Fox Corp Class A (NASDAQ:FOXA) overcame pandemic-induced challenges and even generate a decent quarterly revenue gain in its 2Q2021 thanks to its widely cast net.
The media giant generated $4.09 billion in revenue in its 2Q2021, which was 8% higher YOY despite major challenges and inconveniences caused by the pandemic. For example, the company’s cable network programing segment generated lower revenue from sports subleasing because college football games were cancelled due to the pandemic.
Fox managed to fill the missed revenue opportunities from the cancelled games by leveraging political advertising opportunities since 2020 was an election year. In fact, political advertising revenue contributed to a 14% overall boost in advertising revenue. Reduced amortization of sports programing rights also offset the lower revenues from sports sublicensing. The company benefited from digital and linear growth from the Fox News media division, as well as Tubi, Inc. consolidation. It also reported 6% growth in affiliated revenue from the TV segment.
3Q2021 forecasts
Fox expects a better 3Q2021 performance largely due to the recovery of segments affected by the pandemic. The sports subleasing segment in particular is expected to recover as the sports calendar resumes. The coronavirus vaccine rollout is expected to reintroduce normalcy, allowing for regular sporting and other activities to resume.
“We are looking forward to a return to normal entertainment and sports production schedules, and we are grateful to our colleagues and business partners who, during the pandemic, have ensured that our viewers are informed and engaged,” stated Fox CEO, Lachlan Murdoch.
Fox is confident that the sports segment which is one of the company’s most important business segments will recover. Meanwhile, other areas such as news, entertainment and TV stations continue to support the network’s continued growth and presence in the industry. The company’s digital strategy will also allow Fox to compete more effectively with the content streaming culture which has been challenging traditional media strategies in the past few years.