John Nallen said FOX (NASDAQ:FOX) is benefiting from a sharper strategic focus than many of its media peers, citing strength in live news, live sports and the company’s ad-supported streaming platform Tubi.
Speaking with analyst Robert Fishman, Nallen said the company is in “a really good spot” and described its current position with two words: “focus and momentum.” He pointed to ratings gains at FOX News, the upcoming World Cup and recent sports performance, improving signs in the local station advertising market, the coming election cycle and continued growth at Tubi.
Nallen also emphasized the company’s balance sheet, saying it gives FOX flexibility to pursue shareholder returns, organic investments and selective acquisitions. He said FOX has returned close to $10 billion to shareholders through buybacks and dividends since its formation, while remaining disciplined on acquisitions.
FOX Remains Selective on M&A
Nallen said FOX continues to look for an accretive acquisition of meaningful size, but said the company is not interested in pursuing “scale for scale’s sake.” He said any deal would need to align with FOX’s existing areas of expertise.
“We’re after something that’s aligned with what we’re doing, that’s kind of in a sweet spot of our knowledge base and what we do,” Nallen said. He added that Tubi remains the company’s largest acquisition to date, at less than $1 billion, and said FOX has also invested organically in businesses including Tubi, Latin America, FOX Nation, FOX Weather and other digital initiatives.
NFL Relationship and Sports Rights
Asked about reports of an early NFL renewal, Nallen said there had been no change since the company’s recent earnings call, when Lachlan Murdoch said FOX had not had substantive discussions with the league. Nallen said that if sports rights costs increase, FOX would seek to monetize them through its two major revenue streams: advertising and distribution.
He also said FOX recently secured two new national NFL windows with the media committee’s approval, calling them accretive to EBITDA on an advertising basis. Nallen said the additions demonstrate the strength of FOX’s 30-year relationship with the NFL despite media reports suggesting otherwise.
On the role of FOX One and Tubi in sports rights decisions, Nallen said they do not meaningfully change the calculation. He said FOX Sports and FS1 remain the primary homes for sports rights, while Tubi uses select sports simulcasts for brand awareness and audience acquisition. FOX One, he said, benefits from sports as both a subscriber acquisition and retention tool.
FOX News Strength, Digital Reach and Distribution
Nallen described FOX News as operating from a position of strength, calling it the No. 1 cable channel and, at times, the No. 1 channel on television. He said ratings were up high single digits in both March and April and that major news events continue to drive viewership.
He also highlighted FOX News’ digital performance, saying FOX News Media generated 2 billion YouTube views last quarter and that April was its third-largest month for YouTube views. Nallen said YouTube brings in a younger audience and works alongside FOX News Digital and the linear channel as part of a “flywheel.”
On cord-cutting, Nallen said he is more bullish than many others in the media industry. He said traditional market declines have been around 6.5% or better in recent quarters, but that the numbers are reduced when including FOX One. He said FOX One has helped offset subscriber declines and that he expects the rate of erosion in the broader pay-TV market to slow over time.
Nallen said FOX One is performing above expectations, with churn “far less” than expected. He said the service appears largely incremental, with only a “tiny piece” of its subscriber base coming from traditional cable and most subscribers previously being cordless.
Advertising Market and Election Outlook
Nallen said FOX is seeing a healthy advertising environment, despite broader uncertainty. He said scatter pricing is up, cancellations are low and advertiser sentiment is strong heading into the upfront market. He said FOX’s upfront activity is centered mainly on sports, entertainment and Tubi, while FOX News is a smaller upfront business and is more reliant on scatter and direct response advertising.
Looking ahead to the midterm elections, Nallen said political advertising could be “massive,” referencing expected spending of about $11 billion across media. He said the biggest beneficiaries for FOX would be its local stations and Tubi, particularly in states with major races such as Georgia, Florida, Pennsylvania, California and Michigan.
Nallen said FOX News is not a direct beneficiary of local political ad spending but benefits from higher viewership tied to election coverage. He also said Tubi’s political advertising opportunity should be incremental rather than cannibalizing local linear television budgets.
Tubi Growth and Betting Investments
Nallen said Tubi posted 23% revenue growth in the most recent quarter and was pacing at or above that level in April and May. He said the platform remains disciplined on pricing despite a competitive connected-TV advertising market.
He said the largest share of Tubi consumption still comes from library content from major studios, while Tubi originals help build brand awareness at a much lower cost than programming from large subscription streaming services. Nallen also said Tubi has 200 creators on the platform and expects that number to reach 400 by the end of June.
On profitability, Nallen reiterated that FOX expects Tubi to reach 20% EBITDA margins in the near term, though he said that will not happen in 2027.
Nallen also discussed FOX’s sports betting assets, noting the company has a 2.5% investment in Flutter and an 18.6% option in FanDuel that runs until 2030. He said there is no compelling reason to exercise the option today, but FOX is going through the licensing process so it can act within that window. He also confirmed a relationship with prediction markets company Kalshi, mainly through FOX News, describing it as editorial and tied to storytelling rather than a heavy advertising-style betting integration.
Nallen closed by returning to his central theme, saying FOX’s competitive position is rooted in its focus on news, sports, Tubi, local stations and entertainment. “Fair value is still to be achieved for FOX,” he said.
About FOX (NASDAQ:FOX)
Fox Corporation (NASDAQ:FOX) is a U.S.-based media company that operates television broadcast, news and sports businesses. The company traces its contemporary structure to the 2019 reorganization that followed the sale of certain entertainment assets to The Walt Disney Company; Fox Corporation retained a portfolio centered on the Fox Broadcasting Company, Fox Television Stations, Fox News Media and Fox Sports. Over time the company has expanded its digital footprint through acquisitions and direct-to-consumer services, building a mix of linear and streaming distribution.
FOX's core activities include the creation, aggregation and distribution of television programming and live sports, the operation of national cable news and business networks, and the ownership and operation of local broadcast stations.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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The article "FOX Sees ‘Focus and Momentum’ as News, Sports and Tubi Gain Ground" first appeared on MarketBeat.
