The paragraph is an introduction to the Fox Corporation Second Quarter Fiscal Year 2025 Earnings Conference Call. It includes remarks by the operator and Gabrielle Brown, Chief Investor Relations Officer, explaining that the call will include presentations by Lachlan Murdoch, John Nallen, and Steve Tomsic. Topics will include forward-looking statements and non-GAAP financial measures, with reconciliations available on the company's website. Lachlan Murdoch then begins by acknowledging the recent impact of the Los Angeles wildfires on Fox's staff.

The paragraph discusses Fox's efforts in community support and recent financial performance. Fox donated over $5 million for community recovery following fires, emphasizing the long-term nature of rebuilding efforts. It thanks employees and first responders for their work. On the financial front, Fox reported strong fiscal second-quarter results, with EBITDA more than doubling to $781 million and revenue growing by 20% to over $5 billion. This success is attributed to industry-leading growth in affiliate and advertising revenues, driven by significant viewership across various platforms including presidential election coverage and sports events. Total affiliate and advertising revenues saw substantial increases, with record political revenue contributing significantly.

In the quarter, Tubi significantly boosted advertising revenue, achieving a 31% increase, and this trend continues into Fox’s fiscal third quarter. Sports broadcasting, particularly the NFL postseason and the upcoming Super Bowl 59, have seen record demand and pricing. Advertising at Fox News is strong, with increased interest from existing and new advertisers, while Entertainment is experiencing high scatter pricing and low cancellation rates. Tubi is noted for monetizing its diverse, young, and predominantly cordless audience. This year, Tubi will exclusively offer a live stream of the Super Bowl, aiming to engage new users and provide access to its extensive library of content post-game.

The paragraph highlights the significant growth and dominance of FOX News across various platforms, emphasizing its large audience during key events like election night and the inauguration. FOX News was the most-watched cable network, significantly outperforming its competitors with a commanding share of the PrimeTime cable news audience. This success is attributed to both traditional cable viewership and digital platforms, such as YouTube, where FOX News also leads in viewer numbers. The shift in audience preferences towards digital and non-traditional media sources is evident, and FOX News sees these platforms as crucial to its growth strategy.

The paragraph highlights FOX News' commitment to journalism and their leading position in live sports event viewership, particularly during autumn with events like the Major League Baseball World Series and NFL games. Despite the decision not to proceed with the Venu sports streaming venture due to legal challenges, FOX remains focused on maximizing content distribution through traditional and digital platforms. The emerging trend of smaller, cost-effective sports and news bundles by distributors, which include FOX channels, is seen as beneficial for the company’s long-term strategy. Overall, FOX News is optimistic about its solid performance in the first half of the fiscal year and future prospects.

The paragraph highlights Fox's strong financial performance in the second quarter, noting a 20% increase in revenues and a 123% rise in EBITDA, with advertising revenues up by 21% due to factors such as significant political ad spending, strong MLB ratings, and Tubi's growth. Affiliate fee revenues grew by 6%, and other revenues increased by 70% due to higher sports sublicensing revenues. Despite increased rights costs offsetting some revenue growth, net income attributable to stockholders rose to $373 million, and adjusted net income was $442 million, marking a significant year-over-year increase.

The paragraph discusses financial performance in the cable and television segments. Cable affiliate fee revenues grew by 4% despite a 7% decline in subscribers, thanks to strong pricing. Sports sublicensing boosted other cable revenues by $350 million, but a 38% rise in expenses offset this due to increased sports amortization and production costs. In the television segment, revenues grew by 16%, driven by a 19% rise in advertising revenues, political ads, strong MLB ratings, and solid pricing across sports. Television affiliate fees increased by 9%, and other revenues were up 33% due to higher content revenues from entertainment production. Expenses in television saw a modest 3% rise due to investments in Tubi, but EBITDA grew by $343 million to reach $205 million. The company recorded a free cash flow deficit of $436 million due to seasonal working capital needs related to sports rights and advertising receivables, expected to reverse later in the fiscal year.

In the article, Fox Corp. has repurchased an additional $550 million worth of shares this fiscal year, bringing the total repurchased since 2019 to $6.15 billion, representing approximately 29% of its outstanding shares. The company plans to use the full $7 billion buyback authorization. Additionally, Fox announced a 27% per share semiannual dividend, resulting in a total return of approximately $7.9 billion to shareholders since its establishment, including both dividends and buybacks. The company's financial position is strong, with $3.3 billion in cash and $7.2 billion in debt. The paragraph concludes with an invitation for questions, where John Hodulik from UBS inquires about the direct-to-consumer (D2C) plans and affiliate business growth. Lachlan Murdoch emphasizes the continued value of the traditional cable bundle for consumers and the company.

The paragraph discusses the company's strategy of supporting traditional cable bundles while also addressing the growing audience of cord-cutters and cord-nevers. They're developing a new offering to cater to those outside traditional cable, which will include existing content without additional costs for exclusive rights. This service aims for modest subscriber expectations and will be affordably priced, targeting a launch by year's end. Steve Tomsic highlights that although subscriber loss has decreased, their strategy still centers on maintaining a strong presence in cable bundles, particularly through inclusion in "skinny bundles," reflecting their concentrated channel portfolio.

The paragraph is from a discussion involving Lachlan Murdoch about the strong performance of FOX News advertising and the Tubi Super Bowl live stream. Michael Morris from Guggenheim asks about sustained advertising demand at FOX News and the impact of the Tubi Super Bowl live stream. Lachlan Murdoch addresses the question by highlighting the arrival of over 100 new major national advertisers due to strong ratings, which continue to drive demand and pricing. He notes that ratings and revenue are accelerating into the third quarter, and emphasizes the positive post-election and inauguration momentum.

The paragraph discusses Tubi's strategy regarding their Super Bowl engagement, emphasizing that it is consistent with their existing strategy of leveraging their digital platform. The focus this year on Tubi during the Super Bowl is seen as a unique opportunity primarily for exposure, marketing, and capturing first-party data, which is crucial for programmatic advertising and driving CPMs. The costs associated with technology streaming are minimal compared to the potential benefits. The response to a question shifts to Lachlan Murdoch discussing Tubi's growth, investment in content, and the business's impact on FOX's EBITDA. Additionally, there is a brief mention of progress on sports betting licensing across various states.

The paragraph discusses the investments and future profitability expectations for Tubi, highlighting its positive advertising growth and its role in the company's revenue and EBITDA. It also covers the company's progress in obtaining sports betting licenses in 26 states, anticipated to be completed well before the 2030 option deadline. The discussion mentions the significant value of the company's stakes in FanDuel and its parent company, Flutter. Lastly, a question from Michael Ng of Goldman Sachs addresses subscriber trends and the potential benefits from inclusion in skinny bundles, as well as an expectation for digital losses to decrease from the mid-$300 million range last year to the high $200 million this year.

Lachlan Murdoch discusses the positive trends in subscriber numbers, noting a reduction in subscription declines for the second consecutive quarter and attributing some of this to seasonal factors like sports seasons. He refers to new "skinny" bundles offered by FOX on platforms like DIRECTV and Comcast, emphasizing that these bundles include the majority of FOX's channels and are financially beneficial for the company. Murdoch suggests that these bundles, described as "lean and mean," are appealing to both cord-cutters and traditional cable subscribers, ultimately benefitting FOX economically.

The paragraph discusses Fox's business strategies, particularly in digital investment and sports rights. Steve Tomsic highlights that Fox is on track with reducing digital investments and has saved around $40 million, partly due to improved EBITDA from Tubi. Moving forward, Tubi plans to increase investments around the Super Bowl for marketing and user acquisition. Lachlan Murdoch emphasizes the importance of Fox's reach in sports strategy, suggesting it remains a top priority when competing with companies like Netflix for sports rights. The paragraph ends with a query on whether Fox's direct-to-consumer plan includes content from FOX News or FOX Nation or if it is solely sports-focused.

The paragraph discusses Fox Corporation's strategy to expand their direct-to-consumer (D2C) services by making their content accessible on multiple platforms, targeting traditional linear platforms, cable distribution, digital MVPDs, and their own D2C services. The aim is to reach cord cutters and cord-nevers for a broad audience, focusing on both general viewers and sports fans. They plan to announce more details about the comprehensive D2C package, which will include sports and news content. The paragraph concludes with closing remarks from Gabrielle Brown, Lachlan Murdoch, and Steve Tomsic, ending the Fox Corporation's Q2 FY2025 earnings call.

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