Home Entertainment Fox Sees Q2 Profit Fall On 20% Advertising Decline

Fox Sees Q2 Profit Fall On 20% Advertising Decline

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Fox Corp. said profit fell noticeably in its second fiscal quarter due in part to a 20% dip in advertising revenue that reflected the absence of a outsized sporting event like the FIFA Men’s World Cup in the period as well as lower political advertising at its stations and a continued glut of cheaper direct-response advertising that has filled commercial breaks at many cable-news outlets.

The company, which owns Fox News Channel, the Fox broadcast network and Fox Sports, said second-quarter profit came to $109 million. or 23 cents per share, compared to $312 million, or 58 cents per share.

Revenue for the period fell 8.2% to $4.23 billion, compared with $4.61 billion last year.

Declines in traditional advertising revenue have been persistent for the last few quarters for most media companies, and there is hope the pattern will break in 2024 as a stock-market upturn and lowered interest rates buoy consumer spending. But there is also growing concern that Madison Avenue has already shifted many of the dollars it once earmarked for linear TV to new streaming venues where prices are lower and audiences are more difficult to aggregate.

Lachlan Murdoch, Fox’s CEO, said in a statement that the company continued to back a strategy of investing heavily in live programming like sports and news, which continues to bring bigger audiences. He also praised a new streaming sports joint venture the company unveiled with Warner Bros. Discovery and Disney, saying that it would help Fox reach broader audiences, while allowing the company to pursue its own strategies.

Revenue rose 2% at the company’s cable operations, largely on a $5 million increase in affiliate fees/ Ad revenue fell to $348 million from $451 million, largely due, Fox said, “to the impact of elevated supply in the direct response marketplace, lower ratings and higher preemptions associated with breaking news coverage at Fox News Media, and the absence of the Men’s World Cup at the national sports networks.”

Television reported quarterly segment revenues saw revenue fall to $2.54 billion, compared with $2.93 billion. Ad revenue fell to $1.65 billion, compared with $2.05 billion in the year-earlier period, due to the absence of the World Cup event and lower political advertising revenues at the company’s local TV stations.

One analyst suggested the ad trends bore observation. In a Wednesday research note, Wells Fargo analyst Steven Cahall noted that cable ad revenue missed his estimate by 6% to 7% and worried “the presidential election could be setting up for a weaker news cycle.”

More to come…