Q3 2026 Fox Corp Earnings Call

May 11, 2026

Speaker #1: Thank you for standing by, ladies and gentlemen. Welcome to the Fox Corporation third-quarter fiscal year 2026 earnings conference call. At this time, all participants are in listen-only mode.

Operator: Thank you for standing by, ladies and gentlemen. Welcome to the Fox Corporation Q3 fiscal year 2026 earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session via the phone. I would like to emphasize that functionality for the question-and-answer queue will be given at that time. If you require assistance during the call, please press star then 0 on your touch tone keypad. As a reminder, this conference is being recorded. I will now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Speaker #1: Later, we will conduct a question-and-answer session via the phones. I would like to emphasize that functionality for the question-and-answer queue will be given at that time.

Speaker #1: If you require assistance during the call, please press star, then zero on your touch-tone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown.

Speaker #1: Please go ahead, Ms. Brown.

Speaker #2: Thank you, Operator. Good morning and welcome to our fiscal 2026 third-quarter earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer; John Nallen, President and Chief Operating Officer; and Steve Tomsic, our Chief Financial Officer.

Gabrielle Brown: Thank you, operator. Good morning, and welcome to our fiscal 2026 Q3 earnings call. Joining me on the call today are Lachlan Murdoch, Executive Chair and Chief Executive Officer, John Nallen, President and Chief Operating Officer, and Steve Tomsic, our Chief Financial Officer. First, Lachlan and Steve will give some prepared remarks on the most recent quarter, and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results. These statements are based on management's current expectations, and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings. Additionally, this call will include certain non-GAAP financial measures, including adjusted EPS and adjusted EBITDA, or EBITDA as we refer to it on this call.

Speaker #2: First, Lachlan and Steve will give some prepared remarks on the most recent quarter and then we'll take questions from the investment community. Please note that this call may include forward-looking statements regarding Fox Corporation's financial performance and operating results.

Speaker #2: These statements are based on management's current expectations and actual results could differ from what is stated as a result of certain factors identified on today's call and in the company's SEC filings.

Speaker #2: Additionally, this call will include certain non-GAAP financial measures. Including adjusted EPS and adjusted EBITDA, or EBITDA as we refer to it on this call.

Speaker #2: Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the investor relations section of our website.

Gabrielle Brown: Reconciliations of non-GAAP financial measures are included in our earnings release and our SEC filings, which are available in the investor relations section of our website. We also refer to free cash flow, which we define as net cash provided by operating activity, less capital expenditures. With that, I'm pleased to turn the call over to Lachlan.

Speaker #2: We also refer to free cash flows, which we define as net cash provided by operating activities, less capital expenditures. And with that, I'm pleased to turn the call over to Lachlan.

Lachlan Murdoch: Thank you, Gabby, and thank you all for joining us this morning. It's a busy day for us here at Fox. This morning we reported our fiscal Q3 results, and later today we will host our annual upfront presentation, where our advertising partners will experience firsthand the power of our programming and the platform we provide for them across our family of Fox Corporation brands. As you will hear today, all signs point to a healthy upfront for Fox. From global news and live sports to high-quality free entertainment and essential local news coverage, Fox turns audience engagement and passion into performance for our advertising and distribution partners alike. This performance was demonstrated again in our fiscal Q3, where our financial results continued to reflect the unabated momentum across the business.

Speaker #3: Thank you, Gabby, and thank you all for joining us this morning. It's a busy day for us here at Fox. This morning we reported our fiscal third-quarter results, and later today we will host our annual upfront presentation, where our advertising partners will experience firsthand the power of our programming and the platform we provide for them across our family of Fox Corporation brands.

Speaker #3: And as you will hear today, all signs point to a healthy upfront for Fox. From global news and live sports, the high-quality free entertainment and essential local news coverage Fox turns audience engagement and passion into performance for our advertising and distribution partners alike.

Speaker #3: This performance was demonstrated again in our fiscal third quarter where our financial results continue to reflect the unabated momentum across the business. We reported $4 billion of revenue and EBITDA growth of 11% to just over $950 million.

Lachlan Murdoch: We reported $4 billion of revenue and EBITDA growth of 11% to just over $950 million, reflecting strong core top-line delivery from ongoing advertising trends and distribution revenue growth. Distribution revenue grew 3% during the quarter, benefiting from the continued early success of Fox One, where both new subscriber additions, which we are confident are additive to the ecosystem, and subscriber retention outperformed our expectations. Advertising revenue, as expected, declined due to the absence of last year's Super Bowl broadcast. However, excluding the Super Bowl impact, advertising revenue would have grown double digits, driven by strength across the company, and that momentum continues into our fiscal Q4. The strength of these trends is most evident at Fox News, which achieved its highest Q3 advertising revenue ever.

Speaker #3: Reflecting strong core top-line delivery from ongoing advertising trends and distribution revenue growth. Distribution revenue grew 3% during the quarter, benefiting from the continued early success of Fox One where both new subscriber additions which we are confident are additive to the ecosystem and subscriber retention outperformed our expectations.

Speaker #3: Advertising revenue, as expected, declined due to the absence of last year's Super Bowl broadcast. However, excluding the Super Bowl impact, advertising revenue would have grown double digits driven by strength across the company and that momentum continues into our fiscal fourth quarter.

Speaker #3: The strength of these trends is most evident at Fox News which achieved its highest third-quarter advertising revenue ever. In rapidly changing and consequential news cycles, audiences turn to Fox News for compelling, accurate, and timely reporting.

Lachlan Murdoch: In rapidly changing and consequential news cycles, audiences turn to Fox News for compelling, accurate, and timely reporting. This is easily and clearly reflected to the Fox News channel, finishing the quarter as the most-watched cable network in both total day and prime. The sequential momentum is growing. For example, Fox News finished April with year-on-year total audience growth, which contributed to Fox News being the second most-watched network in Monday through Friday prime in all of television, surpassing all but one broadcast network. Fox News Digital also delivered strong results in the quarter, with both YouTube and social media views up double digits over the prior year. Fox Sports delivered major wins during a slightly less hectic time of the year for our sports calendar.

Speaker #3: This is easily and clearly reflected through the Fox News channel finishing the quarter as the most watched cable network in both total day and prime.

Speaker #3: And the sequential momentum is growing. For example, Fox News finished April with year-on-year total audience growth which contributed to Fox News being the second most watched network in Monday through Friday prime in all of television surpassing all but one broadcast network.

Speaker #3: Fox News Digital also delivered strong results in the quarter with both YouTube and social media views up double digits over the prior year. Fox Sports delivered major wins during a slightly less hectic time of the year for our sports calendar.

Speaker #3: The World Baseball Classic across Fox was a resounding success, with average ratings across the series up over 150% versus the 2023 tournament, and more than 10 million viewers tuned in for the final.

Lachlan Murdoch: The World Baseball Classic across Fox was a resounding success, with average ratings across the series up over 150% versus the 2023 tournament, and more than 10 million viewers tuned in for the final. That trend continued as Major League Baseball's opening weekend on Fox scored ratings 45% over last year. IndyCar raced to its best start in years, growing ratings 37% as of quarter end. Earlier in the quarter, we concluded a strong NFL season, highlighted by over 170 million viewers tuning in to regular season NFL games on Fox during the 2025-2026 season. Culminating with the NFC Championship game, which averaged more than 46 million viewers. Not bad. The NFL has been a key partner with Fox for more than 30 years in what is a mutually beneficial relationship.

Speaker #3: That trend continued as Major League Baseball's opening weekend on Fox scored ratings 45% over last year. And IndyCar raced to its best start in years growing ratings 37% as of quarter-end.

Speaker #3: Earlier in the quarter, we concluded a strong NFL season highlighted by over 170 million viewers tuning in to regular season NFL games on Fox during the 2025-26 season.

Speaker #3: Culminating with the NFC Championship game which averaged more than 46 million viewers. Not bad. The NFL has been a key partner with Fox for more than 30 years in what is a mutually beneficial relationship.

Speaker #3: To underscore this relationship with the NFL, yesterday Fox acquired rights to two additional NFL games in national windows for this coming season. And looking ahead, Fox will shortly be home to the world's biggest sporting event of the year.

Lachlan Murdoch: To underscore this relationship with the NFL, yesterday, Fox acquired rights to 2 additional NFL games in national windows for this coming season. Looking ahead, Fox will shortly be home to the world's biggest sporting event of the year, the FIFA Men's World Cup. We are proud to bring the first World Cup to the US in over 30 years to our audience this summer. This year's tournament, with an expanded schedule encompassing 104 matches over 5 weeks, will see Fox deliver the most matches ever on US broadcast television. Tubi will also be part of our coverage as it solo casts the opening matches, including the first USA match, and will be home to a FIFA World Cup hub, where Tubi's nearly 100 million monthly active users can engage with a broad assortment of soccer content.

Speaker #3: The FIFA Men's World Cup. We are proud to bring the first World Cup to the United States in over 30 years to our audience this summer.

Speaker #3: This year's tournament with an expanded schedule encompassing 104 matches over five weeks will see Fox deliver the most, most matches ever on US broadcast television.

Speaker #3: Tubi will also be part of our coverage as a simulcast for the opening matches, including the first USA match, and will be home to a FIFA World Cup hub.

Speaker #3: Where TUVI's nearly 100 million monthly active users can engage with a broad assortment of soccer content. This added exposure from the World Cup builds on TUVI's strong third quarter where revenue grew a healthy 23%.

Lachlan Murdoch: This added exposure from the World Cup builds on Tubi's strong Q3, where revenue grew a healthy 23%. Engagement was also solid with a 19% increase in total view time, maintaining strong momentum from library content, Tubi originals, and creator-led titles. Tubi now features more than 220 creators with over 17,000 episodes, with plans to further expand its creator universe as this content attracts younger audiences and drives higher retention. Just like we have seen at the start of each sporting season, we also expect the World Cup on Fox to be a positive for Fox One. Trends across Fox One continue to be encouraging, with strong consumption across both our news and sports offerings. Finally, from an entertainment perspective, our refreshed mid-season slate introduced several great new shows led by Fear Factor, Memory of a Killer, and Best Medicine.

Speaker #3: Engagement was also solid with a 19% increase in total view time maintaining strong momentum from library content to the originals and creator-led titles. TUVI now features more than 220 creators with over 17,000 episodes with plans to further expand its creator universe as this content attracts younger audiences and drives higher retention.

Speaker #3: Just like we have seen at the start of each sporting season, we also expect the World Cup on Fox to be a positive for Fox One.

Speaker #3: Friends across Fox One continue to be encouraging with strong consumption across both our news and sports offerings. Finally, from an entertainment perspective, our refreshed mid-season slate introduced several great new shows led by Fear Factor, Memory of a Killer, and Best Medicine.

Speaker #3: These attracted robust audiences consuming live on the network and were amplified with meaningful levels of delayed digital streaming. In addition, at today's upfront, we'll be announcing the launch of several new shows for the upcoming year including Baywatch and The Interrogator.

Lachlan Murdoch: These attracted robust audiences consuming live on the network and were amplified with meaningful levels of delayed digital streaming. In addition, at today's upfront, we'll be announcing the launch of several new shows for the upcoming year, including Baywatch and The Interrogator. Fox's Q3 results once again underscore the strength of our brands and our leadership in live programming, positioning us to deliver record EBITDA this fiscal year. As we look ahead, this strength will be showcased through the upcoming Men's World Cup and the looming midterm election cycle. These events will supplement our outstanding core sports and entertainment schedules, our continued rapid growth of Tubi, and our leading national and local news coverage, where we continue to make significant investments in the work of our dedicated journalists. We have solid momentum, and our financial position is strong, supported by a robust balance sheet.

Speaker #3: Fox's third quarter results once again underscore the strength of our brands and our leadership in live programming positioning us to deliver record EBITDA this fiscal year.

Speaker #3: As we look ahead, this strength will be showcased through the upcoming Men's World Cup and the looming midterm election cycle. These events will supplement our outstanding core sports and entertainment schedules our continued rapid growth at TUVI and our leading national and local news coverage where we continue to make significant investments in the work of our dedicated journalists.

Speaker #3: We have solid momentum and our financial position is strong supported by a robust balance sheet. We remain committed to delivering value for our shareholders in a thoughtful and disciplined manner and we will continue to explore every opportunity to maximize that value over the long term.

Lachlan Murdoch: We remain committed to delivering value for our shareholders in a thoughtful and disciplined manner, and we will continue to explore every opportunity to maximize that value over the long term. With that, I will turn the call over to Steve to take you through the details of the quarter.

Speaker #3: And with that, I will turn the call over to Steve to take you through the details of the quarter.

Speaker #4: Thanks, Lachlan. And good morning, everyone. Fox delivered another strong quarter financially. Highlighted by our fiscal third quarter total company revenue of $4 billion and adjusted EBITDA growth of 11% to $954 million.

Steve Tomsic: Thanks, Lachlan. Good morning, everyone. Fox delivered another strong quarter financially, highlighted by our fiscal Q3 total company revenue of $4 billion and adjusted EBITDA growth of 11% to $954 million. A record Q3 for Fox. Distribution revenue grew 3% over the prior year, driven by 5% growth at our cable segment. As expected, advertising revenue on a headline basis was down 24% as we lapped last year's broadcast of Super Bowl LIX. As Lachlan mentioned, excluding the impact of the Super Bowl and other NFL postseason schedule changes, our total company advertising revenue would have grown double digits over the prior year quarter. Content and other revenue was up 12%, primarily due to higher sports sub-licensing revenue at our cable segment.

Speaker #4: A record third quarter for Fox. Distribution revenue grew 3% over the prior year driven by 5% growth at our cable segment. As expected, advertising revenue on a headline basis was down 24% as we lapped last year's broadcast of Super Bowl 59.

Speaker #4: As Lachlan mentioned, excluding the impact of the Super Bowl and other NFL post-season schedule changes, our total company advertising revenue would have grown double digits over the prior year quarter.

Speaker #4: Content and other revenue was up 12% primarily due to higher sports sublicensing revenue at our cable segment. Meanwhile, total expenses fell 14% mainly a result of the NFL post-season schedule differences I just mentioned.

Steve Tomsic: Meanwhile, total expenses fell 14%, mainly a result of the NFL postseason schedule differences I just mentioned. Net income attributable to Fox stockholders was $166 million, or $0.38 per share, as compared to the $346 million, or $0.75 per share, reported in the prior year period. Excluding non-core items, adjusted net income was $570 million, and adjusted EPS was $1.32, up 20% compared to the $1.10 per share recorded in the prior year. Now let's turn to our operating segments. Starting with the Cable Segment, which delivered 6% revenue growth and 1% adjusted EBITDA growth to $884 million.

Speaker #4: Net income attributable to Fox stockholders was $166 million or 38 cents per share as compared to the $346 million or 75 cents per share reported in the prior year period.

Speaker #4: Excluding non-core items, adjusted net income was $570 million and adjusted EPS was $1.32 up 20% compared to the $1.10 per share recorded in the prior year.

Speaker #4: Now let's turn to our operating segments. Starting with the cable segment which delivered 6% revenue growth and 1% adjusted EBITDA growth to $884 million.

Speaker #4: Cable distribution revenue grew 5% over the prior-year quarter, as pricing gains outpaced the impact from net subscriber declines, which remained stable at under 6.5% across our third-party distributors before taking into account the meaningful positive contribution from Fox One.

Steve Tomsic: Cable distribution revenue grew 5% over the prior year quarter as pricing gains outpaced the impact from net subscriber declines, which remained stable at under 6.5% across our third-party distributors before taking into account a meaningful positive contribution from Fox One. Cable advertising revenue was up 5% versus the prior year, driven by strength in national pricing at News and the benefit of the World Baseball Classic at Sports. Cable content and other revenue increased 24%, driven by higher sports sub-licensing revenue. Revenue growth at our Cable segment was partially offset by a 13% increase in expenses, primarily attributable to higher sports rights amortization. Turning to our Television segment, which reported $2.2 billion in quarterly revenue.

Speaker #4: Cable advertising revenue was up 5% versus the prior year, driven by strength in national pricing and news, and the benefit of the World Baseball Classic sports.

Speaker #4: Cable content and other revenue increased 24% driven by higher sports sublicensing revenue. Revenue growth at our cable segment was partially offset by a 13% increase in expenses primarily attributable to higher sports rights amortization.

Speaker #4: Turning to our television segment, which reported $2.2 billion in quarterly revenue. As anticipated, advertising revenue at our television segment declined 30%, as underlying growth led by TUVI, along with the benefit from this year's additional NFL Wild Card game, was more than offset by the absence of Super Bowl 59, which generated over $800 million in gross advertising revenue in the prior year quarter.

Steve Tomsic: As anticipated, advertising revenue at our Television segment declined 30% as underlying growth led by Tubi, along with the benefit from this year's additional NFL Wild Card game, was more than offset by the absence of Super Bowl LIX, which generated over $800 million in gross advertising revenue in the prior year quarter. Television distribution revenue was down 1%, which continues to be in line with our expectation for Television distribution revenue to be about flat for the full year before returning to growth in fiscal 2027. Television content and other revenue was up 2% year-over-year, primarily due to higher content revenue tied to our entertainment production studios. Meanwhile, expenses at the Television segment fell 24%, led by lower sports programming rights amortization and production costs due to the absence of last year's Super Bowl.

Speaker #4: Television distribution revenue was down 1% which continues to be in line with our expectation for TV distribution revenue to be about flat for the full year before returning to growth in fiscal 27.

Speaker #4: Television content and other revenue was up 2% year over year primarily due to higher content revenue tied to our entertainment production studios. Meanwhile, expenses at the television segment fell 24% led by lower sports programming rights amortization and production costs due to the absence of last year's Super Bowl.

Speaker #4: As a result, EBITDA at our television segment was $191 million, more than three times the level posted in the prior year quarter. Turning to cash flow, we generated quarterly free cash flow of $1.77 billion.

Steve Tomsic: As a result, EBITDAR at our television segment was $191 million, more than three times the level posted in the prior year quarter. Turning to cash flow, where we generated quarterly free cash flow of $1.77 billion. This strong quarterly free cash flow delivery is consistent with the seasonality of our working capital cycle, where the first half of our fiscal year reflects the concentration of payments for sports rights and buildup of advertising-related receivables, both of which reverse in the second half of our fiscal year. In terms of capital allocation, fiscal year to date, we have repurchased an additional $1.95 billion through our share buyback program.

Speaker #4: This strong quarterly free cash flow delivery is consistent with the seasonality of our working capital cycle, where the first half of our fiscal year reflects the concentration of payments for sports rights and the build-up of advertising-related receivables, both of which reverse in the second half of our fiscal year.

Speaker #4: In terms of capital allocation, fiscal year to date, we have repurchased an additional $1.95 billion through our share buyback program. This brings the total cumulative amount repurchased to over $8.5 billion or approximately $36% of our total shares outstanding since the launch of the buyback program in 2019.

Steve Tomsic: This brings the total cumulative amount repurchased to over $8.5 billion or approximately 36% of our total shares outstanding since the launch of the buyback program in 2019. This includes the $1.5 billion accelerated share repurchase transaction, which is now complete. These capital returns are supported by the strength of our balance sheet, where we ended the quarter with approximately $3.6 billion in cash and $6.6 billion in debt. With that, I'll turn the call back over to Gabby.

Speaker #4: This includes the $1.5 billion accelerated share repurchase transaction which is now complete. These capital returns are supported by the strength of our balance sheet where we ended the quarter with approximately $3.6 billion in cash and $6.6 billion in debt.

Speaker #4: And with that, I'll turn the call back over to Gabby.

Speaker #1: Great. Thanks, Steve. And now we'd be happy to take questions from the investment community.

Gabrielle Brown: Great. Thanks, Steve. Now we'd be happy to take questions from the investment community.

Speaker #5: Ladies and gentlemen, I would like to emphasize the functionality for the question-and-answer queue. If you wish to ask a question, please press star, then one on your touchtone keypad.

Operator: Ladies and gentlemen, I would like to emphasize the functionality for the question-and-answer queue. If you wish to ask a question, please press star then one on your touch tone keypad. You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by once again pressing star then one. If you are using a speakerphone, please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question. Once again, if you have a question, please press star then one at this time. One moment please for the first question. We have a question from Michael Morris of Guggenheim. Please go ahead.

Speaker #5: You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by once again pressing star, then one.

Speaker #5: And if you are using a speakerphone, please pick up the handset before pressing the numbers. It has been requested that you limit yourself to one question.

Speaker #5: Once again, if you have a question, please press star, then one at this time. One moment, please, for the first question. We have a question from Michael Morris of Guggenheim.

Speaker #5: Please go ahead.

Speaker #6: Thank you. Good morning. I'll try to keep it to one topic if I could. So first, congratulations on the agreement that you just announced with the NFL for the additional games.

Michael Morris: Thank you. Good morning. I'll try to keep it to one topic if I could. First, congratulations on the agreement that you just announced with the NFL for the additional games. Can you share any more detail on those games, when they're going to air and where they're coming from? Then more broadly on the topic, there was an article recently in the journal saying that Rupert Murdoch expressed concern to the administration about NFL games moving to streaming services. Does this new agreement mitigate that concern at all? More broadly, can you just share any update on negotiations to extend the agreement? The article did raise some concern about elevated tension between Fox and the league, so it would be great to get your perspective on that. Thank you.

Speaker #6: Can you share any more detail on those games—when they're going to air and where they're coming from? And then, more broadly on the topic, there was an article recently in The Journal saying that Rupert Murdoch expressed concern to the administration about games—NFL games—moving to streaming services.

Speaker #6: Does this new agreement mitigate that concern at all? And more broadly, can you just share any update on negotiations to extend the agreement? Just the article did raise some concern about elevated tension between Fox and the league.

Speaker #6: So it would be great to get your perspective on that. Thank you.

Speaker #3: Hey, thanks, Mike. It's Lachlan. Let me, I guess, start in the order of how you asked the question. So yeah, we're announcing this morning that we've acquired these rights to these two additional regular season games.

Lachlan Murdoch: Hey, thanks, Mike. It's Lachlan. Let me, I guess, start in order of the how you asked the question. Yeah, we were announcing this morning that we've acquired these rights, these two additional regular season games. The first will appear in week 10. They're both national games. The first will appear in week 10. That'll give us I think it's the overseas game from Munich. That'll give us a triple header that Sunday, which I think will be the first triple header on broadcast TV in history. We're very excited for that. The second game will be a Saturday game in week 15. Those are the two games we've acquired.

Speaker #3: The first will appear in week 10 to both national games. The first will appear in week 10. That'll give us, I think, it's the overseas game from Munich.

Speaker #3: That'll give us a triple header. That's Sunday, which I think will be the first triple header on broadcast TV in history. So we're very excited for that.

Speaker #3: And the second game will be Saturday game in week 15. So those are the two games we've acquired. And I think the important note to take here - and this goes to your second question - is there is no tension really with the NFL.

Lachlan Murdoch: I think the important note to take here, and this goes to your second question, is there is no tension really with the NFL. We're partners for 30 years. We're looking forward to being partners for the next 30 years. You know, as we've noted before, we have 4 years left on our current deal. We've read the speculation that the NFL would like to renegotiate and extend Our current deal or the current deals that are in the marketplace. We've had no substantive discussions with the NFL about that. It's hard apart from what we've read in the press around speculation around that, around that. I wouldn't wanna add to that speculation at all.

Speaker #3: We're partners for 30 years. We look forward to being partners for the next 30 years. And as we've noted before, we have four years left on our current deal.

Speaker #3: We've read the speculation that the NFL would like to renegotiate and extend the current our current deal or the current deals that are in the marketplace.

Speaker #3: But we've had no substantive discussions with the NFL about that, so it's hard, apart from what we've read in the press around speculation about that.

Speaker #3: I wouldn't want to add it to that speculation at all. Having said that, we'd like to sort of broaden and deepen our relationship with the NFL, but we'll only do so in a disciplined way really take some creates value long-term shareholder value for our shareholders.

Lachlan Murdoch: Having said that, you know, we'd like to sort of broaden and deepen our relationship with the NFL, but we'll only do so in a disciplined way, you know, creates value for long-term shareholder value for our shareholders. Thanks for the question, Mike.

Speaker #3: Thanks for the question, Mike.

Speaker #1: Great. Operator, next question, please.

Gabrielle Brown: Great. Operator, next question, please.

Speaker #5: We have a question from Michael Ng of Goldman Sachs. Please go ahead.

Operator 2: We have a question from Michael Ng of Goldman Sachs. Please go ahead.

Operator: We have a question from Michael Ng of Goldman Sachs. Please go ahead.

Speaker #4: Hey, good morning. Thanks for the question. I wanted to ask about cable network distribution revenue growth. The 5% growth—when I think many investors wonder if cable network distribution can grow sustainably above zero.

Michael Ng: Hey, good morning. Thanks for the question. I wanted to ask about cable network distribution revenue growth. You know, the, the 5% growth, when I think many investors, you know, wonder if, you know, cable network distribution can grow sustainably above 0. Maybe you could just talk a little bit about the Fox One contributions. You know, has the success of Fox One kind of given you confidence that cable distribution could grow mid-single digits, perhaps on a multi-year basis? Maybe anything on seasonality that you would call out? Thank you.

Speaker #4: So maybe you could just talk a little bit about the Fox One contributions? Has the success of Fox One kind of given you confidence that cable distribution could grow mid-single digits perhaps on a multi-year basis and maybe anything on seasonality that you would call out?

Speaker #4: Thank you.

Speaker #3: Thanks, Mike. So let me start, and then Steve can ask the tough part. So, no, look, we are, from a cable—and all seriousness—from a cable distribution perspective, we feel we're in the best place we've probably been for some time.

Lachlan Murdoch: Thanks, Mike. Let me start and then Steve can ask the tough part. No, we are from a cable, in all seriousness, from a cable distribution perspective, you know, we feel, you know, we're in the best place we've probably been for some time. That's based on two things. One is, you know, we're seeing a amelioration of sort of sub declines, a stabilizing of sub declines now, for, you know, a few quarters in a row below 6.5%, in subject erosion. We think that's a very positive trend. It's important to note that does not include our Fox One subscriber additions.

Speaker #3: That's based on two things. One is we're seeing an amelioration of, sort of, sub declines; a stabilizing of sub declines now for a few quarters in a row below six and a half percent in sub erosion.

Speaker #3: We think that's a very positive trend. And it's important to note that does not include our Fox One subscriber additions. We've decided to take a very conservative approach and not include a Fox One subscribers in that six and a half percent.

Lachlan Murdoch: We've decided to take a very conservative approach and not include Fox One subscribers in that 6.5%, because it's still early days for Fox One. We want to see, you know, at least, at the very least, sort of a full cycle flow through to, so we understand the any seasonality that could be in the Fox One subscriber base. Although, having said that, we're really not seeing a tremendous amount of churn within Fox One to date. We're very pleased with that. In the other side of that equation is obviously the strength of our brands. Our brands continue to be the most covered and sort of valuable in the cable universe.

Speaker #3: Because it's still early days for Fox One. We want to see, at the very least, sort of a full cycle flow through until we understand any seasonality that could be in the Fox One subscriber base.

Speaker #3: Although having said that, we're really not seeing a tremendous amount of churn within Fox One to date. So we're very pleased with that. The other side of that equation is obviously the strength of our brands.

Speaker #3: Our brands continue to be the most coveted and, sort of, valuable in the cable universe. And whether that's Fox Sports or Fox News, the brands are in a tremendous position.

Lachlan Murdoch: Whether that's Fox Sports or Fox News, the brands are in a tremendous position. While skinny bundles are helping the ecosystem, we believe that's also early days. You know, skinny bundles were really launched 12 to 18 months ago. We're watching that with interest, but all the signs, you know, are very positive about the, you know, evolving ecosystem.

Speaker #3: Fox Skinny Bundles are helping the ecosystem, we believe. That's also early days. Skinny Bundles were really launched 12 to 18 months ago. We're watching that with interest.

Speaker #3: But all the signs are very positive about the evolving ecosystem.

Speaker #5: Yeah. Thanks, Lachlan. So Mike, in terms of trajectory, I think to sort of echo Lachlan's point, I think you're going to find there's a lot more heterogeneity in the performance of cable networks going forward.

Steve Tomsic: Yeah. Thanks, Lachlan. Mike, in terms of trajectory, I think to sort of echo Lachlan's point, I think you're gonna find there's a lot more heterogeneity in the performance of cable networks going forward. In the old days, it used to just be cable and satellite, and then we had the virtual MVPDs. Now we've got Fox One as our own sort of owned and operated service and the emergence of genre bundles. We think that bodes well for our networks, which are must-haves, both from a broadcast perspective as well as our sort of mainline cable nets. We think that serves us really well.

Speaker #5: And so you've got in the old days, you used to just be cable and satellite, and then we had the virtual MVPDs. Now we've got Fox One as our own sort of owned and operated service.

Speaker #5: And the emergence of genre bundles. And so, we think that all goes well for our networks, which are must-have, both from a broadcast perspective as well as our sort of mainline cable nets.

Speaker #5: And so we think that serves us really well. As Lachlan mentioned, Fox One was a significant contributor to our sub growth or sort of the sub subscriber trend.

Steve Tomsic: As Lachlan mentioned, Fox One was a significant contributor to our sub growth or sort of the subscriber trend, and that's fed into our revenues in terms of both cable affiliate and TV. We'll sort of shy away from whether it's mid-singles, but I think we're seeing pricing growth that we enacted about a year ago coming through. This coming year, we're lighter on cable versus TV pricing, so we've got about just north of a third of our distribution income up for renewal in fiscal 2027, and that's skewed towards TV. We feel very good about where we're at in terms of both cable distribution revenue growth as well as TV distribution growth in fiscal 2027.

Speaker #5: And that's fed into our revenues in terms of both cable affiliate and TV. We'll sort of shy away from sort of whether it's mid-singles, but I think we're seeing pricing growth that we enacted about a year ago coming through.

Speaker #5: This coming year, we’re Lachlan—cable versus TV pricing. So, we’ve got just north of a third of our distribution income up for renewal in fiscal ‘27.

Speaker #5: And that's skewed towards TV. But we feel very good about where we're at in terms of both cable distribution revenue growth as well as TV distribution growth in fiscal '27.

Speaker #1: Great. Operator, next question, please.

Gabrielle Brown: Great. Operator, next question, please.

Speaker #5: We have a question from Sean Difley of Morgan Stanley. Please go ahead.

Operator 2: We have a question from Sean Diffley of Morgan Stanley. Please go ahead.

Operator: We have a question from Sean Diffley of Morgan Stanley. Please go ahead.

Speaker #6: Great. Thanks very much, Tim. So advertising trends sound very strong up double digits like Super Bowl. I was hoping you could parse out national versus local trends and any category callouts.

Sean Diffley: Great. Thanks very much, team. Advertising trends sound very strong at double digits like Super Bowl. I was hoping you could parse out national versus local trends and any category call-outs. As it relates to the World Cup, how should we think about the financial impact across the company and how you plan to harness the event across the portfolio, including Tubi and Fox One? Thanks very much.

Speaker #6: And then as it relates to the World Cup, how should we think about the financial impact across the company and how you plan to harness the event across the portfolio, including Tubi and Fox One?

Speaker #6: Thanks very much.

Speaker #3: Hey, thanks, Sean. So, you're right. Advertising trends remain strong across the entire portfolio, whether that's sports, news, entertainment, Tubi, and also strengthening trends at the local stations.

Lachlan Murdoch: Hey, thanks, Sean. You're right. Advertising trends remain, you know, strong across the entire portfolio, whether that's sports, news, entertainment, Tubi, and also strengthening trends of the local stations. We, you know, feel that going into this upfront. Obviously, we have our presentation today. We're seeing, you know, a similar market, which is a very healthy market that we saw sort of around this time last year. We think that bodes well for a, you know, a very healthy upfront. We're seeing low options being taken up, very low options. It's a strong marketplace. We're not seeing cancellations. We're seeing healthy scatter prices.

Speaker #3: We feel that, going into this upfront—and obviously, we are at a presentation today—we're seeing a similar market, which is a very healthy market that we saw sort of around this time last year.

Speaker #3: So we think that bodes well for a very healthy upfront. We're seeing low options being taken up, very low options. So it's a strong marketplace.

Speaker #3: We're not seeing cancellations, and we're seeing healthy scatter prices. So most categories are growing. I think you asked for some shout-outs to some of the categories, like pharmaceutical.

Lachlan Murdoch: Most categories are growing. I think you asked to do some shout-outs to some of the categories like pharmaceutical. We think is growing, will grow in the upfront, the tech segment and also finance. When we add to this political revenue that we'll start to see flowing, you know, towards towards the autumn, I think there were some market third parties have estimates of $11 billion being the political ad market this midterm, which would be our midterm record. You know, we'll do obviously well out of that with our stations in key battleground states, for example, like Florida and Georgia, and also benefiting from a lot of the issue money, you know, flowing into states like California.

Speaker #3: We think it is growing and will grow in the upfront. The tech segment, and also finance. When we add to this political revenue that we'll start to see flowing towards the autumn, I think there were some market third parties that have estimates of $11 billion being the political ad market this midterm.

Speaker #3: Which would be our midterm record. We'll do obviously well out of that with stations and key battleground states. For example, like Florida and Georgia and also benefiting from a lot of the issue money flowing into states like California.

Lachlan Murdoch: We're actually already seeing record political revenue for an off year. The combination of a strong underlying ad market leading in these upfronts and also, you know, the political revenue that's, you know, already beginning to flow in, gives us great confidence in the ad market, so I'm moving forward. In terms of the World Cup, Steve is raising his hands. I'll ask Steve about it because he's You know, we are very pleased with the World Cup performance. There's a great deal of anticipation and excitement around the World Cup, both from our audiences and from our advertising partners.

Speaker #3: And we're actually already seeing record political revenue for an off-year. So the combination of a strong underlying ad market leading in these upfronts, and also the political revenue that's already beginning to flow in, gives us great confidence in the ad markets moving forth.

Speaker #3: In terms of the World Cup, Steve is raising his hand. So Steve about it because we are very pleased with the World Cup performance.

Speaker #3: There's a great deal of anticipation and excitement around the World Cup, both from our audiences and from our advertising partners. We're, as I mentioned in my earlier comments, really very proud to bring the World Cup to the United States.

Lachlan Murdoch: We're, you know, as I mentioned in my earlier comments, you know, we're really, you know, very proud to bring the World Cup to the United States in this 250th year, and it's gonna be a very successful competition. It will be, it'll assist, I think, be additive to Fox One. Obviously, that amount of sort of sports content on Fox One will be added or to Fox One. The 2 games that Tubi has simulcast won't impact Tubi's revenue because that revenue will be recognized by Fox Sports.

Speaker #3: In this 250th year. And it's going to be a very successful competition. It will be it'll assist, I think, the additive to Fox One obviously, that amount of sort of sports content on Fox One will be added or to Fox One.

Speaker #3: And it'll be a great the two games, the Tubi has Solomon Cast won't impact Tubi's revenue because that revenue will be recognized by Fox Sports.

Speaker #3: But it will certainly help to the additive to Tubi's sort of brand and audience metrics.

Lachlan Murdoch: It will certainly help to be additive to Tubi's sort of brand and audience, our metrics.

Speaker #5: And Sean, just in terms of how that shakes out for us, as Lachlan said, we're going to light it up across all the assets of the company.

Steve Tomsic: Sean, just in terms of how that shakes out for us, as Lachlan said, we're gonna light it up across all the assets of the company. The way you should think about it is it's basically a 50/50 in terms of where the tournament spreads financially, so Q4 of this current fiscal year into Q1 of our next fiscal year. From a revenue/EBITDA perspective, you should be thinking more on the broadcast side from a revenue perspective, as well as being EBITDA accretive. On the cable net side, less revenue, and probably not EBITDA accretive. On an overall company basis, absolutely EBITDA accretive.

Speaker #5: The way you should think about it is, it's basically a 50/50 in terms of where the tournament spreads financially. So, Q4 of this current fiscal year into Q1 of our next fiscal year.

Speaker #5: And then from a revenue/EBITDA perspective, you should be thinking more on the broadcast side from a revenue perspective as well as being EBITDA recreative and then on the cable net side, less revenue and probably not EBITDA recreative.

Speaker #5: But on an overall company basis, absolutely EBITDA recreative.

Operator 2: Great. Next question, please. We have a question from Bryan Kraft at Deutsche Bank. Please go ahead.

Gabrielle Brown: Great. Next question, please.

Speaker #1: Great. Next question, please.

Speaker #5: We have a question from Brian Croft at Deutsche Bank. Please go ahead.

Operator: We have a question from Bryan Kraft at Deutsche Bank. Please go ahead.

Speaker #7: Hi. Good morning. I guess I had one on FOX One, if I could, and then just one on your sports betting investments. So, on FOX One, you commented a little bit on the churn.

Bryan Kraft: Hi. Good morning. I guess I have one on Fox One, if I could, and then just one on your sports betting investments. On Fox One, you commented a little bit on the churn. I was wondering if you could talk about what you've seen in terms of sign-ups related to the spring sports, Major League Baseball, NASCAR, some of the other stuff like Indy. Do you think you have any line of sight to Fox One potentially fully offsetting the traditional pay TV declines at some point? On the sports betting side, just wondering if you could provide an update on your strategy and your plans regarding those investments in FanDuel and Flutter and how you plan to leverage those longer term. Thank you.

Speaker #7: I was wondering if you could talk about what you've seen in terms of sign-ups related to the spring sports. So, Major League Baseball, NASCAR, some of the other stuff like Indy.

Speaker #7: And do you have any do you think you have any line of sight to Fox One potentially fully offsetting the traditional pay TV declines at some point?

Speaker #7: And then on the sports betting side, just wondering if you could provide an update on your strategy and your plans regarding those investments in FanDuel and Flutter, and how you plan to leverage those longer term.

Speaker #7: Thank you.

Speaker #3: All right. Thanks, Brian. Look, on FOX One—look, overall, I think, let me just say that we are very pleased with FOX One. And in almost every way, it has exceeded our expectations.

Lachlan Murdoch: Thanks, Bryan. Look, on Fox One, overall, I think, you know, let me just say that we are, you know, very pleased with Fox One and in almost every way it has exceeded our expectations. It's still early days, so we're being sort of conservative in how we view it. Having said that, you know, as we've come into the quieter summer period, of the spring period and summer period for us, we have seen, you know, very little churn, much lower churn than we had expected. This is obviously goes to the strength of the content and the platform.

Speaker #3: But it's still early days. So we're being sort we view it. Having said that, as we've come into the quieter summer period, spring period and summer period for us, we have seen very little churn, much lower churn than we had expected.

Speaker #3: And this obviously goes to the strength of the content and the platform. It's important to note that, over in the third quarter that we're reporting today, over half of the viewership on Fox One is news viewership.

Lachlan Murdoch: It's important to note that in Q3 that we're reporting today, over half of the viewership on Fox One is news viewership. That goes to really the strength of that content and the user base. We are, you know, we're very, very pleased with that. Obviously, to your question, you know, as we have sports added to Fox One, that's helped obviously with bringing in new subscribers. As for the sports betting opportunity, you know, we remain bullish on FanDuel, and we retain our 2.5% option in Flutter.

Speaker #3: And that goes to, really, the strength of that content and the user base. So, we are—we're very pleased with it. And, obviously, to your question, as we have sports added to Fox One, that's helped, obviously, with bringing in new subscribers.

Speaker #3: As for the sports betting opportunity, we remain bullish on Vandal. We retain our 2.5% option in Flutter. Sorry, our 2.5% equity stake in Flutter and our 18.6% option in Vandal.

Lachlan Murdoch: Sorry, our 2.5% equity stake in Flutter and our 18.6% option in FanDuel. We have over 4 years to exercise that option. We are going through, we've talked about before, a licensing process, so that we can exercise, but we have 4 years to do that. We are, you know, we're bullish on the FanDuel business.

Speaker #3: We have over four years to exercise that option we are going through. We talked about before licensing process so that we can exercise. But we have four years to do that.

Speaker #3: But we are bullish on the Vandal business.

Speaker #1: Operator, we have time for one more question.

Operator 2: Operator, we have time for one more question. We have a question from Steven Cahall of Wells Fargo. Please go ahead.

Gabrielle Brown: Operator, we have time for one more question.

Speaker #5: We have a question from Stephen Cahill of Wells Fargo. Please go ahead.

Operator: We have a question from Steven Cahall of Wells Fargo. Please go ahead.

Speaker #6: Thank you. So first, just on Fox News, I guess as we think about the really big reach you've built over the last few years, is there any way to think about how much you're pricing has come up structurally over that time?

Steven Cahall: Thank you. First just on Fox News, I guess as we think about the really big reach you've built over the last few years, is there any way to think about how much your pricing has come up structurally over that time? I know the midterms will be probably another nice bump, but how do we think about just the general cycle of viewership that you have on Fox News over the next 12 months? Is it sort of down and then up as you get to the midterms, or is it a little more stable in there? Just on net digital investments, you know, I think this is something, Steve, that you've talked about kind of on a total company basis before.

Speaker #6: And I know the midterms will be probably another nice bump. But how do we think about just the general cycle of viewership that you have on Fox News over the next 12 months?

Speaker #6: Is it sort of down and then up as you get to the midterms? Or is it a little more stable in there? And then just on net digital investments, I think this is something Steve, that you've talked about kind of on a total company basis before.

Speaker #6: How are you thinking about net digital investments for fiscal 26 and fiscal 27 with the balance sheet you have a ton of capacity to invest in things?

Steven Cahall: How are you thinking about net digital investments for fiscal 2026 and fiscal 2027? With the balance sheet, you have a ton of capacity to invest in things. I don't know if that's things like marketing around Fox One or Tubi, but would just love to know how you're thinking about that for the medium term. Thanks.

Speaker #6: I don't know if that's things like marketing around FOX One or Tubi, but we'd just love to know how you're thinking about that for the medium term.

Speaker #6: Thanks.

Speaker #3: Great. Thanks, mate. So on Fox News, so from a pricing perspective on Fox News, we're seeing obviously with strong ratings particularly in April now in April, but really through I think Q3 share was about 57%.

Lachlan Murdoch: Great. Thanks, Steve. On Fox News, from a pricing perspective on Fox News, we're seeing, obviously with strong ratings, particularly in April, now in April, but really through I think Q3, our share was about 57%. Ratings were down as we were comping against the presidential inauguration a year ago. We're seeing very positive year-on-year growth in April. Share and ratings are solid for us, and we're seeing the way advertisers respond to that.

Speaker #3: Ratings were down as we were comping against the presidential inauguration a year ago. But we're seeing very positive year-on-year growth in April, and so share and ratings are solid for us.

Speaker #3: And we're seeing really advertisers respond to that. I think in fiscal year 26, we added 200 new additional advertising clients premium advertising clients. And that's on top of the pre-release announced 350 new advertising clients in fiscal 25.

Lachlan Murdoch: I think in fiscal year 2026, we added 200 new additional advertising clients, premium advertising clients, and that's on top of the, you know, previously announced 350 new advertising clients in fiscal 2025. You know, over 500 new clients yearning to be on the platform. What has that done? Well, that's really driven our CPMs up. Our CPMs and national pricing for Fox News are up over 45%. That's still a long way between the CPM pricing of Fox News and the broadcast networks that we compete against. We think there's actually, you know, great upside opportunity for us as we endeavor to sort of narrow that gap between the number 1 cable network in the country, the number 2 network sort of overall.

Speaker #3: So, over 500 new clients yearning to be on the platform. And what has that done? Well, that's really driven our CPMs up. Our CPMs and national pricing for Fox News are up over 45%.

Speaker #3: That's still a long way between the CPM pricing in Fox News and the broadcast networks that we compete against. So we think there's actually a great upside opportunity for us as we endeavor to sort of narrow that gap between the number one cable network in the country and the number two network sort of overall.

Speaker #3: I think one broadcast network is slightly ahead of us. But with pricing where there's a ton of upside. On net digital investments, I'll let Steve go into the detail.

Lachlan Murdoch: I think one broadcast network is slightly ahead of us, but with pricing where there's a ton of upside. On net digital investments, I'll let Steve go into detail, but, you know, Tubi continues to grow. That's sort of between Tubi and Fox One are the core of our digital investments. We're seeing the investment in Tubi sort of moderate as it continues to sort of grow and expand. The investment in Tubi is really launch costs, marketing costs, and some tech costs, and we're seeing that ameliorate as it continues to grow.

Speaker #3: But Tubi continues to grow. That's sort of our between Tubi and Fox One, the core of our digital investments. But we're seeing the investment in Tubi sort of moderate as it continues to sort of grow and expand.

Speaker #3: The investment in Tubi is really a launch cost, marketing costs, some tech costs. And we're seeing that ameliorate as it continues to grow. And that'll be offsetting some of our broader digital investments, which are pretty modest across the company.

Lachlan Murdoch: That'll be offsetting some of our broader digital investments, which are pretty modest across the company.

Speaker #2: Yeah. Thanks, Lachlan. Hey, Steve. Just on investments, I think we've got a track record now of how thoughtful we've been on deploying capital. And so if I look at it year to date, we're pacing better on investments than where we were year to date this time last year.

Steve Tomsic: Yeah. Thanks, Lachlan. Hey, Steve. Just on investments, which I think we've got a track record now of how thoughtful we've been on deploying capital. If I look at it year-to-date, we're pacing better on investments than where we were year-to-date this time last year. It's exactly what Lachlan said. We've had better than we anticipated success both at Fox One and Tubi. Tubi was again a little bit better than break even for Q3, which is a fantastic achievement. That's 3 quarters in a row of being break even or better. Like I gave a couple of numbers out over the course of this fiscal year so far. I think we started the year saying around $350. Last year, we did sort of $290.

Speaker #2: And it's exactly what Lachlan said. We've had better than we anticipated success both at Fox One and Tubi. Tubi was again a little bit better than break-even for Q3, which is a fantastic achievement.

Speaker #2: So it's three quarters in a row of being break-even or better. So I gave a couple of numbers out over the course of this fiscal year so far.

Speaker #2: So, I think we started the year saying around 350. Last year, we did sort of 290. I'd expect the full year to be comfortably inside the 290 that we did last year.

Steve Tomsic: I'd expect the full year to be comfortably inside the $290 that we did last year. Not anticipating any surprises for fiscal 2027 in terms of in-investment envelope. As I said, we've been super thoughtful about it so far. If we see the opportunities, we won't be shy about investing in it. We're really happy with where the investments are right now.

Speaker #2: Not anticipating any surprises for fiscal 27 in terms of investment envelope. But as I said, we've been super thoughtful about it so far. So if we see the opportunities, we won't be shy about investing in it.

Speaker #2: But where we're really happy with where the investments are right now.

Gabrielle Brown: Great. At this point, we are out of time, but if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us today.

Speaker #1: we are out of time. But if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us today.

Operator: Ladies and gentlemen, that does conclude the Fox Corporation Q3 fiscal year 2026 earnings conference call. Thank you.