Fox Corporation
Analysis
Fiscal 2026 was the year FOX stopped being a cable company with streaming attached: Tubi turned profitable ahead of plan, FOX One beat its own targets, and Roku was bought to finish the job. The cost of all three arrives before the money does. How much of the World Cup's advertising falls into fiscal 2027?
- Streaming stopped being a drag and started adding profit.
Tubi was profitable every quarter and its revenue growth accelerated to 35% by Q4, with FOX One's subscriber adds and churn beating plan. Digital spending fell below $200 million, so the part of FOX that used to cost money now earns it. How much of Fox One's subscriber base pays full price instead of bundling?
- Higher prices, not more viewers, are carrying advertising.
FOX News rates rose over 45% as 400 new advertisers signed on, and management calls this its strongest ad market since the company was formed. Those spots still sell below broadcast prices, so rates can rise without losing buyers. How does Fox News' advertising pricing compare with broadcast networks'?
- The record profit year produced about half the cash.
Free cash flow halved to $1.5 billion even as revenue set a record, because World Cup rights were paid this year and that advertising arrives next year. FOX pays for programming before it gets paid, and the Roku deal adds more of the same.
- Live news and sports demandThe bull case is that FOX owns the two kinds of television advertising still growing, live news and live sports, so dollars leaving entertainment channels land on its networks.
- Streaming subscribers outside pay-TVTubi and FOX One reach cord-cutters that pay-TV never had, so the company argues new streaming revenue is additive rather than a replacement for cable fees.
- Digital spending below planDigital spending has come in well below the company's own earlier plan because Tubi and FOX One are profitable sooner, so the drag on earnings is shrinking.
- Non-recurring event advertisingThe bear case is that recent advertising records came from the World Cup and a midterm election year, so the underlying advertising base is smaller than the headline growth suggests.
- Free cash flow versus payoutsFree cash flow fell sharply as sports rights payments and capital spending rose, while buybacks and the dividend kept consuming more cash than the business generated.
- Pay-TV subscriber erosionPay-TV households keep cancelling and television distribution revenue was flat, so the cable networks have to carry distribution growth on their own.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Gilbert Ray Cisneros, Jr. Democratic · House · CA-31 | Sale | ≥$1K | Jun 16 | Jul 2 |
Gilbert Ray Cisneros, Jr. Democratic · House · CA-31 | Purchase | ≥$1K | Mar 13 | Apr 7 |
Ro Khanna Democratic · House · CA-17 | Sale | ≥$1K | Feb 24 | Mar 9 |
Ro Khanna Democratic · House · CA-17 | Sale | ≥$1K | Jan 29 | Feb 6 |
Ro Khanna Democratic · House · CA-17 | Purchase | ≥$1K | Nov 3 | Dec 8 |
Congressional trading data provided by QuiverQuant
How Fox turned $17.1B of revenue into $3.9B of operating income.
| Revenue | ||
|---|---|---|
| Television Segment | $9.7B | ▲ 3.66% YoY |
| Cable Network Programming Segment | $7.3B | ▲ 6.03% YoY |
| Total revenue | $17.1B | |
| Gross profit | $6.3B | 36.6% |
| Operating income | $3.9B | 22.7% |