Fox Corp. held its full year earnings call on August 8. During the call, Fox. Corp CEO Lachlan Murdoch made clear that the company would seek “industry-leading” price increases on its properties.
When you take the jargon out of this statement, it simply means that Fox Corp. will seek more money from cable and satellite providers (the “affiliates”) for all of its channels given the sports properties that it has exclusive rights to air. Murdoch spoke extensively during the call about the NFL and Big Ten rights, as well as the company acquiring the rights to the UEFA 2024 European football championship.
This would mean a higher bill for consumers.
There are already signs that consumers won’t go along with this.
The Fox Corp. earnings release shows an eroding situation for Fox's cable channels – Fox News, Fox Business, and the Fox Sports channels – with a marked decline in affiliate revenue and ad revenue:
In the release, the company also described the impact of cord-cutting on its cable revenues, decreased advertising revenue at Fox News as well as bragging about its cost-cutting at the network:
Cable Network Programming reported quarterly segment revenues of $1.41 billion as compared to the $1.46 billion reported in the prior year quarter. Affiliate fee revenues were $1.03 billion as compared to the $1.04 billion reported in the prior year quarter, as contractual price increases were more than offset by the impact of net subscriber declines. Advertising revenues were $320 million as compared to the $358 million reported in the prior year quarter, primarily due to the continued impact of elevated supply in the direct response marketplace at FOX News Media. Other revenues increased $4 million or 7%, primarily led by higher revenues associated with the second season of the USFL.
Cable Network Programming reported quarterly segment EBITDA of $585 million as compared to the $628 million reported in the prior year quarter, primarily from the decline in total revenues. Expenses decreased in the quarter, largely due to lower digital investment and newsgathering costs at FOX News Media, partially offset by higher costs associated with the second season of the USFL.
The takeaway is clear: Consumers are still cutting the cord, and increased cable and satellite costs are not enough to offset — in fact they appear to only drive more consumers away. Fox Corp. and the Murdochs are not just determined to ride this death spiral for as long as it will go, but are openly declaring that they will lead it in order to extract the most costs from consumers as possible.
Relatedly, Fox Corp. Chief Financial Officer Steve Tomsic explained during the call that the company has one-third of its affiliate agreements up for renewal this year, including negotiations over the fees that networks are paid for every cable subscriber. Media Matters President Angelo Carusone discussed those “carriage” fees earlier this year in an MSNBC op-ed following Fox's record defamation settlement with Dominion Voting Systems, writing:
With the Dominion lawsuit settled, Fox will now put all of its energy into these carriage renewals. If Fox receives increased fees, they could amount to hundreds of millions more in revenue just from these three carriage deals alone. For Fox, success here necessitates that its audience be as fervent as ever. Accordingly, you can expect the network to raise the temperature of its simmering cauldron of deceit and extremism to a full-on boil. It has no other choice. It just paid $787.5 million to avoid public scrutiny and to avoid alienating its audience by being forced to tell the truth.
Cable and satellite companies just need to say no to any more of these ridiculous increases. Fox News is already wildly overpriced, and now its audience has severely eroded in recent years (more on that soon enough).
In the meantime, visit NoFoxFee.com to learn more about how to contact your provider to tell them not to raise your bill. Your participation matters: If no one contacts them, they’ll keep going along with the Murdoch price increases as they’ve done in the past — and the Murdochs will use that cash influx to continue to divide the country with lies.