If Rupert Murdoch’s Fox News is at all worried about recent ratings declines, the company hid its concern well. Mr. Murdoch’s powerhouse television business continues to see growth in revenue and profit, reporting gains on both items in its quarterly earnings report announced Tuesday.
Fox Corporation, led by Mr. Murdoch’s son Lachlan Murdoch, the chief executive, saw a 17 percent jump in pretax profit, to $305 million. It logged an 8 percent gain in sales, to $4 billion, for the three months ending in December, what the company considers its second fiscal quarter.
The company’s Fox broadcast stations helped drive much of that growth as local networks saw record political advertising during the presidential election season. The broadcast division saw a 10 percent bump in ad dollars, to $1.8 billion.
Despite losing the ratings crown to CNN in recent weeks, Fox News is still a profit machine. The Fox News division saw a 1 percent gain in revenue, to $1.49 billion, and a 3 percent increase in pretax profit, to $571 million. Advertising increased 31 percent, to $441 million, but the fees paid by cable operators to carry the network fell 3 percent, to $928 million, as more people cut the cord.
Lachlan Murdoch trumpeted the cable news network’s performance through last year, downplaying the recent downturn in viewership.
“The Fox News Channel finished the quarter with highest average ratings,” he said on an earnings call with analysts. “We are now seeing expected audience pullback since the election,” a phenomenon he described as “consistent with prior election cycles.” He expects audiences to eventually return to the network.
The company also announced a multiyear renewal contract for Suzanne Scott, the head of the network, dispelling any concerns that she may be replaced given its recent ratings performance.
But hanging over the company’s financial future is a defamation lawsuit recently brought against Fox Corporation by a little-known technology provider. The suit, filed by Smartmatic, whose system was used in the presidential election in Los Angeles County, is seeking at least $2.7 billion in damages against Fox Corporation, Fox News and several of its prime-time stars for participating in “the conspiracy to defame and disparage Smartmatic and its election technology and software,” according to the suit.
The financial penalty sought by Smartmatic appears to closely mirror the amount of profit Fox Corporation generates. For calendar year 2020, the company made about $3.1 billion in pretax earnings. Fox recently filed a motion to dismiss the suit.
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