Fox Corp. reported that it lost $54 million in the third quarter as a result of paying $787 million to settle a defamation lawsuit brought by Dominion Voting Systems against Fox News.
On Fox’s earnings call with analysts, CEO Lachlan Murdoch called the settlement with Dominion a business decision that avoided “the acrimony of a divisive trial” and a lengthy appeals process. He said the decision was “clearly in the best interests of the company and its shareholders.”
“The settlement in no way alters Fox's commitment to the highest journalistic standards across our company or our passion for unabashedly reporting the news of the day,” he said.
“We’re proud of our Fox News team,” Murdoch added, noting that it remains both the No. 1 cable news network and the top network in terms of ratings in all of cable.
Asked about the departure of primetime host Tucker Carlson, Murdoch said that there would be no change in Fox’s programming strategy.
Murdoch also said he did not expect the Writers Guild of America strike to have a significant financial impact on Fox. While there might be some schedule changes, he said, Fox’s focus on live news and live sports limits the work stoppage’s impact. He added that Fox programs only two hours per day of primetime shows and has a balance between scripted and unscripted series.
The timing of the strike, with upfront presentations coming next week, “creates some hesitancy” among advertisers and “makes it hard to present an exact schedule if you’re in entertainment,” Murdoch said.
“I think it positions us very well in the upfront,” he said, adding that Tubi would be “front and center in all our negotiations going forward.”
Fox's third-quarter revenue rose 18% to $4.08 billion.
Advertising revenue increased 43% because Fox carried the Super Bowl. It also benefited from having more NFL games in the quarter and continued growth at streaming platform Tubi.
Tubi revenues were up 31%.
Affiliate fee revenue rose 3%. TV affiliate fees were up 9%, while cable fees were flat.
“Our fiscal third quarter once again demonstrated the effectiveness of Fox’s strategy to leverage the power of compelling live events to deliver for our viewers, advertisers, and distributors at scale,” Murdoch said in a statement.
“During the quarter, the largest audience in U.S. television history gathered to watch Fox Sports’ broadcast of Super Bowl LVII, underpinning our delivery of double-digit revenue growth, and providing a promotional gateway to Fox’s entertainment and news brands,“ Murdoch said. “Additionally, the momentum at Tubi continued in the quarter where its stellar growth has led to its emergence as the most-watched free advertising-supported television service in the United States.
“Against a backdrop of macroeconomic uncertainty, our portfolio of leadership brands, combined with our balance sheet strength, position us well to allow us to focus on creating shareholder value for the long term,” he said.
