Many media companies have expressed concern over whether Madison Avenue will continue to keep spending as the nation worries about a possible recession. At Fox Corp., for now at least, advertisers have continued to loosen their purse strings.
The owner of Fox News Channel and the Fox broadcasting network said profit in its fiscal fourth quarter rose, owing in part to political advertising in the run-up to the 2022 midterm elections at its local stations and higher pricing and ratings at its Fox News Media portfolio. Affiliate fees also increased at both cable and broadcast. Fox Corp. said revenue during the period rose 5% to $3.03 billion. compared with $2.89 billion in the year-earlier period.
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“These results validate the strategy we embarked on three years ago — to focus on live news and sports while investing in high growth digital initiatives to create a platform for ongoing growth,:” said Lachlan Murdoch. the company’s chairman and CEO, in a prepared statement. During a call with investors Wednesday, Murdoch added: “We are not currently seeing an adverse advertising impact on our business.”
Fox said profit came to 55 cents per share. Adjusted for one time costs, earnings were 74 cents per share.
Among the nation’s biggest media companies, none have tied their fortunes as closely to ad spend as Fox. The company’s broadest streaming asset, Tubi, is free and ad-supported and does not require a subscription or offer programming without commercial interruption. And Fox has evolved into an entertainment conglomerate largely fixed on live-events programming. The company is focused on managing sports rights, Fox News and a new Fox Weather broadband service, as well as entertainment programming that has time-sensitive elements, like “The Masked Singer.”
Fox’s results come amid some increased spending. Fox said operating income at its cable division fell as it ramped up spending on digital investment, Fox News, and the launch of the USFL. Operating income rose at its TV operations thanks to higher revenue as well as the amortization of programming helped offset new spending for its Tubi streaming video hub.
Fox’s cable operations saw a revenue increase of $61 million, or 4%, thanks to a $17 million boost in revenue from affiliate fees and a $44 million increase in ad revenue due in large part to higher prices and ratings at Fox News assets. Television operations saw a revenue increase of 5%, or $78 million, thanks to political advertising at and affiliate fees generated by Fox’s local TV stations.
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