide advertising revenues by about $250 million. “While we will enjoy the benefits from political advertising, a great volume of MLB regulation games and NASCAR races, along with the acquisition of Tubi, these will be more than offset by lower base advertising at our local stations, a reduced slate of fresh entertainment programming, fewer NFL and college football games in our Q1 schedule, and the absence of the World Cup and the MLB All-Star Game,” the CFO told analysts.