The costs of settling a closely scrutinized defamation lawsuit levied by Dominion Voting Systems wiped out profit at Fox Corp., spurring a loss of more than $50 million in its third fiscal quarter despite seeing increases in revenue from advertising and distribution.
The costs of setting the suit — Fox agreed to pay $787.5 million to settle claims that Fox News personalities had deliberately passed along erroneous information about Dominion’s role in the 2020 presidential election — that it offset a 43% gain in advertising during the quarter due to Fox’s broadcast of Super Bowl LVII, typically an event that boosts corporate performance year in and year out.
Fox posted a loss of $54 million, or 10 cents as share, compared to profit of $283 million, or 50 cents a share, in the year-earlier period. It attributed the loss to “charges associated with legal settlement costs at Fox News Media.”
“Our fiscal third quarter once again demonstrated the effectiveness of Fox’s strategy to leverage the power of compelling live events to deliver for our viewers, advertisers, and distributors at scale,” said Fox CEO Lachlan Murdoch, in a prepared statement. He did not address the lawsuit. “During the quarter,
the largest audience in U.S. television history gathered to watch Fox Sports’ broadcast of Super Bowl LVII,
underpinning our delivery of double-digit revenue growth, and providing a promotional gateway to Fox’s
entertainment and news brands.”
Fox said the settlement costs weighed on the operations of its cable-programming unit, where revenue fell to $1.57 billion from $1.58 billion in the year-earlier period. Affiliate fees were flat with last year due to subscriber declines, while ad revenue was off by about $23 million due to “the continued impact of elevated supply in the direct response marketplace at Fox News Media.” Cash flow also declined due to higher legal costs associated with Fox News and higher costs tied to the USFL and World Baseball Classic.
Revenue from broadcast TV operations rose 36%, or $655 million or 36%, as add revenue rose 61% due to Super Bowl LVII and more NFL games than in the year-earlier period. Affiliate fees rose 9%, or $64 million.
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