The FOX Corporation held an earnings call for the fourth quarter of fiscal year 2023, with Lachlan Murdoch, Executive Chair and Chief Executive Officer; John Nallen, Chief Operating Officer; and Steve Tomsic, Chief Financial Officer in attendance. The call included forward-looking statements and non-GAAP financial measures such as adjusted EBITDA. For the full year, FOX Corporation reported record annual revenue and EBITDA.

FOX reported revenue growth of 7%, including 12% advertising growth, supported by major tentpole events like the midterm election, Super Bowl LVII and the FIFA Men's World Cup. FOX's broadcast of Super Bowl LVII was the most watched TV show of all time, FOX News maintained its lead as both a top-rated national cable news channel and the top-rated network across the entire cable ecosystem, and Tubi made its debut in Nielsen's The Gauge, growing total consumption in fiscal 2023 by 79%. Additionally, Tubi was recognized by Nielsen as America's most watched AVOD service, won five Cannes Lions awards, and had expanding content library and TBT metrics.

Tubi had a successful fiscal fourth quarter, with revenue growth of 47% and total viewer time growing by 65%. FOX News Media also had a successful year, with FOX News Channel ending the fourth quarter as the most watched cable network in total day, and FOX Business Network ending the quarter as the most watched business cable news network. Anjali Sud is the new CEO of Tubi and FOX News' new prime time lineup has been up over 35% in total viewers and 40% in the 25 to 54 demographic since its mid-July debut.

FOX had a successful year with multiple wins, a record midterm election sales cycle, and a successful upfront with strong price and volume across its live sports and news offerings. Tubi is also seeing further momentum in revenue and TBT growth. The Women's World Cup broadcast was the most watched group stage match ever on US English language television. FOX is poised for a strong year with advertising support for the Women's World Cup and American football in September.

Fox delivered strong financial results for the 2023 fiscal year, with total revenue growth of 7% and record EBITDA. Advertising revenues increased 12%, driven by the Super Bowl, FIFA Men's World Cup, midterm election cycle, and Tubi's momentum. Distribution renewal impacted the total company affiliate fee revenues, with an 8% increase year-over-year. Fox ended the quarter with $4.3 billion in cash and $7.2 billion in debt, giving them a net leverage ratio of one-time.

Fox reported total company revenues of $3.03 billion in the fourth quarter, consistent with the amount reported in the same period the previous year. EBITDA was down due to the cyclical comparison with the prior year's midterm election and advertising impacts on their FOX News and FOX Entertainment businesses. Total company affiliate revenues grew 3%, while total company advertising revenues decreased 4%, primarily due to lower political advertising revenues at their television stations and a softer direct response marketplace of FOX News Media. Total company other revenues saw a 5% increase due to the impact of MarVista, TMZ and Studio Ramsay Global, as well as higher FOX Nation subscription revenues. Net income attributable to stockholders was up, with adjusted net income increasing 17% and adjusted EPS up 26%. Tubi's revenue was up 47% due to increased engagement and stable pricing.

Cable networks saw a 3% decrease in revenue year-over-year, with affiliate fees down 2% due to subscriber declines and advertising revenues down 11%. Television segment saw a 4% increase in revenue due to a 9% increase in affiliate fee revenue due to pricing growth. Net income attributable to stockholders increased to $375 million and adjusted EPS increased 19% to $0.88 per share.

Television advertising revenues fell 1% in the quarter, while television other revenues grew 8%. Quarterly adjusted EBITDA at the Television segment remained flat compared to the prior year quarter. For the full year, the company generated free cash flow of $1.4 billion. In fiscal 2024, the company expects to have improved margins at the cable sports networks, the benefit of affiliate revenue renewals towards the back half of the year, and continued investments in growth initiatives.

Fox returned $2 billion of capital to shareholders in fiscal 2023 through the repurchase of 46 million Class A shares and 7.5 million Class B shares, as well as dividend payments of over $260 million. The company also announced an increase in its semiannual dividend to $0.26 per share, bringing the total capital returned to shareholders since the spin in 2019 to over $6 billion. Fox ended the quarter with $4.3 billion in cash and $7.2 billion in debt.

Lachlan Murdoch of FOX Sports states that their priority is to protect their premium sports content by placing it behind a paywall in the traditional cable and satellite pay-TV universe. However, they are open to placing content in front of consumers in whichever manner makes the most sense, as long as it is behind a pay wall and they receive full value for their rights and brands. Murdoch believes that both the pay-TV universe and direct-to-consumer universe will be important in the future.

The company is pleased with their results from the national advertising perspective, with strong categories like automotive, travel, and pharmaceuticals. Locally, they are pacing flat to slightly up ex-political, including digital revenues. They are also seeing strong financial services and health, but offset by softness in retail, telecom, and wagering. The company has the strongest balance sheet and there are attractive assets available at depressed multiples.

Lachlan Murdoch and Steve Tomsic discussed their balance sheet, which gives them the flexibility to look at opportunities to return capital to shareholders through dividends and share repurchases. They have repurchased $2 billion worth of shares this past year, but did not find any attractive M&A opportunities. They will balance up return of capital and accretive value opportunities on a daily basis to deliver the best long-term shareholder value. They also noted that their content spend for the upcoming year is heavily influenced by the fact that they do not have a Super Bowl running through the amortization line of their content costs.

Flutter exercised its right to terminate the FOX Bet joint venture, which had been funded entirely by Flutter. This was due to Flutter wanting to focus on its other brand, FanDuel. FOX Bet's closure was anticipated by the company, which still aspires to be an operator of a sports wagering business. There are no financial implications from the closure.

Flutter funded FOX Bet, and after the potential outcome of moving away from FOX Bet, Flutter negotiated to have an 18.6% option in FanDuel, which is estimated to be worth up to $2 billion. Flutter also invested $400 million in Flutter, which is now worth over $800 million. Flutter is now free to work with any of the other betting operators.

Lachlan Murdoch discussed the long-term strategy for Tubi, including its programming and financials. He also discussed the financial impact of the Big Ten's expansion, noting that it will become the Big 16.

Anjali is joining the Tubi business as CEO on September 1, and the TBT growth has been driving advertising opportunities and revenue. Tubi is primarily built on an on-demand platform, and the library of movies and TV shows continues to grow with 60,000 titles and 200,000 hours of content. The company will be looking at expanding the categories of content they are strong in.

Steve Tomsic discussed the EBITDA investment in Tubi, which was in the low to mid negative 200 range in fiscal 2022, and is expected to remain at the same or higher level in fiscal 2024. Lachlan Murdoch then discussed the addition of the University of Oregon and University of Washington to the Big Ten conference, which is expected to strengthen FOX Sports' football franchise and partnership with the Big Ten Network.

Lachlan Murdoch states that Fox has a strong relationship with their affiliates and they are aware of the challenges that broadcast television faces. Fox is proud to have protected their key sports franchises for pay-TV and they keep them exclusive for their distribution partners. They are confident they will be able to continue to drive industry-leading pricing in both a pay and free universe and that this will balance out any reduction in subscribers. The conference call ends with Gabrielle Brown thanking everyone for joining.

This summary was generated with AI and may contain some inaccuracies.