Fox Corp. released its third quarter earnings on Wednesday (May 6), reporting a 25% in profits to US$3.44 billion and a 44% increase in advertising revenues.
The company attributed the rise in advertising revenues — which landed at $1.57 billion, compared to $1.09 billion in the prior year quarter — to its broadcast of Super Bowl LIV in February.
Affiliate revenues increased 10%, led by increases at the television segment, which reported total revenues of $1.93 billion, up from $1.37 billion in the year-ago quarter.
Advertising revenues for the television segement increased $454 million, or 56%, primarily due to the broadcast of Super Bowl LIV, partially offset by the impact of one less NFL Divisional playoff game compared to the prior year quarter.
Also contributing to the increase in advertising revenues were “higher cyclical political revenues” at Fox Television Stations, partially offset by a decline in the local advertising market as a result of the enduring COVID-19 pandemic.
Cable network programming, meanwhile, reported quarterly segment revenues of $1.47 billion, an increase of $84 million or 6% from the amount reported in the prior year quarter, “reflecting increases in affiliate, advertising and other revenues.”
Fox also reported a 27% increase in other revenues, led by the operation of the Fox Studios Lot for third parties and the impact of the “consolidation of Credible Labs Inc at the other, corporate and eliminations segment.”
Quarterly net income decreased to $90 million from the $539 million in the prior year quarter, primarily due to the change in fair value of the Fox’s former investment in Roku, as well as higher operating and selling, general and administrative expenses.
Executive chairman and CEO Lachlan Murdoch said in a statement: “We delivered exceptional operational and financial results in the quarter, highlighted by our successful broadcast of Super Bowl LIV on Fox. While we remain focused on continuing to execute against the strategy that drove this strong performance, we are acutely mindful of the global health crisis and its countless impacts.”
Fox’s rosy fiscal report stands in stark contrast to that of companies such as ViacomCBS and Discovery, Inc., both of which have reported lower profits and dwindling advertising revenue as a result of the pandemic.
The company stated the impact of COVID-19 and measures to prevent its spread are affecting its business in “a number of ways,” including the suspended production of “certain entertainment content” and reduced demand in local advertising markets.
“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,” Fox’s Q3 report reads. “A significant decline in estimated advertising revenue or the expected popularity of the company’s programming could lead to a downward revision in the fair value of, among other things, the company’s reporting units, indefinite-lived intangible assets and long-lived assets and result in an impairment and a non-cash charge that is material to the company’s reported net earnings.”