Fox Corporation

This is our first report on Fox Corporation, one of the world’s largest mass media companies. Fox continued to perform well in the second quarter, with a 4% increase in revenue and a 71% increase in EBITDA, resulting in an all-around beat. Their revenue growth was driven by a 4% increase in advertising revenues. In the quarter, political advertising at the stations continued to be strong, and when considered over the entire fiscal first half, it almost matched the political record set during the 2020 presidential cycle. Sports advertising was also aided by the full schedule of major events and the ability to maintain its rapid expansion. With minimal renewal activity impacting the quarter and consistent trailing 12-month subscriber losses at around 7%, their affiliate revenues increased by 1%. Besides that, the company produced a 6% revenue growth in the television industry, including a 5% increase in ad revenue. They achieved substantial improvements across the segment, driven by the robust political cycle, Fox Sports’ acquisition of the World Cup, and Tubi’s ongoing strong development. We initiate coverage on the stock of Fox Corporation with a ‘Hold’ rating.