Fox Corp. said it is amending one of its credit agreements amid the uncertainty caused by the Coronavirus crisis.
In a filing with the Securities & Exchange Commission Tuesday, Fox said that the pandemic was affecting its business. It noted that while national news ratings remain strong, sports events the company planned to broadcast have been cancelled or postponed and the production of some content has been suspended.
“The magnitude of the impacts will depend on the duration and extent of COVID-19 and the effect of governmental actions and consumer behavior in response to the pandemic and such governmental actions,” Fox said. “The evolving and uncertain nature of this situation makes it challenging for the Company to estimate the future performance of its businesses, particularly over the near to medium term, including the supply and demand for its services, its cash flows and its current and future advertising revenues. However, the impact of COVID-19 could have a material adverse effect on the Company’s business, financial condition or results of operations over the near to medium term.”
Other media companies have made similar statements. Some have withdrawn their previously issues financial guidance to Wall Street in the face of the difficulties in predicting future business conditions.
In terms of its credit agreement, Fox said the amendment will “deduct a certain amount of cash from indebtedness for purposes of calculating the operating income leverage ratio and provide for changes related to the adoption of the new lease accounting principles.”
Fox said it expects the amendment to go into effect in a few business days.
As of March 31, 2020, the Company had not drawn on the revolving credit facility provided by the credit agreement.
Some media companies, including Comcast and ViacomCBS have been selling bonds in order to keep cash on hand to keep operations going during the crisis.
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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