Still, Fox News isn’t veering off track after a wild and costly few weeks
Even though the company lost $787.5 million in the most recent period due to a huge settlement to Dominion Voting Systems and the dismissal of top-rated anchor Tucker Carlson, Fox Corp. CEO Lachlan Murdoch has stated that the network’s strategy will remain unchanged.
During the investor call to announce its financial results on Tuesday, Murdoch responded to an analyst’s question regarding Carlson’s dismissal by saying, “There is no change to our programming strategy at Fox News.”
Fox News was “obviously a successful strategy” according to Murdoch, who implied that the sacking of Carlson was only a change in tactics rather than a radical break from the network’s original direction.
Continually, we are modifying our content and lineup, as usual,” Murdoch said.
Following the announcement of a $50 million net loss for the most recent quarter, as contrasted to a $290 million profit the previous year, his remarks were made.
A $719 million charge, which included attorney fees, other legal costs, the Dominion settlement, and other settlements involving its news division, was the reason for this. However, the charge was partially offset by the equity earnings of its affiliates and a change in the market value of some of its investments.
While expenses linked to litigation settlement costs at Fox News Media are included in the earnings statement, Dominion Voting Systems is not. As a result of decisions made by the Delaware court that, according to Murdoch, restricted the firm’s defense, the settlement with Dominion was deemed to be in the best interest of the company and its shareholders during the call with investors. He warned that an appeal may have taken two or three years had the case gone to trial.
The president expressed his pride in the Fox News crew, the high caliber of their reporting, and how they have managed the Fox News reputation. Our confidence in the strength of the Fox brands and our financial sheet allows us to look forward with confidence.
Despite the fact that several of the Fox news anchors’ internal correspondence made public via the discovery process demonstrated that they did not accept the assertions being made, he once again defended the company’s coverage of the baseless conspiracy theories claimed against Dominion after the election.
Murdoch said investors on Tuesday that the company had always operated as a journalistic organization, reporting on noteworthy events as they happened.
“We have always been and always will be confident in our stance that a news organization’s reporting and claims made by a sitting president of the United States are protected by the First Amendment. Nevertheless, the pre-trial judgments made by the Delaware court significantly restricted our defenses and trial.”
In its statement, Fox recognized “the Court’s rulings finding certain claims about Dominion to be false,” but it did not apologize or admit fault as part of the settlement in Dominion’s defamation complaint against it.
The second voting system maker, Smartmatic, is still suing Fox, this time for $2.7 billion. Fox will have more options for defense than it had in the Delaware court that heard the Dominion case, according to Murdoch, who informed investors that the case is “fundamentally different” from that one. He said the trial in that matter is unlikely to take place until 2025.
Although the settlement with Dominion was finalized on April 18, it was included in Fox’s fiscal third quarter report, which ended on March 31. Fox had a respectable fiscal quarter, even when one disregards Tuesday’s reported special items and litigation expenses.
Compared to $459 million in the previous year, its adjusted profits were $494 million, or 94 cents per share. Compared to the 87 cents per share predicted by the analysts polled by Refinitiv, it was an improvement. The corporation benefited from the advertising income and profit it made from showing the Super Bowl this year.
Company revenue increased somewhat beyond predictions, increasing 18% to $4.1 billion. The majority of the increase came from a 43% spike in ad income, which was boosted significantly by $650 million worth of Super Bowl advertisements. In 2022, the Super Bowl was not shown on Fox.
Fox has more than enough cash on hand to cover the payment. The company reported having $4.1 billion in liquid assets as of March 30, which was almost three weeks prior to the settlement being finalized. As part of a $7 billion share buyback strategy, it also disclosed that it repurchased $1.8 billion worth of shares in the nine months ended March 31. As of this writing, Fox’s share repurchases total $4.4 billion.
Murdoch said that Fox would be better able to weather the potential income loss and production delays caused by a protracted WGA strike than many other media businesses. The strike began last week and has already darkened certain programming, such late night broadcasts, and paused production on other shows.
Murdoch countered that Fox is better off since the strike will have less of an impact on its sports and news businesses.
“The network’s balanced mix of scripted and unscripted content puts us in a tremendous position,” he said.
Investors were aware of the settlement’s impact before the report was released. Fox (FOX) stock was up only around 1% in trade after the report’s release, despite the better-than-expected results.
