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Affiliate Fees Drive Fox Fiscal Q2

Overall revenue at Fox Corp. was up 5% in the fiscal second quarter to $3.78 billion, driven by strong affiliate fee growth at its cable and broadcast networks.

Overall affiliate fees rose 7% in the period to $1.4 billion, while total ad revenue was up about 1% to $2 billion. The ad revenue gain was despite tough comparisons to the prior year, which had record political ad sales because of the midterm elections.

On a segment basis, revenue at the cable networks was flat at $1.47 billion, while cash flow increased 7.1% to $556 million in the period, from $519 million in the prior year. Affiliate fee growth at the cable nets was about 2% to $957 million in the period, and advertising revenue was down 4.5% to $337 million.

At the television segment, which includes the Fox broadcast network and owned and operated TV stations, revenue was up slightly to $2.27 billion from $2.15 billion in the prior year. But affiliate fees (mostly retransmission consent revenue) was up 18% to $479 million and ad revenue rose 2.4% to $1.7 billion. The TV unit reported a loss of $214 million, up from $14 million in the prior year, mainly because of higher costs associated with the NFL and WWE Friday Night SmackDown, as well as higher programming rights amortization at Fox Entertainment.

“Our results reaffirm that Fox Corporation is delivering on the operational and financial objectives that we established less than twelve months ago,” said Fox executive chairman and CEO Lachlan Murdoch in a press release. “Our brands are exhibiting strength in a competitive marketplace and delivering healthy top-line growth as we continue to invest strategically to expand the reach of our portfolio and further diversify our revenue streams. Meanwhile, we are taking a balanced approach to capital allocation, including the return of $500 million to shareholders in the form of share repurchases since our last earnings release. Coming off an incredibly successful Super Bowl LIV and with the buildup to the November Presidential Election ahead of us, we look forward to continuing our momentum through calendar 2020.”