Fox Corp Class B (FOX)FOX

Fox Corp Class B: A Comprehensive Overview

Company Profile

Detailed History and Background: Fox Corp Class B (NASDAQ: FOXB) is a media and entertainment company spun off from 21st Century Fox in 2019. This company owns and operates several broadcast networks, cable channels, television stations, and streaming services, including:

• FOX Network: Flagship television network featuring live sports, entertainment programming, and news.
• Fox Television Stations: A group of 28 owned-and-operated stations in major US markets.
• Fox News Media: Includes the Fox News Channel, Fox Business Network, Fox Nation streaming service, and Fox News Digital properties.
• Tubi: A free, ad-supported streaming platform featuring movies and television shows.

Core Business Areas:

• Broadcast Television: Generates revenue primarily through advertising sales within their broadcast network and local stations.
• Cable Networks: Generates revenue through subscription fees from cable and satellite providers and advertising sales.
• Streaming: Offers subscription-based and ad-supported streaming services.
• Digital: Generates revenue through digital advertising and licensing content to other platforms.

Leadership and Corporate Structure:

• Executive Chairman and CEO: Lachlan Murdoch
• President and COO: John Nallen
• CFO: Steven Tomsic
• Board of Directors: Composed of 11 members with extensive experience in media and finance.

Top Products and Market Share

Top Products:

• FOX Network: Reaches an estimated 95 million households in the US and remains one of the top broadcast networks.
• Fox News Channel: Holds the #1 position among cable news channels in viewership and revenue.
• Tubi: Claims the #2 position among free, ad-supported streaming platforms with over 51 million monthly active users.

Market Share:

• Broadcast Network: FOX holds approximately a 7.5% primetime market share.
• Cable News: Fox News Channel has a market share of approximately 20% among cable news viewers.
• Free Streaming: Tubi holds an estimated 25% share of the free, ad-supported streaming market.

Competitive Landscape:

• Broadcast Networks: FOX competes with ABC, CBS, NBC, and the CW.
• Cable News: Fox News Channel faces competition from CNN and MSNBC.
• Free Streaming: Tubi competes with Roku Channel, Pluto TV, and IMDb TV.

Product Performance:

• FOX Network and Fox News Channel continue to attract large audiences, despite facing challenges from streaming platforms.
• Tubi has experienced significant user growth and is gaining traction as a major player in the free streaming space.

Total Addressable Market

The total addressable market for Fox Corp Class B encompasses multiple segments:

• US Television Advertising Market: Estimated to be around $70 billion.
• Global Subscription Video-on-Demand (SVOD) Market: Projected to reach $165 billion by 2028.
• Global Free, Ad-supported Streaming Television (FAST) Market: Expected to grow to $78 billion by 2027.

Financial Performance

Recent Financial Statements:

• Revenue: $5.7 billion in fiscal year 2023, representing a 6% year-over-year increase.
• Net Income: $858 million in fiscal year 2023, a significant improvement compared to a net loss in the previous year.
• Profit Margin: 13.3% in fiscal year 2023.
• EPS: $0.84 in fiscal year 2023.
• Cash Flow: Strong cash flow generation, with $660 million in free cash flow for fiscal year 2023.
• Balance Sheet: Healthy balance sheet with manageable debt levels.

Dividends and Shareholder Returns

Dividend History: Fox Corp Class B has not yet declared any dividends since its 2019 spin-off. Shareholder Returns: The stock price has appreciated by over 70% in the past year.

Growth Trajectory

Historical Growth: Strong growth in revenue and profitability over the past year, fueled by strong performance of Fox News Channel and Tubi. Future Growth Projections:

• Continued growth in the streaming sector expected to drive future revenue growth.
• Fox Corp is investing heavily in Tubi's content library and expanding its international reach.

Market Dynamics

The media and entertainment industry is experiencing significant disruption due to the rise of streaming platforms. However, Fox Corp is well-positioned with a diversified portfolio of assets to navigate these changes.

Competitors

Key Competitors:

• Broadcast Networks: ABC (DIS), CBS (PARA), NBC (CMCSA), CW (NEX), Univision (UVN)
• Cable News: CNN (WBD), MSNBC (CMCSA)
• Streaming: Netflix (NFLX), Disney+ (DIS), Hulu (DIS), HBO Max (WBD), Paramount+ (PARA)
• FAST: Roku Channel (ROKU), Pluto TV (PARA), IMDb TV (AMZN)

Competitive Advantages:

• Established brands with large audiences.
• Diversified revenue streams across broadcast, cable, and streaming.
• Strong financial position.

Disadvantages:

• Dependence on advertising revenue.
• Competition from established and emerging streaming platforms.

Potential Challenges and Opportunities

Challenges:

• Maintaining viewership and ad revenue as audiences shift to streaming.
• Competition from well-funded streaming platforms.
• Managing costs in a rapidly changing industry.

Opportunities:

• Capitalizing on the growth of the FAST market with Tubi.
• Expanding internationally with streaming services.
• Developing new revenue streams through partnerships and content licensing.

Recent Acquisitions

• Creative Mobile (2021): $215 million acquisition to expand Tubi's mobile gaming offerings and enhance the ad tech capabilities.
• Fuse Media (2023): Acquired a 5% stake in the youth-oriented media company to expand Tubi's content offerings and reach younger demographics.

These acquisitions align with Fox Corp's strategy to strengthen its streaming presence and diversify its content library.

AI-Based Fundamental Rating

Rating: 8/10

Justification:

• Strong financial performance and a diversified business model.
• Market-leading positions in several key segments, including cable news and free streaming.
• Opportunities for future growth through streaming expansion and strategic acquisitions.

Sources and Disclaimers

Sources:

• Fox Corp Investor Relations page: https://investors.foxcorp.com/
• Securities and Exchange Commission (SEC) filings: https://www.sec.gov/edgar/search/?company=fox+corporation
• Market research reports from Nielsen, eMarketer, and Statista

Disclaimer: This information is for general educational purposes only and should not be considered investment advice.