10-KPeriod: FY2022

Fox Corp Annual Report, Year Ended Jun 30, 2022

Filed August 12, 2022For Securities:FOXAFOX

Summary

Fox Corporation's fiscal year 2022 filing highlights a company navigating a dynamic media landscape with resilient performance in its core news and sports segments, while continuing to invest in digital growth. The company reported increased revenues driven by higher affiliate fees and advertising, reflecting strong performance in FOX News Media and FOX Sports, alongside growth in its AVOD service, Tubi. Despite these revenue gains, net income saw a significant decrease year-over-year, largely due to unfavorable year-over-year comparisons in "Other, net," which included a substantial reimbursement from Disney in the prior year and a fair value adjustment on an investment. The company continues to prioritize its iconic brands and live, "appointment-based" content as key differentiators. Key strategic priorities for fiscal 2022 included maintaining leadership in live news, sports, and entertainment, driving revenue growth through high-quality content, and expanding digital distribution. Acquisitions of MarVista Entertainment and TMZ, along with the formation of Studio Ramsay Global, are aimed at strengthening content capabilities. The company also made significant investments in sports rights, including an extended agreement with the NFL and acquisitions of UEFA international soccer rights. Looking ahead, Fox Corporation remains focused on adapting to evolving consumer behavior and technological advancements to sustain its competitive position and drive long-term shareholder value.

Financial Highlights

51 data points
Beta

Revenue

$13.97B

Net Income

$1.21B

8.6% Net Margin

EPS (Diluted)

$2.11

Total Assets

$22.18B

Cash & Equivalents

$5.20B

Free Cash Flow

$1.58B

Financial Statements
Beta
Revenue$13.97B
SG&A Expenses$1.92B
Interest Expense$377.00M
Net Income$1.21B
EPS (Basic)$2.13
EPS (Diluted)$2.11
Shares Outstanding (Diluted)570.00M

Key Highlights

  • 1Total revenues increased by 8% to $13.97 billion in fiscal 2022, driven by an increase in affiliate fees (up 7%) and advertising revenue (up 9%).
  • 2Segment EBITDA for Cable Network Programming grew by 2% to $2.93 billion, supported by higher affiliate fees and advertising, despite increased programming and digital investment costs.
  • 3The Television segment saw a 9% revenue increase but a 37% decrease in Segment EBITDA, largely due to higher sports programming costs and digital investments at Tubi, which offset revenue growth.
  • 4Net income attributable to Fox Corporation stockholders decreased by 44% to $1.21 billion in fiscal 2022, primarily impacted by a $462 million reimbursement from Disney in the prior year and a negative fair value adjustment of $386 million on equity investments.
  • 5The company repurchased approximately 27 million shares of common stock for $1 billion during fiscal 2022 as part of its $4 billion stock repurchase program.
  • 6Fox Corporation continues to invest in digital growth, including its AVOD service Tubi, which reported nearly 40% growth in total view time year-over-year.
  • 7Strategic acquisitions in fiscal 2022 included MarVista Entertainment and TMZ, aimed at enhancing content production capabilities.

Frequently Asked Questions

Revenue growth was primarily driven by increases in affiliate fees, largely due to higher average rates from contractual increases and renewals, and advertising revenue, boosted by higher pricing at FOX Sports and FOX News Media, and growth at Tubi. A full schedule of college football games and increased live sports events compared to the prior year also contributed.

The decrease in net income was primarily due to unfavorable year-over-year comparisons. This included the absence of a $462 million reimbursement from Disney received in fiscal 2021 related to a tax prepayment, and a substantial negative fair value adjustment of $386 million on the company's investment in equity securities (specifically Flutter), compared to a gain in the prior year.

Fox Corporation is focusing on several strategies, including negotiating favorable affiliate fee increases in renewals, expanding its digital distribution offerings such as Tubi (an AVOD service) and FOX Nation (an SVOD service), and leveraging its strong brands and popular content, particularly live sports and news, to maintain audience engagement and advertising appeal across various platforms.

Fox Corporation's strategy centers on maintaining leadership in news, sports, and entertainment through iconic brands and "appointment-based" content. Key initiatives include investing in live sports rights (like the NFL and UEFA soccer), expanding its production capabilities through acquisitions (MarVista Entertainment, TMZ), growing its digital platforms (Tubi, FOX Weather), and exploring direct-to-consumer opportunities.