Fox’s television segment saw its fiscal fourth-quarter operating income plummet 85% to $56 million and its revenues fall 6% as multiple factors canceled out higher retransmission consent revenue.
The company said offsetting factors included lower advertising revenues—as cyclical political revenues bottomed out—along with lower NFL and World Series ratings and the absence of revenue generated last year when one of Fox’s television stations permitted the commercial use of adjacent wireless spectrum. The lower revenues, as well as higher contractual sports programming costs at the FOX Broadcast Network, contributed to the drop in operating income.
But operating income at Fox’s cable network segment rose 3% to $1.37 billion, thanks to an 11% revenue increase on higher affiliate, syndication and advertising revenues. Segment expenses went up due to higher global sports programming costs as FS1 kicked off broadcasts of Big Ten college football.
The cable segment’s domestic affiliate revenue rose 12% amid rate increases at all of Fox’s domestic networks. But domestic advertising revenue fell 3% due to lower entertainment ratings. Fox’s cable domestic OIBDA rose 1% as a strong performance by Fox News partially offset by lower contributions from the domestic sports networks and National Geographic.
“We delivered another quarter of solid top-line revenue growth including the further acceleration of gains in global affiliate revenues and despite challenging revenue comparisons for our TV segment. Our results also reflect increased investment behind higher volumes of global sporting events as well as film releases from our studio, which led the industry in Golden Globe awards and Oscar nominations. Looking ahead, we are focused on continuing to deliver value to our shareholders through achieving our near-term growth plans, completing our proposed acquisition of the balance of Sky, obtaining the required approvals for the successful completion of our transaction with Disney and planning for the exciting launch of the new ‘Fox,’” said Executive Chairmen Rupert and Lachlan Murdoch in a statement.
Overall, Fox reported total quarterly revenues of $8.04 billion, up 5% from $7.68 billion one year ago. Quarterly income from continuing operations rose 114% to $1.84 billion.