Despite rising costs, Fox boasts about the success of its sports programming.

• Fox Sports drove higher consumption for Fox Corporation, CEO Lachlan Murdoch said.
• But sports programming drove costs higher for the company, driving profit lower.
• Sports fuel high ratings but they’re costly for media companies.

Lachlan Murdoch, CEO of Fox Sports, announced during the company's quarterly earnings call that they experienced higher overall consumption in the last quarter.

During the first quarter of the fiscal year, the company reported that consumption data indicated a 2% increase in viewing of all Fox brands.

The Women's World Cup game match between the U.S. and the Netherlands on Fox was the most watched ever on U.S. English language television, with FOX Sports being a significant contributor to the consumption of the event.

As the media giant increased its sports programming, it certainly paid the price.

The Women's World Cup and the renewal of National Football League rights were major costs that drove up expenses in the company's TV segment, resulting in a 33% decrease in net income from $613 million to $415 million in the earnings report.

The Super Bowl, which was aired on Fox, attracted 113 million viewers, making it the third most-watched event of all time. However, the high cost of sports programming has intensified the competition among linear networks and streaming services for the rights to air these events.

This year, YouTube secured the NFL Sunday Ticket rights for $2 billion, surpassing the previous payment of $1.5 billion made by DirecTV.

Ad revenue and the cable bundle

Tubi, the ad-supported streaming service that Fox acquired in 2020, experienced growth and surpassed 70 million monthly active users in September, up from the previously announced 64 million in February.

Murdoch stated during the earnings call that Fox is not planning to introduce live sports on Tubi, and the streamer will continue to focus on entertainment content.

In the previous quarter, the company experienced a 2% decline in overall ad revenue compared to the same period last year, which was boosted by political ads leading up to the midterm elections.

In a Thursday note, Wolfe Research analyst Peter Supino stated that the growth of Tubi and the Women's World Cup helped mitigate the softened advertising market last quarter.

Despite the growing trend of cord-cutting, Fox News remains popular among subscribers, with Fox standing firmly by the cable bundle.

During the earnings call, Murdoch stated that the cable bundle is still our biggest and most crucial source of income. We anticipate it to remain our top earner for several years.

Analysts at Morgan Stanley are on board with the devotion to the bundle.