Fox Corporation (FOX)

Comment l'entreprise gagne de l'argent

Two revenue streams do most of the work: advertising sold around news and sports broadcasts, and affiliate fees that distributors pay for the right to carry Fox channels, which are contractually renegotiated every few years. Live sports rights and news production are by far the largest costs, so profitability depends on renewing distribution deals at rates that keep pace with those costs even as the number of pay-TV households keeps shrinking every year.

Chiffre d'affaires par segment

Fox News and Fox Sports have built loyal audiences that keep watching live rather than switching to on-demand alternatives, which gives Fox real leverage when it negotiates affiliate fees with distributors. That loyalty is valuable but not unlimited: news and sports rights can in principle be replicated by well-funded rivals, and cord-cutting steadily shrinks the base of pay-TV households paying those fees in the first place.

Advertising revenue rises and falls with the broader economy and spikes in even years thanks to political advertising around elections, then fades back in odd years. Affiliate fee revenue is steadier because it is contractual, but it is on a slow structural decline as fewer households subscribe to traditional pay-TV bundles, so the two revenue streams partly offset each other's swings.

Principaux risques

• Murdoch family voting control — A dual-class share structure gives the Murdoch family and its trust control of shareholder votes well beyond their economic stake, limiting other shareholders' influence over major decisions.
• Cord-cutting — The number of households paying for traditional cable and satellite bundles keeps declining, which steadily shrinks the subscriber base that generates Fox's affiliate fee revenue.
• Rising sports rights costs — Live sports rights, a core draw for both channels, are renegotiated periodically at increasingly competitive prices, and losing a major rights package would weaken the audience that advertising and affiliate fees rely on.
• Advertising cyclicality — Advertising spending falls in economic downturns and swings between election and non-election years, adding volatility to a large share of Fox's revenue.