Fox Reports Quarterly $54 Million Revenue Loss From Dominion Voting Settlement

In their most recent earnings report released earlier today, Fox
FOXA
, which recently paid Dominion Voting System $787.5 million to settle a defamation lawsuit, announced a revenue loss of $54 million. In a call with investors Fox CEO Lachlan Murdoch noted the settlement was in the best interest of the company and shareholders by avoiding a divisive trial and potentially lengthy appeals. By comparison, one-year prior Fox earned a profit of $283 million.

Led by the NFL, in fiscal year third-quarter Fox reported strong revenue growth with an increase of 18% reaching $4.08 billion. Fox noted ad revenue grew by 43% aided by televising more NFL games. The highlight for Fox in the quarter was Super Bowl LVII. Recently, updated Nielsen ratings for the February 12 game averaged 115.1 million viewers across Fox, Fox Deportes and streaming providers. It is now the most watched Super Bowl to date.

In addition, Fox said the cost for some :30 ads had exceeded a record $7 million. Its estimated Fox on “Super Bowl Sunday” had grossed about $650 million in revenue. Next year, the new NFL media rights contracts begin with costs increasing by about 80% for the broadcast networks. This is expected to cut into profits. Super Bowl LVIII will be broadcast on CBS.

Another growth area was the AVOD Tubi which had revenue growth of 31% for the quarter. Murdoch said, “The momentum at Tubi continued in the quarter where its stellar growth has led to its emergence as the most-watched free advertising-supported television service in the United States.”

Another issue Murdoch addressed was the current Writers Guild of America’s work stoppage which has entered its second week with no end in sight. With a focus on live sports and news Murdoch noted the strike would have little financial impact on the network. The work stoppage however, will impact program scheduling and caution ad buyers. Fox broadcasts one hour less of programming each night compared to ABC, CBS and NBC.

Fox has scheduled its 2023-24 in-person upfront presentation to advertisers at New York’s Manhattan Center on the afternoon of Monday, May 15. In recent years, during the upfronts Fox has generated fewer than $2 billion in ad dollar commitments. Murdoch said Tubi will be “front and center in all our negotiations going forward.” In recent years many advertisers have expressed a greater interest in live sports and streaming video.

The week following the court settlement with Dominion Voting, came Tucker Carlson’s abrupt and surprising departure from the network. Carlson had been the top-rated primetime show averaging over three million viewers nightly. Since he left the time period Fox News has been using rotating weekly hosts. The first two weeks the ratings have been roughly cut in half. Fox News told Variety since Carlson’s departure they’ve had over 40 new advertisers in his 8 p.m. (ET) time period. While no permanent host has been named, Murdoch pointed out there will be no change in Fox’s programming strategy. Fox News has been the top-rated cable network.

Carlson’s annual contract with Fox is $20 million which Fox will honor until it expires in January 2025 (after the next Presidential election). There are reports that Carlton is looking to escape his “pay or play” clause in his Fox contract. Axios says Carlson is looking into being released from his Fox News contract which would allow him to work at another politically conservative media company.

Carlson has also blamed his former employer of releasing behind-the scenes footage of Carlson while at Fox News, including racist and sexist comments. Fox News has denied the allegation. (Fox News has reached out to lawyers at Dominion to find out if they had leaked Carlson’s messages.)

There have been reports that Newsmax and Rumble have offered to pay Carlson more than his current Fox agreement. Two days after he left Fox News, Carlson posted a video on Twitter saying “See you soon”. Carlson has had at least one conversation with Twitter CEO Elon Musk. Carlson has vowed not to remain silent.

Fox and five individuals are facing a $2.7 billion lawsuit in damages from Smartmatic over the 2020 Presidential election. Fox has called the allegations “baseless”.