Fox Corporation (FOXA) has long been a prominent player in the media industry, known for its diverse portfolio of news, sports, and entertainment content. As the media landscape continues to undergo significant transformation, driven by the rise of streaming platforms and shifting consumer preferences, Fox has positioned itself to adapt and capitalize on emerging trends.
Company Background
Fox Corporation was formed in 2019 after the sale of 21st Century Fox's entertainment assets to The Walt Disney Company. The newly formed entity focused on news, sports, and entertainment, retaining assets such as the Fox broadcasting network, Fox News Channel, Fox Business Network, Fox Sports, and Fox Television Stations. Since its inception, Fox has faced and overcome several challenges, including allegations of sexual harassment and discrimination at its Fox News division in 2020, which resulted in costly settlements. The company has also successfully navigated the decline of traditional pay-TV subscribers as more consumers cut the cord and shifted to streaming services.
Strategic Positioning
Despite these challenges, Fox Corporation has leveraged its strong brands and content to drive growth. The company's live sports rights, including the NFL, MLB, and college football, have remained valuable assets. Fox News has continued to be a ratings powerhouse, solidifying its position as a leading cable news network. In 2021, Fox made a strategic move by acquiring Tubi, a free ad-supported streaming service, allowing the company to expand its digital footprint and reach younger, cord-cutting audiences. The integration of Tubi with Fox's content and advertising capabilities has proven to be a successful strategy.
Over the years, Fox Corporation has also made investments to diversify its revenue streams. The company has explored opportunities in sports betting, leveraging its sports media assets, and has expanded its international presence through strategic partnerships and acquisitions. Through its focus on strong brands, live sports, and strategic initiatives, Fox Corporation has successfully navigated the changing media landscape and emerged as a leading player in the industry.
Adapting to Industry Trends
One of the key strengths of Fox Corporation has been its ability to maintain a strong foothold in traditional media while also embracing the digital transformation sweeping the industry. The company's cable news and sports programming continue to command loyal viewership, even as the linear television model faces challenges from the rapid growth of streaming services. Fox has responded to these shifts by strategically investing in its digital platforms, such as the Tubi AVOD service, which has seen impressive user growth and revenue expansion in recent years.
Financials
In fiscal year 2024, Fox reported total revenues of $13.98 billion, a year-over-year increase of 7.2%. This topline growth was driven by strong performance across the company's segments, with affiliate fees and advertising revenues demonstrating resilience. The Cable Network Programming segment, which includes the highly successful FOX News Media, contributed $6.34 billion in revenues, while the Television segment, anchored by the FOX broadcast network and Tubi, generated $7.64 billion.
For the most recent quarter (Q2 2025), Fox Corporation reported revenues of $5.08 billion, up 20% year-over-year. This increase was primarily driven by higher affiliate fee, advertising, and other revenues. Affiliate fee revenue increased 6% due to higher average rates per subscriber, partially offset by a decrease in the average number of subscribers. Advertising revenue increased 21% due to higher political advertising revenue, continued digital growth led by Tubi, and stronger sports programming. The company's net income for Q2 2025 was $373 million.
In the first half of fiscal 2025, Fox Corporation delivered strong financial performance, with consolidated revenues increasing 16% year-over-year to $8.64 billion and Adjusted EBITDA growing 50% to $1.83 billion. The Cable Network Programming segment generated $3.76 billion in revenues, a 24% increase compared to the prior year period. The Television segment generated $4.91 billion in revenues, a 14% increase compared to the prior year period.
Segment Performance
Cable Network Programming Segment
The Cable Network Programming segment produces and licenses news and sports content that is distributed through traditional cable television systems, direct broadcast satellite operators, telecommunication companies, virtual multi-channel video programming distributors (vMVPDs), and other digital platforms, primarily in the U.S. This segment's revenues are primarily generated from affiliate fees and advertising.
For the six months ended December 31, 2024, the Cable Network Programming segment saw affiliate fee revenues increase 4% to $2.11 billion, driven by higher average rates per subscriber despite a decrease in the average number of subscribers. Advertising revenues grew 22% to $781 million, primarily due to higher news ratings, pricing, and digital advertising revenue, as well as contributions from sports programming like higher MLB postseason ratings and pricing. The segment's EBITDA increased 20% to $1.41 billion, reflecting the higher revenues partially offset by a 29% increase in operating expenses to $2.06 billion due to higher sports programming rights amortization and production costs.
Television Segment
The Television segment produces, acquires, markets, and distributes programming through the FOX broadcast network, the advertising-supported video-on-demand (AVOD) service Tubi, 29 full power broadcast television stations (including 11 duopolies), and other digital platforms, primarily in the U.S. The segment's revenues are generated from advertising, affiliate fees, and other sources like content licensing.
For the six months ended December 31, 2024, the Television segment saw advertising revenues grow 16% to $2.97 billion, driven by approximately $400 million of political advertising due to the 2024 elections, as well as continued digital growth led by Tubi and sports programming like higher NFL pricing and UEFA/CONMEBOL tournament broadcasts. Affiliate fee revenues increased 9% to $1.63 billion due to higher average rates per subscriber, partially offset by a lower average number of subscribers. Segment EBITDA increased 171% to $577 million, as the revenue growth more than offset a 5% increase in operating expenses to $3.83 billion and a 7% increase in selling, general, and administrative expenses to $505 million.
Liquidity
As of December 31, 2024, Fox Corporation maintained a strong liquidity position with $3.32 billion in cash and cash equivalents. The company has a $1 billion unsecured revolving credit facility available. Fox Corporation's debt-to-equity ratio stands at 0.71, indicating a balanced capital structure. The company's current ratio of 2.50 and quick ratio of 2.14 suggest a healthy short-term liquidity position, with the ability to meet its short-term obligations comfortably.
Content Strategy and Distribution
Despite the broader industry challenges, Fox has remained focused on delivering compelling content and innovating its distribution strategies. The company's commitment to quality journalism, live sports coverage, and popular entertainment programming has allowed it to maintain a strong competitive position. Moreover, Fox's strategic investments in Tubi and its growing digital initiatives have positioned the company to capitalize on the shifting consumer preferences towards on-demand and streaming content.
Direct-to-Consumer Expansion
One of the key priorities for Fox has been the expansion of its direct-to-consumer (D2C) offerings. The company plans to launch a new subscription-based streaming service by the end of calendar year 2025, targeting cord-cutters and cord-nevers not in the traditional cable bundle. This move aligns with the broader industry trend of media companies seeking to diversify their revenue streams and reach audiences outside the traditional cable bundle. Fox has stated that the D2C service will be priced accordingly with modest subscriber expectations and will not require any exclusive rights or significant incremental rights costs.
Capital Allocation and Shareholder Returns
Fox Corporation has demonstrated its commitment to returning value to shareholders through its ongoing share repurchase program and dividend payments. The company reiterated its commitment to its $7 billion share buyback program, with $6.15 billion repurchased to date. Additionally, Fox announced a 27% increase in its semi-annual dividend payout, further enhancing shareholder returns.
Industry Trends and Challenges
The media industry has been experiencing a shift towards streaming and digital content consumption, with declining traditional pay-TV subscriber numbers. However, Fox has been able to capitalize on this trend through its Tubi AVOD service, which has seen strong growth. The company's diversified business model, with growing digital and sports assets complementing its linear television networks, has enabled it to capitalize on key industry trends like the growth of AVOD and the continued popularity of live sports programming.
Fox Corporation and certain of its current and former employees have been subject to allegations of sexual harassment and discrimination, particularly within its FOX News business. The company has resolved many of these claims and is contesting others in litigation. Fox has also received regulatory and investigative inquiries relating to these matters. To date, none of the amounts paid in settlements or reserved for pending or future claims is material, individually or in the aggregate, to the company.
Conclusion
Despite the challenges posed by the rapidly evolving media landscape, Fox Corporation has demonstrated its resilience and adaptability. The company's strong brand equity, diverse content offerings, and strategic investments in digital platforms have positioned it well to navigate the ongoing industry transformation. With its successful completion of affiliate renewals impacting fiscal 2025, the upcoming launch of its D2C streaming service, and continued focus on shareholder returns, Fox Corporation is poised to capitalize on the opportunities presented by the shifting media landscape while addressing ongoing challenges in the industry.
