• by Wayne Friedman , February 7, 2024

Fox Corp. cable TV advertising revenue in the last three months of 2023 -- specifically coming from Fox News Channel -- sank 23% year-over-year to $348 million, missing analyst projections by around 7%. 

"We think the Presidential election could be setting up for a weaker news cycle,"” writes Steven Cahall, media analyst for Wells Fargo Securities.

Fox Television Networks and Fox TV station advertising revenue sank 19% to $1.65 billion -- basically in line with expectations. 

Fox's affiliate revenue had better news. Cable TV affiliate revenue -- from all Fox networks including Fox Sports -- was 2% higher versus expectations to $1.03 billion.

TV station affiliate revenue grew 10% to $756 million.

There will continue to be a major focus on the outlook for Fox News Channel going forward. “Fox News is likely 75% to 80% of Fox Corp. earnings/cash flow,” says Cahall, adding that this is mostly driven by affiliate revenue. 

He estimates Fox News Channel has more than ten times the linear TV subscribers versus its viewers. The downside is that Fox News will produce lower earnings as cord-cutting grows. 

But benefits (as well as some less positive trends) could come from a potential new business. 

Fox -- with ESPN and Warner Bros. Discovery -- announced on Tuesday that they will be starting up a major sports streaming joint venture where all its sports and associated TV networks would be available for viewers. At the same time, major new sports streaming apps will likely accelerate cord-cutting of the linear pay TV business.

Company-wide revenues were down 8% to $4.23 billion, with cash flow (adjusted earnings before interest, taxes, depreciation and amortization) 35% lower to $350 million.

Fox Corp. stock was down 5% to $27.95 in early Wednesday trading.