Fox revenue looked a bit like a fairy tale last quarter – a 44% jump in ad sales even with the coronavirus nipping – but the page turns in the current quarter as company executives anticipate local station advertising will fall 50% year-on-year.
The fiscal fourth quarter ending in June will see dips in local auto, retail and travel along with a trough in political advertising, which, however, will pick up dramatically in the first quarter. Fox has a June fiscal year.
Including national advertising, the collective revenue hit this quarter will be an estimated $200 million-$240 million, down about 25%-30% from the prior year, said CEO Lachlan Murdoch on a conference call to discuss Fox’s latest financial results.
“We can’t really say from a local perspective how local markets are going to recover as states and municipalities lift their shelter-at-home orders. But we are beginning to see positive signs in the pacing going forward.,” Murdoch said. “Over the last two weeks, including national … we’ve seen a severe lessening of [advertiser] requests for flexibility with advertising. Advertisers and marketers are starting to look forward into the next quarter of the next fiscal year. So it’s early days, but we’re just beginning to notice that positive shift.”
In political, the end of last quarter was a record while the current fourth quarter is always rough before advertisers start to kick it up again into the fall. “We believe we are still on track for a record political season,” Murdoch said, noting that half of Fox markets are in battleground states, ten in states with Senate races and two with gubernatorial contests — besides the House races in all markets.
Also key is sports, which make up 40% of ad sales and fortuitously felt little pain from canceled events last quarter save for some pre-season Nascar races and a bit of college basketball. Nascar plans to resume May 17. The NFL is set to release its 2020 schedule tomorrow evening. “We’re pleased about that. It will let us be much more specific in our conversations with advertising clients,” Murdoch said.
As for another partner, WWE, “We have to give a shout out to them. They have done a tremendous job delivering us live content week in and week out under difficult circumstances.”
It will be another story for Fox if a start to baseball or football runs into trouble. “We are in close contact will all our sports partners. We’ll look to them. Whenever they are ready to start, we will be reay to produce and to broadcast,” said Murdoch.
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