No Matter Who Wins, the 2020 Election Has Been Great for Fox's Bottom Line

Election night is Fox News Channel’s “Super Bowl,” the network's svp of news and politics Alan Komissaroff recently told Adweek, but the lead-up to Election Day has been a cash cow for parent company Fox Corp. In the media company’s most recent quarter, millions in political advertising and sky-high ratings on cable helped offset the Covid-19-related losses that have been battering the TV industry. In Fox Corp.’s quarterly earnings announced this morning, cable network programming—which includes Fox News and Fox Business along with sports channels like FS1—reported revenue of $1.3 billion, a 3% increase and a record for the segment. Ad revenues in the segment were up 18% to $45 million, driven primarily by higher pricing and strong ratings at Fox News, where ad revenue is up a whopping 36% in the quarter, chief executive Lachlan Murdoch told investors. Political advertising, in particular, has been a “monster” asset for the company, chief financial officer Steven Silvester Tomsic said, bringing in just under $100 million in quarterly revenue. It’s a quarterly political advertising record, and while about 70% of it came from Fox’s local stations, record spending is also benefiting Fox’s national channels. “In prior years, political advertising has been almost entirely local, and the growth in national political advertising—particularly on Fox News, but also importantly in sports—has been a new and, I think, a very positive development,” Murdoch said. That interest in political advertising is also helping buoy scatter advertising prices; during upfront negotiations, the company opted to designate about 5% more time for scatter during election season, a bet that “is paying off handsomely,” Murdoch said. “What the robustness of the political market has really done has really drive our scatter pricing up,” Murdoch said. “As advertisers have scrambled to buy time, scatter pricing across local stations, across sports, across news and across entertainment is up strongly.” From July through Election Day, the company expects to pocket nearly $300 million in political ad revenue, more than $200 million of which will be going to Fox’s local footprint, Tomsic said. That growth has helped paint a better picture across the company’s other segments, which saw Covid-19 hiccups affect ad revenues. In Fox Corp.’s television segment, advertising revenues were down 15% to $117 million due mostly to fewer NFL games than a year ago. Advertising revenues across the company were down 7%, due to live sports postponements on Fox Sports (including Big Ten and Pac-12 college football games) and some scripted programming delays at Fox Entertainment from its mostly pandemic-proof fall schedule that moved most live-action shows to midseason premieres. Overall, the company’s total quarterly revenue was up 2% to $2.72 billion, driven primarily by the cable segment. Tubi's continued growth While Fox News remains the crown jewel in the portfolio, the company is increasingly touting Fox Bet, its gambling platform, and Tubi, the free ad-supported streamer it acquired in March to get a foothold in the fast-growing streaming market. In August, Tubi reported 33 million monthly active users, a 65% year-over-year growth. More important than monthly active users to advertisers, however, is total viewing hours; on Tubi, that boiled down to 220 million hours in September, Murdoch said. “As you see fragmentation in the linear television market, particularly with linear entertainment, Tubi is the beneficiary of that,” Murdoch said. There’s also the benefit of Tubi receiving more than 40 Fox titles to stream and monetize on its service, including hit reality competition series The Masked Singer, which is the No. 1 television series on the platform. The company is promoting Tubi heavily through marketing promotions across other Fox properties, including during the World Series and on local stations, as the streamer moved to add local live news programming from Fox stations in October. That promotion is also extending to the ad sales side. Tubi is included in all of Fox’s ad sales discussions, Murdoch said, and since Sept. 1, Tubi has recorded 45 of its 50 biggest revenue days. That push will continue, especially as the streamer offers a younger (median age: 34) and more diverse audience to advertisers than Fox’s other properties. Heading into election night, Murdoch dismissed investor questions about the effects of the election’s outcome on Fox News' sky-high ratings. While “the appetite for news and news stories” is out of Fox Corp.’s control, Murdoch said, the company aimed to maintain share even “as we enter a more normal news cycle, which has to happen eventually.” He also brushed off the possibility of alternative networks—including one founded by Trump or his allies—that may appeal to conservative viewers. “We love competition, and we have always thrived with competition … and we see our competition as not only cable news providers, but the traditional broadcast networks,” Murdoch said.