Twenty-First Century Fox reported stronger subscription video on demand (SVOD) revenue in its Filmed Entertainment segment for its first quarter (ended Sept. 30), along with increased Television segment sales that were boosted by a 22% jump in advertising revenue from a year ago.
Those improved results helped the company report total revenue grew to $7.2 billion from $7 billion, while profit attributable to Fox shareholders increased to $1.3 billion (69 cents a share) from $855 million (46 cents a share).
Fox didn’t hold an earnings call. But, commenting on the results in an earnings news release Nov. 7, Fox executive chairmen Rupert and Lachlan Murdoch said: “We continue to deliver against our growth plan even as we make important strides toward completing our Disney transaction and launching FOX in the first half of 2019.”
They added: “We have assembled a stellar leadership team for” the new version of Fox that will exist following the completion of the Disney transaction, “giving us further confidence in the new company’s ability to capture opportunities in live programming while delivering long-term value for shareholders. Our quarterly performance builds on the operational and financial achievements of last year and sets up our businesses for continued momentum under both the enlarged Disney and the future Fox.”
Disney announced last year that it was buying a large percentage of Fox’s film and TV assets for $52.4 billion.
Filmed Entertainment was helped in Q1 by higher SVOD licensing of Fox animated TV content, the company said in the earnings announcement. But that wasn’t enough to offset weaker theatrical revenue from Fox’s film studio than a year ago, it disclosed. Total Filmed Entertainment revenue decreased 7% to $1.8 billion.
Television revenue grew to $1.3 billion from $1.1 billion as ad revenue grew thanks to a higher volume of sports in this year’s Q1, including FIFA World Cup matches and more National Football League (NFL) games compared to last year, as well as higher political ad revenue related to the midterm U.S. elections at the Fox TV stations, it said. Retransmission consent revenue grew 19%, “reflecting contractual rate increases,” it said. But the revenue increases were “partially offset by 17% higher expenses due to higher sports programming costs reflecting the higher volume” of NFL games and FIFA World Cup matches this time, it said.
Cable Network Programming jumped to $4.3 billion from $4.2 billion. Domestic cable revenue increased 7%, “led by higher affiliate and advertising revenues partially offset by lower content revenue due to lower third-party licensing of scripted content at FX Networks,” Fox said. Domestic affiliate revenue increased 9%, driven by “continued contractual rate increases across all of our domestic brands,” while domestic ad revenue increased 7%, thanks mainly to higher pricing at Fox News, it said.