Leading media company Fox Corp (NASDAQ:FOX) reported quarterly financial results Tuesday. While the results were strong and the stock was up, the best could be yet to come for the company in 2022 and early 2023.
What Happened: Fox reported advertising revenue up 8% year-over-year to $1.22 billion in the first quarter. The company cited strong political advertising revenue in the quarter, something that could continue to be a trend for the current second quarter.
The 2022 election has seen huge spending by candidates and political organizations. Add in Fox’s ownership of Fox News, which covers politics, and Fox could see the political sector provide a boost to financial results in the second quarter.
The other big catalyst for Fox could be sports, which may be underrated by investors at the current time.
Fox is airing the 2022 World Series for Major League Baseball. Game 1 between the Philadelphia Phillies and Houston Astros saw the highest Game 1 audience in three years.
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Game 1 averaged 11.48 million viewers, up 6% from the 2021 World Series. Game 2 averaged 11.1 million viewers. The first two games had an average viewership of 11.19 million, up 4% year-over-year.
One note was that viewership is still down from prior years to 2019. Another question mark is a rescheduling of World Series games — Game 3 was canceled on Monday night due to bad weather — that will see Games 5 and 7 (if necessary) compete directly with NFL games.
Fox also has the rights to National Football League games on Sundays, with a start time of 1 p.m. ET, with an occasional 4 p.m. ET game.
The first week of the NFL season saw an average viewership of 18.5 million viewers across the league’s coverage from various media partners, which was up 3% year-over-year. The first week was the best average for the league since 2016.
Fox averaged 15.4 million viewers for its first two games of Week 1, a figure up 11% from the previous year. Fox had the fourth most-watched game for Week 1 with the Green Bay Packers and Minnesota Vikings having 18.5 million viewers.
Viewership has remained strong in the 2022 season, with Fox seeing 22.29 million for its late doubleheader games on average, up 9% year-over-year.
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What’s Next: Political and sports content will be a continued catalyst for Fox going forward. Election Day 2022 is Tuesday, Nov. 8. Fox could see huge spending between today and next week, which will help boost the second quarter.
Fox will continue to air NFL games throughout the 2022 season as part of a media rights deal with the league. Strong viewership could continue for the company for its NFL games.
Outside of politics coverage and the current NFL games, Fox has two huge sporting events that could be future catalysts.
Fox is the home of Super Bowl LVII, which takes place on Feb. 12, 2023. Reports in September said that Fox was 95% sold out of ad inventory for the Super Bowl months before the game, with 30-second ads going for $6.5 million to $7 million each.
The Super Bowl will feature Rihanna as the halftime performer, which could attract additional non-sports fans to tune into portions of the big game. Halftime shows in recent years with big names have seen spikes in viewership for the game.
Fox also has another catalyst coming from football, but in this case, fútbol, or soccer as Americans call the sport.
Fox is set to air the U.S. coverage of the 2022 World Cup, which features the U.S. Men’s national team for the first time since 2014. Viewership for the 2018 World Cup, which did not feature the U.S. team, was down 37% from the 2014 World Cup.
One of the key World Cup games for the U.S. audiences will happen on the Friday after Thanksgiving, with the U.S. playing England in a game that could see a strong audience.
FOX Price Action: Fox shares were up 5.18% to $28.61 on Tuesday, versus a 52-week range of $26.43 to $40.91.
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