The News Corporation headquarters, which is also home to Fox News, stands in Manhattan on April 18, 2023 in New York City.
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Fox Corp. reported a quarterly net loss on Tuesday due to the costs related to its settlement with Dominion Voting Systems, despite revenue that was lifted by the Super Bowl and its fast ad-supported streaming service Tubi.
Fox notched $4.08 billion in quarterly revenue, up 18% from the same period last year. Its advertising revenue soared on the back of the Super Bowl — the most watched program in U.S. TV history with 115 million viewers, which brought in approximately $650 million in gross ad revenue. The company also saw a boost after airing more NFL games during the season and from increased viewership for Tubi.
The company said Tuesday it swung to a $54 million net loss, or 10 cents per share, in its fiscal third quarter ended on March 31, from a profit of $283 million, or 50 cents per share, in the year-earlier period on charges associated with settlement costs.
Last month, Fox agreed to pay $787.5 million to Dominion to settle a defamation lawsuit over false claims the company’s voting machines swayed the outcome of the 2020 presidential election.
While the company is unlikely to see a big dent in its bottom line from the Dominion case, it did face elevated legal costs in recent quarters related to the lawsuit due to depositions and pretrial preparation, finance chief Steve Tomsic said Tuesday.
Executives added they didn’t expect the litigation costs to affect share buybacks.
The settlement stopped in its tracks a trial that was slated to include appearances from top executives including Chairman Rupert Murdoch, as well as Fox News talent, on the witness stand.
“We made the business decision to resolve this dispute and avoid the acrimony of a divisive trial and a multiyear appeal process, a decision clearly in the best interests of the company and its shareholders,” CEO Lachlan Murdoch said on Tuesday’s earnings call. “The settlement in no way alters Fox’s commitment to the highest journalistic standards across our company or our passion for unabashedly reporting the news of the day.”
The CEO said on Tuesday that the Delaware court had “severely limited” its defenses due to a pretrial ruling. Among the challenges he pointed to was the judge’s ruling that Fox could not use newsworthiness as a defense.
The company has previously said, and Lachlan Murdoch echoed Tuesday, that Fox “always acted as a news organization, reporting on the newsworthy events of the day,” which includes allegations that were being made publicly by then-President Donald Trump and his allies. Fox has argued it was protected by the First Amendment, which the CEO echoed on Tuesday when discussing the remaining defamation lawsuit Fox faces from Smartmatic USA, another voting-tech company.
Lachlan Murdoch noted the Smartmatic case is moving at a “fundamentally different pace” than Dominion, as it is likely to go to trial in 2025, but that all of Fox’s First Amendment defense remains.
Soon after the settlement with Dominion was announced, the network fired top on-air host Tucker Carlson, a surprising move for the network which has seen high ratings for the prime-time program “Tucker Carlson Tonight.”
On Tuesday, the Fox CEO said there would be no changes to prime-time programming strategy, noting the network is “always adjusting our programming and our lineup and that’s what we continue to do.” Fox is the top-rated cable news channel, even as prime-time ratings in Carlson’s slot have slid since his departure.