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Fox Corp CEO endorses 'center right' strategy; company beats revenue expectations

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·2 min read
FILE PHOTO: A Fox News channel sign is seen on a television vehicle outside the News Corporation building in New York City, in New York
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By Helen Coster and Eva Mathews

(Reuters) - Fox Corp Chief Executive Officer Lachlan Murdoch said Tuesday that Fox News head Suzanne Scott has extended her term with the company.

As the United States enters a new political era and far-right cable upstarts make a grab for viewers, Murdoch endorsed a strategy that has led Fox News to dominate cable news for 19 years.

“We believe where we’re targeted, to the center right, is exactly where we should be targeted,” said Murdoch on a call with investors. “We don’t need to go further right. We don’t believe America is further right, and we’re obviously not going to pivot left.”

Fox reported better-than-expected quarterly revenue on Tuesday, benefiting from an uptick in advertising spending during the U.S. presidential election and strong digital growth at Fox News.

Its revenue was also buoyed by higher affiliate fees and an influx of advertisers to its Tubi streaming service.

Fox News - the biggest driver of the company’s performance - ended January with a 19-year streak as the top U.S. cable news network, but ceded ground to AT&T Inc-owned CNN, which had record ratings as the top cable news network that month, according to Nielsen.

Fox has played to its ratings strengths by adding another hour of opinion programming at 7 p.m., among other post-U.S. election changes.

Murdoch did not address a lawsuit filed Feb. 4 by electronic voting systems maker Smartmatic, which sued Fox Corp and others, claiming they falsely accused Smartmatic of helping to rig the U.S. presidential election in favor of Joe Biden. Smartmatic seeks more than $2.7 billion in damages.

On Monday, Fox filed a motion to dismiss, stating that in its coverage it “fulfilled its commitment to inform fully and comment fairly.”

Fox’s focus on live news and sports sets it apart from other media companies that require huge content libraries to fuel their streaming services. Its sports rights include NFL (Sunday and Thursday), MLB and college football, among others, with NFL rights expiring after the 2022 season.

Fox is diversifying its business beyond cable TV - helping offset the impact of cord-cutting - with the expansion of its Fox News International streaming service and the forthcoming Fox Weather, a new advertising-supported streaming service and the company’s eighth platform.

Total revenue rose to $4.09 billion in the second quarter ended Dec. 31 from $3.78 billion, above Wall Street estimates of $3.99 billion, according to IBES data from Refinitiv.

Excluding items, the company earned 16 cents per share, while analysts' expected a loss of 3 cents per share.

In the fiscal second quarter, affiliate revenue grew 5.7% to $1.52 billion.

Shares were down 1.3%.

(Reporting by Eva Mathews in Bengaluru and Helen Coster in New York, Editing by Sherry Jacob-Phillips and Nick Zieminski)