Fox reports $54m loss for first three months of 2023
US TV company Fox Corporation reported a $54m loss for the first three months of 2023, after the company agreed to settle a lawsuit over claims that its Fox News division defamed electronic voting systems supplier Dominion in the aftermath of the contentious 2020 US presidential election.
The company said the loss was mostly “due to charges associated with legal settlement costs at Fox News Media”.
On an earnings call with analysts on Tuesday, the Fox Corp chief executive, Lachlan Murdoch, said the $787.5m settlement was a “business decision to resolve the dispute to avoid the acrimony of this trial and a multi-year appeal process”.
The closely watched defamation case was settled last month just before opening statements were to be read in the Delaware court. Murdoch said Tuesday that “the Delaware court severely limited our defenses and trial through pre-trial rulings”.
The company said it had $4.1bn in cash as of 30 March, three weeks before the Dominion settlement was reached.
Fox News is still facing a $2.7bn lawsuit from a second voting machine manufacturer, Smartmatic, which Murdoch said was “fundamentally different” from the Dominion case. He predicted that the case, filed in New York, won’t go to trial until 2025.
The $54m loss for the company, which compares to a profit of $283m a year ago, came despite Fox earnings climbing 18% to $4.08bn in the first three months of the year, more than analysts had been expecting.
The company said sales were boosted by a 43% jump in Super Bowl advertising revenue, which it had earlier predicted would gross $600m in ad revenue.
The 51-year-old Fox CEO said the company was “well-positioned” to withstand the WGA writer’s strike that has crippled new film and TV production in Hollywood and looks set to last for months.
“We think that with our strategic priorities and strategy in sports, but also in news, these are two areas that are not effected by the writers’ strike and the audience will pivot when watching television to those categories,” Murdoch said.
The Murdoch scion added that the Fox Network only programs two hours of scripted and unscripted content entertainment a night “so we feel very well positioned there not to be affected by the writers’ strike really at all”.
Fox has said it’s looking for mergerand-acquisition targets after calling off a plan to merge with newspaper division News Corp and authorized a $3bn increase to a $7bn stock-buyback plan.
After Fox News fired its mostwatched primetime host Tucker Carlson last month, its stock dropped by $590m and its ratings have suffered. “There is no change to our programming strategy at Fox News,” said Murdoch, suggesting that Carlson’s firing was a tweak in its strategy, not a departure.
“As always, we are adjusting our programming and lineup and that is what we continue to do,” Murdoch continued. “We’re proud of our Fox News team, the exceptional quality of their journalism and their stewardship of the Fox News brand.”
Murdoch skirted the issues that led to the Dominion claim. “We always acted as a news organization reporting on the newsworthy events of the day,” he said, adding that he remained “confident in the merits of our position that the first amendment protects a news organization’s reporting and allegations being made by a sitting president of the United States.”
Fox News did not, under the terms of its Dominion settlement, offer any direct admission of wrongdoing in its airing of false election claims although it did acknowledge “the Court’s rulings finding certain claims about Dominion to be false”.