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Fox Surpasses Quarterly Estimates, Increases Buyback Authorization by $5 Billion

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Fox Corp (FOXA.O) reported quarterly revenue and profit that exceeded Wall Street expectations, driven by strong advertising growth, rising affiliate fees, and the expanding audience of its free ad-supported streaming service, Tubi. The company also announced an increase of $5 billion to its share repurchase authorization.

In the fiscal fourth quarter, revenue from affiliate fees rose 2.6%, supported by growth across both cable and television segments. Despite challenging comparisons with last year’s major international sports events like Copa America and the UEFA European Championship, Fox benefited from improving advertising trends. Advertising revenue grew 7.1%, fueled primarily by digital growth led by Tubi and higher news ratings and pricing.

Tubi’s growth strengthens Fox’s position in the fast-expanding ad-supported streaming sector, attracting younger, cord-cutting viewers who are less reachable via traditional TV. Building on this momentum, Fox plans to launch a subscription-based streaming service, Fox One, on August 21 at $19.99 per month to extend its reach beyond cable TV.

In June, Fox expanded its sports broadcasting footprint in Mexico by acquiring Caliente TV, a sports-focused streaming platform and television channel.

Fox’s total revenue for the quarter rose 6.3% to $3.29 billion, beating estimates of $3.12 billion. The cable network programming unit posted nearly 7% revenue growth to $1.53 billion amid the ongoing shift to digital streaming.

Adjusted earnings per share came in at $1.27, surpassing analysts’ estimates of 99 cents.

Streaming Surpasses Broadcast and Cable TV Viewing in US for the First Time

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Streaming services have overtaken traditional broadcast and cable television in the United States, capturing a larger share of viewers in May than the two combined, according to Nielsen’s monthly report, The Gauge, released Tuesday.

In May, streaming accounted for 44.8% of total TV usage in the U.S., marking a significant milestone in the shift toward digital platforms. Leading the charge, YouTube alone held a 12.5% share of all television viewing, the highest for any streaming service.

Free ad-supported streaming services such as PlutoTV, Roku Channel, and Fox’s Tubi also gained traction, collectively attracting 5.7% of total TV viewers, Nielsen said.

In comparison, traditional broadcast TV accounted for 20% of viewership, while cable TV held 24% in May.

The rise of streaming, which accelerated during the COVID-19 pandemic as viewers sought home entertainment options, underscores a fundamental change in how audiences consume content. On-demand viewing is increasingly favored over scheduled programming, reshaping the media landscape and affecting both advertisers and content creators.

Paramount to Cut 3.5% of U.S. Workforce Amid Industry Disruption

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Paramount Global is set to lay off 3.5% of its U.S. workforce as part of ongoing efforts to adjust to sweeping changes in the media industry, according to an internal memo reviewed by Reuters. The job cuts, announced to employees on Tuesday morning, may eventually extend to some international staff, the memo from the office of Paramount’s three co-CEOs indicated.

This new round of layoffs follows a previous 15% staff reduction announced in August 2024. The moves come as Paramount, like many traditional media companies, faces mounting challenges due to the rapid shift away from cable television toward streaming platforms such as Netflix. The company’s leadership cited the broader “generational disruption” affecting the industry as millions of consumers continue to abandon pay-TV subscriptions.

“We are taking the hard, but necessary steps to further streamline our organization starting this week,” co-CEOs George Cheeks, Chris McCarthy, and Brian Robbins stated in the memo.

As of December 31, 2024, Paramount employed approximately 18,600 people globally. CNBC first reported the latest job cuts on Tuesday.

The layoffs occur as Paramount is in the midst of attempting a major corporate merger. The company has proposed an $8.4 billion deal with Skydance Media, led by billionaire David Ellison. However, regulatory approval for the merger remains pending. Complicating matters is a $10 billion lawsuit filed by former U.S. President Donald Trump against CBS News, part of Paramount Global, over allegations that a 2020 interview with then-vice president Kamala Harris was deceptively edited to her advantage.