Fox News, the cable news giant controlled by Rupert Murdoch, kept its parent company flush for the first three months of the year, posting slight gains and revenue growth despite a drop in audience numbers.
Overall, Fox Corporation exceeded Wall Street’s expectations with a seven-fold increase in profits to 567 million US dollars and a decline in sales of 6.5 percent to 3.2 billion US dollars compared to the same period last year. A change in the company’s valuation of some of its assets was a primary driver of the increase in profits. Investors were looking for $ 332 million in profits and $ 3.1 billion in revenue.
However, revenue across most of its businesses declined as fewer viewers tuned into the company’s cable channels and the Fox broadcast network, also because Fox didn’t host the Super Bowl that year. Total advertising revenue fell 24 percent to $ 1.2 billion. In the cable segment, primarily Fox News, ad revenue fell 7 percent to $ 283 million.
The decline in advertising reflects the performance of other media conglomerates and shows a clear shift in the advertising market. Ad revenue rose in the first quarter on Facebook, Google, and even smaller digital publishers, as advertisers were more willing to spend their budgets on digital platforms, often at the expense of television.
Fox News still makes up the vast majority of Fox Corporation’s profits. The cable division, which houses the communications network, posted pre-tax revenue of $ 899 million, which is 95 percent of the company’s total pre-tax profit. The company’s businesses include several sports cable networks and the free streaming platform Tubi.
The company also announced on Wednesday that it had acquired OutKick Media, the publisher of its sports news site of the same name. The company is run by Clay Travis, a sports commentator known for making controversial statements. Last year he called the coronavirus “overrated” and downplayed the severity of the brewing pandemic.
In a statement announcing the acquisition, Lachlan Murdoch, general manager of Fox Corporation and son of Rupert Murdoch, welcomed Mr. Travis. “Clay and his team quickly made OutKick a content powerhouse with a very large, loyal, and engaged audience.”
Despite the decline in viewership on Fox News, the network benefited from contractually triggered rate increases that cable operators pay to broadcast the channel. License fees rose 6 percent to $ 1.07 billion. Advertising declined despite higher ad rates.
The younger Mr. Murdoch claimed victory for Fox News in a conversation with investors after the earnings report.
“Fox News has regained its leadership position as America’s premier cable news network and prime-time cable network,” he said before taking a moment to compete against rivals.
“MSNBC has lost more than a third of its audience and CNN has lost more than half,” he said. “More than the half.”