Topline
Fox Corporation disclosed an eight-figure loss in its hotly anticipated quarterly earnings release Tuesday morning, revealing just how deep the recent costly wounds from its news division cut, though its CEO tried to convince investors the massive payout was a good thing for the company.
Key Facts
Fox reported a $54 million loss for the first three months of the year, a staggering drop from its $283 million profit during the same period last year.
In the report, the company attributed the loss “primarily” to “legal settlement costs” at Fox News, a nod to its $787.5 million settlement for a defamation lawsuit with Dominion Voting Systems related to the network’s 2020 election coverage.
Despite this massive drag on the bottom line, Fox CEO Lachlan Murdoch asserted it was a “business decision” in the earnings call.
It was in Fox’s “best interest” to “avoid the acrimony of a divisive trial,” Murdoch asserted.
Shares of Fox rallied 6% in early trading, on pace to touch their highest level since before the announcement of the Dominion settlement.
Crucial Quote
Murdoch stuck by the “exceptional quality” of Fox News’ journalism, declining to criticize the coverage of false claims of election fraud that led to nearly $1 billion in legal costs. “We’re proud of our Fox News team,” Murdoch added.
Surprising Fact
When asked a question on the fallout of the surprise April exit of Fox News’ top-rated host Tucker Carlson, Murdoch declined to offer much color, simply responding: “There’s no change to our [primetime]
programming strategy at Fox News.”
Key Background
Fox agreed to settle with Dominion on April 18, concluding a messy two-year legal saga stemming from Fox News hosts apparently backing false claims of fraud in the 2020 election spread by former President Donald Trump and his supporters. Just six days later, the company announced the departure of Carlson, sending its stock price spiraling and wiping out nearly $700 million in market capitalization.
Forbes Valuation
Murdoch’s father Rupert Murdoch, the chairman of Fox’s board of directors, is worth $17.5 billion, making him the 94th-richest person in the world, according to our latest estimates.
Tangent
Fox brass said it expects the impact of the Writers Guild of America strike to be minimal, echoing analysis from Evercore ISI strategists last week, naming Fox the best-positioned company relying on primetime network television to emerge from the situation fairly unscathed.
Fox Will Report First Earnings Since Dominion Settlement And Carlson Exit—Revealing Whether It’s In ‘Rebuilding Mode’ (Forbes)
Tuckered Out? Fox News’ Prime-Time Ratings Slump In Days Following Tucker Carlson’s Firing (Forbes)
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