Fox Corp (FOXA) earnings Q3 2023
News Corporation headquarters, which is also home to Fox News, stands in Manhattan on April 18, 2023 in New York City.
Spencer Platt | Getty Images
Fox Corp. reported a quarterly net loss on Tuesday due to costs related to the settlement with Dominion Voting Systems, despite revenue lifted by the Super Bowl and its fast ad-supported streaming service Tubi.
Fox achieved $4.08 billion in quarterly revenue, up 18% from the same period last year. Advertising revenue increased on the back of the Super Bowl – the most watched program in US television history with 115 million viewers, giving approx. 650 million dollars in gross advertising revenue. The company also saw a boost from airing more NFL games during the season and from increased viewership for Tubi.
The company said Tuesday it had a net loss of $54 million in the fiscal quarter, compared with a profit of $283 million in the same period last year, due to costs related to settlement costs.
Last month, Fox agreed to pay Dominion $787.5 million to settle a defamation lawsuit over false claims that Dominion’s machines influenced the outcome of the 2020 presidential election.
While the company is unlikely to see a big dent in its bottom line because of the Dominion case, it has been exposed to high legal fees in recent quarters related to the suit, due to pre-trial provisions and preparations, CFO Steve Tomsic said Tuesday.
Executives said Tuesday they did not expect the legal costs to affect share buybacks.
The settlement halted a trial that was to include appearances from top executives including chairman Rupert Murdoch, as well as Fox News talent, on the witness stand.
“We made the business decision to resolve this dispute and avoid the acrimony of a divisive trial and multi-year appeals process, a decision that is clearly in the best interests of the company and its shareholders,” CEO Lachlan Murdoch said on Tuesday’s earnings call. “The settlement in no way changes Fox’s commitment to the highest journalistic standards across the company or our passion for unabashedly reporting the news of the day.”
The CEO said Tuesday that the Delaware court had “severely limited” his defenses because of a pretrial ruling. Among the challenges he pointed to was the judge’s ruling that Fox could not use newsworthiness as a defense.
The company has previously said, and Murdoch reiterated Tuesday, that Fox “always acted as a news organization, reporting on the newsworthy events of the day,” which it says includes allegations made publicly by then-President Donald Trump and his allies. Fox has argued that it was protected by the First Amendment, which Murdoch reiterated Tuesday when discussing the remaining defamation lawsuit Fox faces from Smartmatic USA, another voting technology company.
Murdoch noted that the Smartmatic case is moving at a “fundamentally different pace” than Dominion, as it will likely go to trial in 2025, but that the full First Amendment defense remains.
Shortly after Fox’s settlement with Dominion, the network fired top on-air host Tucker Carlson, a surprising move for the network that has seen high ratings for its primetime program “Tucker Carlson Tonight.”
On Tuesday, Murdoch said there would be no changes to Fox’s prime-time programming strategy, noting that the network is “always adjusting our programming and our lineup, and that’s what we’re continuing to do.” Fox is the top-rated cable news channel, although prime-time viewers in Carlson’s slot have fallen since his departure.