Cable a Bright Spot in 21st Century Fox Quarterly Results

NEW YORK: Quarterly revenues of $7.38 billion for 21st Century Fox show a decline of 1 percent from the prior-year period, as healthy cable network programming and television segments were more than offset by the weak performance within filmed entertainment.

Quarterly total segment operating income before depreciation and amortization (OIBDA) of $1.73 billion increased 2 percent from the $1.70 billion of adjusted OIBDA reported in the prior year.

Cable network programming quarterly segment OIBDA increased 8 percent to $1.25 billion, driven by a 9 percent revenue increase on strong affiliate revenue growth and higher advertising revenues partially offset by a 10 percent increase in expenses. The increase in expenses was primarily due to the impact from the consolidation of newly acquired National Geographic Partners businesses as well as higher planned sports programming costs led by soccer, Major League Baseball and college football rights.

Domestic affiliate revenue increased 10 percent, advertising revenue grew 3 percent and OIBDA contributions increased 7 percent over the prior year. International affiliate revenue decreased 1 percent, advertising revenue increased 15 percent and quarterly OIBDA at the international cable channels increased 8 percent.

Television generated quarterly segment OIBDA of $279 million, down from the $290 million reported in the prior-year quarter. Quarterly segment revenues were 6 percent higher than the corresponding period in the prior year due to strong retransmission consent revenue growth and a 4 percent increase in advertising revenues, primarily reflecting low double-digit advertising growth at the FOX broadcast network. The decrease in segment OIBDA was driven by higher contractual sports programming costs at the FOX broadcast network that more than offset the higher revenues.

Filmed entertainment generated quarterly segment OIBDA of $302 million, down from the $336 million reported in the same period a year ago. Quarterly segment revenues decreased to $2.36 billion, primarily due to lower worldwide home entertainment revenues reflecting tough comparisons to last year’s strong performance of X-Men: Days of Future Past and Dawn of the Planet of the Apes with this year’s home entertainment performance of Spy, the absence of revenue contributions from Shine and the adverse impact of the strengthened U.S. dollar partially offset by higher television production network revenues. The OIBDA decline over the prior year reflects lower contributions from the TV production business, due to higher deficits related to more new series delivered during the quarter and the absence of contributions from successful series that concluded in the prior year, including Sons of Anarchy. This was partially offset by higher film studio contributions driven by the worldwide theatrical performance of The Martian.

Executive Chairmen Rupert and Lachlan Murdoch said: “During the quarter, our cable business continued to drive our growth, delivering sustained increases in domestic affiliate fees and gains in advertising revenue, underscoring the power of our global brands and distinctive programming. In addition, we are encouraged by progress at the FOX Broadcast Network, which delivered significant advertising gains from both our sports and entertainment programming. At our television production business, we deliberately invested in a higher number of new original series this quarter in support of the network’s new prime-time schedule and in creating valuable long-term assets for the company. We continued with our top priority of delivering standout storytelling and are proud of our industry-leading Academy Award nominations as well as Golden Globe wins across both our film and television businesses.”