A slowdown in direct-response advertising at Fox News channels will continue to hamper the company's ad business through the first six months of this year.
“[There is] ongoing softness in direct response advertising at the company’s Fox News business,” says Michael Morris, media analyst for Guggenheim Securities. “We believe that DR [direct response advertising] weakness indicated on the fiscal second quarter [ending December 31] earnings call developed late in the quarter.”
He projects this will continue for the first six months of 2023.
Morris estimates Fox's cable networks -- including Fox News Channel -- to be down 10% to $307 million in advertising revenue for its fiscal third-quarter period, and 7% lower to $334 million for its fiscal fourth-quarter 2022.
But Guggenheim Securities also projects overall advertising growth at its Fox Television unit -- the Fox TV network and its stations, for the next quarterly earnings period ending March 31-- will climb 62.3% to $1.57 billion, driven by strong Super Bowl advertising results; the game aired last month. Affiliate fees are expected to rise 7% to $750 million.
Morris also notes Fox Corp.'s free ad-supported service Tubi will see its advertising revenues rise an estimated 25%.
Overall Fox Corp. revenue for earnings period ending March 31 is projected to improve 18% to $4.1 billion.