Fox News, the cable news giant controlled by Rupert Murdoch, kept its parent company flush in the first three months of the year, notching a slight gain in profit and sales despite a drop in viewers.
Altogether, Fox Corporation beat Wall Street expectations with a sevenfold increase in profit to $567 million and a 6.5 percent drop in revenue to $3.2 billion compared with the same period a year prior. A change in how the company valued some of its assets was a key reason for the profit surge. Investors were looking for a $332 million profit and $3.1 billion in sales.
But revenue at most of its businesses dropped as fewer viewers tuned into the company’s cable channels and the Fox broadcast network, in part because Fox did not host the Super Bowl this year. Total advertising sales fell 24 percent to $1.2 billion, with the cable segment, primarily Fox News, seeing ad revenue drop 7 percent to $283 million.
The decrease in advertising mirrors the performance at other media conglomerates and spotlights a significant shift in the advertising market. Ad revenue jumped at Facebook, Google and even smaller digital publishers in the first quarter as advertisers were more willing to spend their budget on digital platforms, often at the expense of television.
Fox News still makes up the vast majority of Fox Corporation’s profits. The cable division that houses the news network generated $899 million in pretax income, accounting for 95 percent of the company’s total pretax profit. The company’s businesses include several sports cable networks and the free streaming platform Tubi.
The company also announced on Wednesday the acquisition of OutKick Media, the publisher of its namesake sports news site. The company is run by Clay Travis, a sports commentator who has been known for making controversial statements. Last year, he called the coronavirus “overrated” and downplayed the severity of the brewing pandemic.
In a statement announcing the acquisition, Lachlan Murdoch, chief executive of Fox Corporation and the son of Rupert Murdoch, welcomed Mr. Travis. “Clay and his team have quickly made OutKick a content powerhouse with a very large, loyal and engaged audience.”
Despite the drop in viewers at Fox News, the network benefited from contractually triggered rate increases that cable operators pay to carry the channel. Licensing fees rose 6 percent to $1.07 billion. Advertising fell despite charging higher ad rates.
The younger Mr. Murdoch claimed victory for Fox News in a call with investors after the earnings report.
“Fox News reclaimed its leadership position as America’s No. 1 cable news network and the most-watched cable network in prime time,” he said before taking a moment to take a jab at rivals.
“MSNBC lost more than one-third of its audience and CNN lost over half,” he said. “Over half.”