NEW YORK (CNN) Despite turbulent and expensive weeks, Fox News is not changing course.
Fox Corp. CEO Lachlan Murdoch said there will be no change in the strategy of the company’s top-rated cable news network, despite the firing of its top-rated anchor Tucker Carlson and a massive $787.5 million severance package. Dollars to Dominion Voting Systems, which caused the company to switch to a loss in the period just ended.
“There is no change in our programming strategy at Fox News,” Murdoch said in response to an analyst who asked about Carlson’s fall during Tuesday’s investor call to discuss its financial results.
Describing Fox News as “obviously successful,” Murdoch suggested Carlson’s firing was a tweak to his strategy, not a departure from it.
“As always, we are adjusting our program and lineup, and we continue to do so,” Murdoch said.
His comments came after the company reported a net loss of $50 million for the quarter just ended, compared to a profit of $290 million a year earlier.
The reason was a $719 million charge, including costs of the Dominion settlement, other legal settlements related to its intelligence division, and other legal costs, including attorneys’ fees, partially offset by equity returns from its affiliates and a change in market value were some of his investments.
The earnings statement made no mention of Dominion Voting Systems, although it does refer to charges related to Fox News Media’s court costs. During the company’s call to investors, Murdoch cited the Dominion settlement as being in the best interests of the company and its shareholders, given the Delaware court’s rulings, which he says limit his defense. He said a court case could have resulted in two to three years of appeals.
“We are proud of our Fox News team, the exceptional quality of their journalism and their responsibility for the Fox News brand,” he said. “So as we look ahead, we believe in the strength of the Fox brands and the strength of our balance sheet.”
And he again defended the company’s post-election reporting of the false conspiracy theories being leveled at Dominion, although internal communications between Fox moderators released during the discovery process showed many of them did not believe the claims made.
“We have always acted as a news organization, covering the newsworthy events of the day,” Murdoch told investors on Tuesday. “Now we were, and still are, convinced of the correctness of our position that the First Amendment protects the reporting of a news organization and the claims of a sitting President of the United States. However, the Delaware court has our defense and trial by preliminary court rulings.”
Fox has not had to apologize or admit wrongdoing as part of the settlement of Dominion’s defamation lawsuit against the company, although its statement said it “recognizes the court’s judgments finding certain allegations about Dominion to be false.”
Fox is still facing a lawsuit from another voting machine maker, Smartmatic, seeking $2.7 billion in damages. Murdoch told investors that the case is “fundamentally” different from the Dominion case and that Fox will have a better defense than the Delaware court hearing the Dominion case. He predicted the case would not come to court until 2025.
The Dominion agreement was reached on April 18, but it was released in Fox’s third fiscal quarter, which ended March 31. Aside from legal fees and other special items reported Tuesday, it was a pretty good fiscal quarter for Fox.
It reported adjusted earnings of $494 million, or 94 cents a share, up from $459 million a year earlier. That was better than the 87 cents per share forecast by analysts polled by Refinitiv. The company was helped by profits and revenue from the broadcast of this year’s Super Bowl.
The company’s revenue rose 18% to $4.1 billion, slightly ahead of analysts’ forecasts. Most of that gain was due to a 43% increase in ad revenue, helped significantly by $650 million in Super Bowl advertising. Fox did not broadcast the 2022 Super Bowl.
Fox had plenty of cash on hand to pay for the severance pay. As of March 30, about three weeks before the settlement was finalized, the company said it had $4.1 billion in cash and cash equivalents. It also announced that it repurchased $1.8 billion of its stock in the nine months ended March 31 under a $7 billion stock repurchase plan. So far, Fox has repurchased $4.4 billion worth of stock as part of its plan.
Murdoch said Fox is better positioned than many other media companies to weather the delays and lost revenue that could result from a prolonged Writers Guild of America strike. Some programs, such as late-night shows, have already gone dark due to the strike that began last week, and production of other shows has halted.
But Murdoch said the fact that Fox is generating more revenue and profits from sports and news unaffected by the strike puts it in a better position.
“Our healthy balance of scripted and unscripted content on the network puts us in an excellent position,” he said.
The success of the settlement was known to investors ahead of the report. But even with the better-than-expected results, Fox (FOX) shares were up only about 1% on the market open after the report.