A Fox Sports television camera during a game between the Utah Utes and the USC Trojans on October 21, 2023, at Los Angeles Memorial Coliseum in Los Angeles, CA.

Brian Rothmuller | Icon Sportswire | Getty Images

Fox Sports drove higher consumption overall for Fox Corp. last quarter, CEO Lachlan Murdoch said Thursday during the company’s quarterly earnings call.

Consumption data showed viewing of all Fox brands was up 2% during the fiscal year first quarter, the company reported.

“FOX Sports was a big driver of that consumption, especially with its broadcast of the Women’s World Cup, where the U.S. versus the Netherlands on Fox with the most watched Women’s World Cup game match ever on U.S. English language television,” Murdoch said.

But as the media giant doubled down on sports programming, it certainly paid the price.

Sports programming costs drove expenses higher, weighing on profit and offsetting revenue growth in the company’s TV segment. The company posted a net income of $415 million in its earnings report, down 33% from the $613 million a year earlier. Fox cited the Women’s World Cup and the renewal of National Football League rights as major costs.

Sports programming is a consistent ratings beast for TV networks. A whopping 113 million viewers tuned into Fox to watch the Super Bowl earlier this year, the third highest of all time. But it comes with a massive price tag, especially as linear networks and streaming services have begun battling it out for programming rights.

Last year, YouTube won the rights to NFL Sunday Ticket after the online streaming giant handed over $2 billion a year. DirecTV had previously paid $1.5 billion annually for the rights.

Ad revenue and the cable bundle

Fox’s ad-supported streaming service, Tubi, which the company acquired in 2020, posted favorable results. Fox said Tubi surpassed 70 million monthly active users in September, up from the 64 million monthly active users Tubi announced in February.

Fox said it’s not looking to bring live sports to Tubi. The streamer will remain focused on entertainment content, Murdoch said during the earnings call.

Overall ad revenue slid 2% during the quarter when compared to a year ago, when the company benefited from political ads in the lead-up to midterm elections at the time, the company reported.

The growth of Tubi and viewership of the Women’s World Cup helped offset the softened advertising market last quarter, Wolfe Research analyst Peter Supino said in a Thursday note.

Fox is also standing firmly by the cable bundle, where its conservative-leaning Fox News channel continues to thrive, even as an increasing number of subscribers cut the cord.

“The cable bundle remains our largest and most important revenue stream,” Murdoch said during the earnings call. “We believe that it will remain our largest for years to come.”

Analysts at Morgan Stanley are on board with the devotion to the bundle.

“Fox is relatively insulated but not immune from the continued weakness we are seeing in general entertainment linear TV,” said analysts at Morgan Stanley in a Thursday note.

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