FOX Q2 2026 Earnings Call Transcript

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Provided by Quartr
February 4, 2026

Key Takeaways

  • Positive Sentiment: Advertising momentum: Fox said ad revenue grew despite tough prior-year political comps, citing record ad performance across MLB postseason, NFL and college football and strong news scatter pricing (up ~46%), with ~200 new advertisers added this half.
  • Positive Sentiment: FOX One and distribution trends: Distribution revenue rose 4% and sequential subscriber declines improved (reported ~6.3% decline excl. FOX One); FOX One — launched five months ago — has exceeded expectations, with sports driving ~2/3 of usage and news ~1/3, and management targets low- to mid-single-digit million subscribers over 3–4 years.
  • Positive Sentiment: Tubi growth and profitability: Tubi delivered its most streamed quarter, view time +27% YoY, revenue +19% QoQ, and achieved EBITDA profitability for the second consecutive quarter.
  • Negative Sentiment: Profitability and cash flow pressures: total revenue was $5.18B (+2% YoY) but adjusted EBITDA fell to $692M (from $781M) due to higher digital growth and sports programming costs, net income dropped to $229M, and free cash flow showed a seasonal deficit of $791M this quarter.
  • Positive Sentiment: Shareholder returns and balance sheet: Management resumed significant capital returns — $1.8B repurchased fiscal YTD (cumulative $8.4B, ~35% of shares) and announced a $0.28/share semiannual dividend — while ending the quarter with ~$2B cash and $6.6B debt.
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Earnings Conference Call
FOX Q2 2026
00:00 / 00:00

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Operator

As a reminder, this conference is being recorded. I'll now turn the conference over to Chief Investor Relations Officer, Ms. Gabrielle Brown. Please go ahead, Ms. Brown.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Thank you, Krista. Good morning, and welcome to our fiscal 2026 Second 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, 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 filing. 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.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

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 activities plus capital expenditures. With that, I'm pleased to turn the call over to Lachlan.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Thank you, Gabby, and thank you all for joining us this morning. As you can see from our release, the operating and financial momentum that we have delivered over the last several years has continued to build over the first half of fiscal 2026. It is the product of both a highly differentiated strategy and high-quality execution that reflect the power of our leadership brands across news, sports, streaming, and entertainment. Our favorable results were broad-based, including notable strength in advertising revenue, where despite high political advertising a year ago, we still adroitly grew total company advertising revenue. I made the comment last quarter that we were experiencing the most robust advertising market we have seen for some time. That remained true during the second quarter, and it continues to be true today, where we are seeing unabated, healthy trends and positive metrics across our portfolio.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

In sports, we achieved record-breaking ad revenue for the Major League Baseball postseason, capped off by a 7-game World Series, while we also generated records for both the National Football League and college football regular seasons. Looking forward, we've had a strong NFL postseason, and we're now gearing up for our marquee motorsports events, the Daytona 500 and Indy 500, and of course, the highly anticipated FIFA Men's World Cup, which starts in June. At news, despite comparisons to a heavy political news cycle in the prior year, we not only grew advertising revenue in the second quarter, but also achieved our highest Second Quarter advertising revenue ever. News business, further demographic expansion, and pricing growth in both direct response and national advertising all contributed to this strong result.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Distribution revenue grew 4% during the quarter, with subscriber declines notably improving sequentially, even when excluding the contribution from Fox One, which continues to exceed our expectations, driven by both direct sign-ups as well as partnerships. At this point, we have not observed any noticeable cannibalization of traditional subscribers, a result of our targeted marketing to cord-cutters and cord-nevers. Although Fox One launched just five months ago, we are encouraged by consumer reception to the product, and we've already gained meaningful insights into audience engagement trends. While live sporting events continue to drive the majority of engagement, news accounts for approximately one-third of total minutes viewed on Fox One. Notably, news viewers engage with the platform twice as many days per week as non-news viewers and watching it nearly three times as many minutes per week on average.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

These patterns reinforce our view that Fox One is not only the premier destination for live sports, but also the leading platform for timely, relevant, live news streaming. Whether streaming, linear, social, or digital, Fox News Media continues to meet our audiences where they are. Over the past 12 months, a fast-moving and consequential news cycle has reinforced Fox News Media's leadership position, with audiences turning to the network for live coverage and in-depth analysis. Fox News again finished the quarter as the most-watched cable network in total day, while maintaining its lead as the most-watched cable news network and producing the top 11 cable news programs. Again, according to recent Nielsen data, Fox News is the number one cable news network among all three political parties, which bodes well for the upcoming political election cycle.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

On the digital side, social media views for Fox News Digital were up an astounding 170% over the prior year, and both Fox News and Fox Business ranked number one in YouTube video views amongst their peers during the quarter. There is no question that Fox News Media remains front and center with today's audiences while actively engaging with the next generation of news consumers. We are focused on expanding our podcast content and talent across Fox News and the broader Fox platform, supporting our strategy to meet our audiences wherever they are. Underscoring fan engagement across the Fox brands, Fox Sports ended 2025 as the leader in live sports event viewing, a title it has held for six of the last seven years.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

From the World Series that drew over 27 million viewers for Game Seven, to a 10-year high in NFL regular season viewership, and the Big Ten Championship setting the record from any conference championship game on any network, the strength of the Fox Sports portfolio is unmatched. We capped the season with the Seattle Seahawks' NFC Championship victory over the L.A. Rams, drawing 46 million viewers and providing a powerful lead-in to Fox Entertainment's Memory of a Killer, the most-watched series premiere on any network this season, with over 11 million viewers across multiple platforms. The trend of strong engagement was further extended at Tubi.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Tubi delivered its most streamed quarter of all time and grew total view time 27% year-over-year, supported by an expanding content slate, including the NFL Thanksgiving game simulcast and the premiere of Sidelined 2: Intercepted, a Tubi original that has become a fan favorite. This engagement growth was the strongest in seven quarters and powered by on-demand viewing, which is over 95% of consumption on Tubi. Tubi's most streamed quarter translated into record quarterly revenue, which grew 19% in the quarter on an absolute basis, and this revenue growth once again translated to the bottom line, with Tubi achieving EBITDA profitability for the second quarter in a row. Meaningful audience engagement is a consistent and enduring theme across our results, highlighting Fox's unique cultural position.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Ensuring that we constantly and deeply connect with fans across our brands is at the forefront of our strategy. As an example of this strategy in action, total minutes viewed across sports, news, entertainment on Tubi increased 15% year-over-year in calendar year 2025. Amidst strong competition, Fox stands out through compelling storytelling and deliberate investment in fan-driven content that delivers unmatched real-time reach. Together, these elements reinforce Fox's position as a trusted destination for audiences today while building lasting connection with future fans. We enter the second half of our fiscal year with strong momentum and with confidence in our strategic direction. Our emphasis on live sports and news, together with the strength of Tubi and increasingly Fox One, has driven exceptional performance and reinforced our leadership position across the portfolio.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

This focus, together with our strong financial position and best-in-class balance sheet, underpin our ability to deliver sustained growth and shareholder value. And with that, I will turn the call over to Steve to take you through the details of the quarter.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

Thanks, Lachlan, and good morning, everyone. Fox delivered yet another strong quarter with our fiscal second quarter total revenues reaching $5.18 billion, a 2% increase from the prior year quarter. Distribution revenues grew a healthy 4%, reflecting the strength of our brands and must-have nature of our channels. Advertising revenues grew 1%, despite facing a difficult comparison to last year's record political cycle, driven by strong linear pricing across our portfolio, continued robust revenue growth at Tubi, and a 7-game World Series at sports. Content and other revenues were flat compared to the prior year quarter, as higher sports sub-licensing revenues were offset by lower entertainment content revenues.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

Quarterly adjusted EBITDA was $692 million, as compared to the $781 million reported in the prior year quarter, as the increase in revenues was offset by higher expenses. This included growth-driven spend at our digital-led growth initiatives and higher sports programming and production costs, partially offset by lower entertainment programming and production costs. Net income attributable to stockholders was $229 million or $0.52 per share, compared to the $373 million or $0.81 per share reported in the prior year period. Excluding non-core items, adjusted net income was $360 million, and adjusted EPS was $0.82.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

Turning to our segments, starting with Cable, which delivered revenues of $2.28 billion, an Adjusted EBITDA of $687 million, both representing growth of 5% versus the prior year quarter. Cable advertising revenues grew a robust 7%, driven by higher pricing at news and sports. Cable distribution revenues increased 5% as pricing gains from our affiliate renewals outpaced the impact from net subscriber declines, which continued to improve, both inclusive and excluding the contribution from Fox One. Cable content and other revenues grew 4%, predominantly due to higher sports sub-licensing revenues, which were offset by a corresponding level of sports rights expenses. Reported expense growth at Cable was 5%, with higher sports programming and production costs partially offset by lower news gathering costs relating to our coverage of last year's presidential election.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

Now turning to our television segment, which reported $2.94 billion in quarterly revenues. Advertising revenues at television were unchanged as continued growth at Tubi, the impact of additional MLB postseason games and pricing strength across our sports schedule were offset primarily by the absence of last year's political advertising revenues. Television distribution revenues increased 1% in the quarter, as healthy growth in fees across Fox-owned and affiliated stations more than offset the impact from industry subscriber declines. Television content and other revenues were down 19% year-over-year, primarily due to lower revenues tied to our entertainment production studios, which were impacted by the timing of deliveries. Expense growth at our television segment was held to a modest 1%, driven by higher sports programming rights and production costs, and continued investment at Tubi, partially offset by lower entertainment programming and production costs.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

All in, EBITDA at our television segment was $143 million, compared to the $205 million in the prior year quarter. Turning to free cash flow, where we recorded a deficit of $791 million this quarter. This 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, demonstrating our commitment to utilizing our full buyback authorization, fiscal year to date, we have repurchased an additional $1.8 billion through our share buyback program.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

This brings the total cumulative amount repurchased to $8.4 billion or approximately 35% of our total shares outstanding since the launch of the buyback program in 2019. This includes $1.5 billion of the accelerated share repurchase transaction we announced last quarter, for which the initial tranche of approximately 8.5 million Class A and 10.9 million Class B shares have been retired, with the remainder to be settled during the second half of this fiscal year. In addition, today, we announced a $0.28 per share semiannual dividend. With this dividend distribution, our total cumulative cash return to shareholders in the form of both dividends and share buybacks will have reached approximately $10.4 billion since the establishment of Fox Corp.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

These capital return measures are supported by the strength of our balance sheet, where we ended the quarter with approximately $2 billion in cash and $6.6 billion in debt. With that, I'll turn the call back over to Gabby.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Great. Thanks, Steve. And now, we will be happy to take questions from the investment community.

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 touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by pressing the 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 for the first question. Our first question comes from John Hodulik with UBS. Please go ahead.

John Hodulik
John Hodulik
Analyst at UBS

Great, thanks. Good morning, everyone. It looks like cable advertising is really the standout. Can we talk a little bit about that? First, on the news side, are you guys closing the gap with, in terms of CPMs with broadcasting? And how should we expect that to move forward as the comps get easier as we move into the midterm elections? That's on the news side. For sports, any color there in terms of pricing, and how should we think of how you guys look at profitability of the World Cup this year versus what you've had in the past, given it's in the US? Thanks.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Hey, good morning, John. Thank you. Good to hear your voice. First, on cable advertising, the news advertising market, I wouldn't say the news advertising market, but certainly the advertising market for Fox News has been incredibly robust. This half, we've added about 200 new advertisers. And you have to remember, that's on top of the 350 new advertisers that we added last year. So the demand for the product and the demand for the audience remains incredibly strong. That's also, you know, reflected in our scatter pricing for news, which is, you know, up sort of an embarrassing 46% or 47% year-on-year.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

We don't compare scatter pricing in news to the upfront because news doesn't have traditionally large upfront, so we compare it sort of on year-on-year pricing. So scatter pricing is very strong. Direct response pricing is strong. And we, you know, we couldn't be more pleased with the performance of advertising sales at Fox News. Moving forward into the political cycle, we expect that's only a positive for us. We expect a robust political advertising cycle. Of course, we benefit from that primarily at our local station group. But if you'll remember from the last political cycle, you know, news has started to see a growing appetite for national political advertising, and we would expect to be the primary beneficiary of that at Fox News.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Why do we expect to be the primary beneficiary? Because Fox News is not only the number one news source for Republicans and conservatives, but it's also the number one... has more Democrats-

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

... and more independents watching FOX News than watching our competitors. So we feel that we're in a very good position going forward into this political cycle. As for the, I think your second question was on the World Cup. Will it be profitable? Yes, it will. There's a tremendous excitement around the World Cup by, you know, the sponsors and other traditional advertisers. We're looking forward to a great competition and to a sort of robust advertising market on our sports platforms.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Great. Next question, please.

Operator

Your next question comes from the line of Jessica Reif Ehrlich with Bank of America Securities. Please go ahead.

Jessica Reif Ehrlich
Jessica Reif Ehrlich
Managing Director at Bank of America

Thank you. Good morning, everybody. Two questions. On the NFL, like, step up, we all know that's coming, and obviously, the positive is it will give you certainty. But, you know, we're also expecting, like, a big step up in cost. I don't know if you can address that or not, but how do you think about offsetting increased costs? Are there any new ways to monetize? Like, how are you thinking just about the NFL, like, new contract? And then separately, this is a little bit weird, but I mean, unusual for me, but we never talk about entertainment on this call, but it seems like you've been making a lot of talent deals in the last few months, and it just seems notable. So how are you thinking about the entertainment business overall?

Jessica Reif Ehrlich
Jessica Reif Ehrlich
Managing Director at Bank of America

Are there any changes that you're contemplating? Thank you.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Hey, Jessica. I hope you're well. So starting with the NFL, look, we don't want to speculate in terms of what the how the NFL will choose to move forward in terms of their option to renegotiate their rights. I would agree with you that obviously, the great benefit of that is giving us certainty as we move forward. It's obviously, you know, tremendous tremendous content for us, and they've been a really fantastic partner, and although this year's Super Bowl is not ours, you know, we we're certainly looking forward to it as we're all fans.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

So, again, without speculating, you know, we have the ability to offset a portion of any kind of cost increases because we look at our sports portfolio as a whole. So, you know, we would certainly, you know, consider, you know, balancing or rebalancing our portfolio, as we move forward, you know, when those- when those opportunities become available. So, we feel pretty comfortable about sort of the sports business, as we move forward. On entertainment, you know, we continue with our existing strategy on the entertainment network.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

You know, as you know, we balance scripted and non-scripted programming efficiently to maintain sort of an efficient and you know, sort of ultimately sort of profitable cost base in that business. But we will always sign first look deals and creative deals, you know, with the best content creators and producers and writers in the industry. You know, the proof is in the pudding because, you know, this past season with the launches of Best Medicine, with the launch of Fear Factor, with the launch of Memory of a Killer, all these launches achieved over 10 million viewers in their first week across multiple platforms.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

This is the best season launch we've had in approximately 13 years. And that's also reflected in revenue at the entertainment network, which was up in this quarter or this half for the first time in many years. So we're pleased with that strategy. It's not a signing first look deals or signing creative deals is something that we've always done and will continue to do so.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Great. Next question, please, operator.

Operator

Your next question comes from Michael Ng with Goldman Sachs. Please go ahead.

Michael Ng
Michael Ng
Analyst at Goldman Sachs

Hey, good morning. Thank you for the question. I just have two. First, Lachlan, I was just wondering if you could talk a little bit more about the performance of Fox One. You know, what's been driving the upside relative to your expectations? And as we go into the rest of the year and think about things like sports seasonality, do you expect any of the subscriber momentum to be impacted by that? And then second, for Steve, relatedly, could you just explain where Fox One sits in the P&L? You know, is it in distribution revenue? Is it in corporate and other or both, perhaps?

Michael Ng
Michael Ng
Analyst at Goldman Sachs

I think there have been some disclosure changes, so just wanted to make sure we understood how Fox One was flowing through the P&L. Thank you very much.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Thanks, Mike. All right, I'll start with the first question. So, you know, we are incredibly pleased with the performance of Fox One. It has exceeded our expectations in terms of its enthusiastic take-up by consumers. I think as I might have mentioned in my comments, but you would know, about two-thirds of the audience are sports fans and come to the platform first for sports, and about a third are news fans and regular news viewers. You know, we would maintain our expectations of having sort of low- to mid-single-digit millions of subscribers over the next three or four years.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

We're well on track to hit those benchmarks for us. And we'll see as we move forward with sports seasonality. What we're actively doing, very proactively doing, is you know, promoting the sports now that the football season is over. Promoting, you know, the tremendous sports slate that we have on Fox One on the platform, whether it's Daytona 500 or Indy 500, the start of the baseball season, and obviously moving forward into the World Cup. So it's too early to tell what sort of how significant the seasonality will be, but we're actively working to ameliorate any sort of declines that we might have.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

Hey, Mike, it's Steve. Just on how we treat Fox One through the P&L. So the best way to think about it is the platform cost, the cost of sort of running Fox One as a business, sits in our corporate segment. And so you'll seen that the corporate segment, the EBITDA negativity there has gone from $81 million to $138 million. That's predominantly sort of the Fox One cost. It then pays like, almost like a virtual MVPD, it then pays an affiliate fee to the networks for the programming, and we record that in the two segments, cable and TV.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Next question, please.

Operator

Your next question comes from Michael Morris with Guggenheim. Please go ahead.

Michael Morris
Michael Morris
Senior Managing Director and Senior Equity Research Analyst at Guggenheim

Thank you. Good morning. Want to ask one about distribution and then one about Tubi, if I could. On distribution, can you share a bit more detail on the improvement in the rate of subscriber declines that you saw? How much did that improve? What do you think the drivers are there? And I think you're in your last year of renewals under your current contract vintages, how do you see yourself positioned for the upcoming renewals? So that's the first question. And then second, on Tubi, can you share some more detail about the growth rate that you saw there on advertising during the quarter, how that's pacing for the balance of the year, and what some of the drivers there are? Thank you.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Thanks, Michael. On distribution, yeah, we're pleased to see the sub-6.5% decline in our subscriber base. That's 6.3%, but it's... I don't know why we don't say 6.3%, but it's sub-6.5%, 6.3%. And that's, you know, that's a great improvement, you know, and a consistent improvement actually over some quarters. So we're very pleased to see that. That number excludes Fox One. So if we were to include our Fox One subscribers that are paying subscribers of our content, just in the way that the cable subscribers are, that number would be better.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

But we've chosen, out of an abundance of caution, not to include the Fox One subscribers in that subscriber numbers. And nevertheless, we're very pleased with the 6.3% decline and improving. What's driving that? It's too early to say, but we would expect that the emergence of skinny bundles in the cable universe will be playing a factor and potentially an increasing factor in keeping sub declines down. It's early because a lot of the distributors are only launching now or planning to launch soon their skinny bundle packages. For us, for Fox, we like skinny bundles. We are in the skinny bundles. We are paid by the distributors for all of our channels.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

We bundle our channels when we sell them to distributors, and we give them some flexibility in how they want to take those channels and market them to their consumers. So for us, skinny bundles are a positive, and we look forward to distributors continuing to make their packages more effective, more efficient for the consumer. On Tubi, you know, Tubi has continued to grow. Obviously, TVT growth is the lead sort of indicator of what we can then translate into revenue. TVT growth at 27%, coupled with, you know, a very strong upfront for Tubi, a healthy direct response and partner trends, and also direct advertiser trends with big clients.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

All of that really drove that revenue growth of 19% in the second quarter. You have to remember that Tubi's audience is younger, it's more diverse, and it's hard to reach. 70% of Tubi's user base are cord cutters or cord nevers. This is higher than any of our competitive set and really puts us in a prime position with our advertising clients.

Steve Tomsic
Steve Tomsic
CFO at Fox Corporation

Yeah, Mike, just, just to pick up, I think you asked also about vintages in terms of renewals coming. We're pretty much done for the year. There's not much in the back end of our current fiscal year, but then we ramp in 2027 and 2028. 2027 will be more skewed towards TV, and 2028, more skewed towards cable.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Next question, please, operator.

Operator

Your next question comes from the line of Robert Fishman with MoffettNathanson. Please go ahead.

Robert Fishman
Robert Fishman
CFA at MoffettNathanson

Good morning, everyone. Can I just follow up on the skinny bundles? We've talked about this for many years and waiting for these launches. The upcoming launch with YouTube TV's Sports Pack-

Robert Fishman
Robert Fishman
CFA at MoffettNathanson

... Depending on how aggressively they price it, I'm curious if you can talk specifically about the Fox News economics, which I don't think is included in that specific package. And if there is a trade-down from other pay TV subscribers who might only want sports, are there protections in place that you were just kind of referencing to limit that downside? And then, on the sports betting side, just curious your updated thoughts on the prediction markets, whether this is a new opportunity to license or, you know, how you see this playing out, like the partnership ESPN did with DraftKings. How you think you want to approach the whole FanDuel partnership in general? Thank you so much.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Thanks, Robert. So, on skinny bundles, as I said, we are a net beneficiary of skinny bundles. The short answer to your question is yes. As we sell to our distributors our entire bouquet of channels, we are not impacted by whether they choose to offer a sports bundle or a news bundle or another type of bundle. They acquire our channels as a bundle, and then they have flexibility in terms of how they market them to their consumers. So, so we do have that downside protection when it comes to how skinny bundles are offered, as each distributor chooses to, you know, uniquely offer them to their customer base.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

I should just say that we are a fan of the bundle, right, of the core bundle. You know, we think consumers and sort of our consumers want to enjoy all of our content and enjoy all of our brands, and that's why we have number one sports brand and the number one news brand in the market. So I should note that YouTube post this football season is offering a discounted bundle for all traditional channels. So before they launch their sports pack, they're actually offering a bundle, including news, including sports and other channels, to retain their customers. So we're a big fan of the big bundle.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

You know, obviously, YouTube and others are big fans of the big bundle. But when ultimately these skinny bundles roll out, we think we're a net beneficiary of them. In terms of sports betting and prediction markets, I should preface this with saying that, you know, we, you know, we continue to be big fans of Flutter and FanDuel. Our 2.5% of Flutter is worth about $700 million. And our option, if you look at the sort of average sort of buy-side valuation of our option of 18.6% in FanDuel, remains worth about $2.1 billion.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

If you take the two of those together, $2.8 billion, that's worth about $6-$7 per share on our share price, which we don't think is reflected today. So we're big fans of sports wagering, particularly of Flutter and FanDuel, and we're watching the prediction markets growth with interest. It is an opportunity for us in terms of advertising and sort of deals with these emerging prediction markets. And I think over time, you'll see revenue flowing to us from an advertising – a significant revenue flowing to us from an advertising perspective from these clients.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Great. We'll take the last question, operator.

Operator

The last question comes from Thomas Yeh with Morgan Stanley. Please go ahead.

Thomas Yeh
Thomas Yeh
Equity Research at Morgan Stanley

Good morning. Yeah, back on the ad market, Lachlan, I think you mentioned new advertisers coming into news. Can you just help unpack which categories you're seeing particular strength in? Or are these new categories like the prediction market one that you just mentioned, or GLP-1s and consumer AI services being additive? And then on the midterms, is there a view on whether more political spend, either at the national or local level, migrates towards CTV? And how do you position to be in that particular instance to capture more of the political revenue opportunity?

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Sure. Thanks, Thomas. So on the ad market, if I just step back, one step for some perspective. If you look at the Fox, you know, portfolio of brands and businesses, about 94% of our ad- of our... Sorry, I should preface this, our national advertising sales, 94% come from sports, news, and streaming. 6% comes from entertainment. Of course, you know, what we know is the live news, live sports, and streaming are the segments where there is growth and there is a, you know, great advertiser appetite for those segments. And the vast majority of our business is in those segments.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

When I look at the category spend, and again, I'm just talking national, and I can—you didn't ask about it, but I can touch briefly on local in a minute. But if I look at advertising category across our national portfolio, this includes sports and news. You know, of the top 10 categories that we track, you know, financial, pharma, retail, packaged goods, et cetera, automotive, eight of the top 10 categories are significantly up. We've had significant demand for the eight of the top categories. Leading that is financial, which is obviously really led by the insurance companies. So great strength across all categories.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

The ones that are modestly down, entertainment, which is just, you know, movie premieres, and then sort of government and some sort of corporate political spending, which we expect to obviously increase as we get into the political cycle. You know, so what does that translate to? Well, at Fox News Media, we've had the highest ad revenue in Fox News Media's history for the first half with, as I mentioned, 200 new advertisers added. For Tubi, the highest quarterly, weekly, and daily ad revenue in Tubi history.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

On Fox Sports, in the NFL, the highest ad revenue for any Sunday package in history, the highest ad revenue for postseason and NFC Championship game in Fox Sports history, the highest full-season ad revenue on college football in Fox history, and in Major League Baseball, the highest postseason ad revenue in Fox Sports history. So tremendous strength across our portfolio. I should also mention, not to leave them out, at Fox Entertainment, we had ad revenue exceeding prior year for the first time in four years. Locally, as I mentioned, the local market is more mixed. This is really a factor of the Super Bowl and the Olympics in this quarter we're now entering.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

But we feel pretty good about the local market, although there it is mixed as historically is always true. Super Bowls and Olympic cycles absorb some of that local advertising revenue. Now, it's a great quarter for us and the momentum continues into the third quarter. But I should just say that if you look at the sustainability of this strategy, if I look back over four years or five years to 2021, if I look at our peer set, excluding Fox, total advertising, including streaming, as a group, it's obviously mixed within it, it's down about 4% CAGR in advertising revenue over those each year, over those four or five years.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

At Fox, we're up about 8%, of course, including streaming, you know, over those four or five years, 8% per year on CAGR. And I think that just shows the strength of the strategy, the sustainability of the strategy, and what... why we're so excited about Fox's future.

Gabrielle Brown
Gabrielle Brown
Head of Investor Relations at Fox Corporation

Great. Thank you so much. At this point, we're out of time, but if you have any further questions, please give me or Charlie Costanzo a call. Thanks so much for joining us.

Lachlan Murdoch
Lachlan Murdoch
Executive Chair and CEO at Fox Corporation

Thank you, everyone. Have a good day.

Operator

Ladies and gentlemen, that does conclude the Fox Corporation Second Quarter fiscal year 2026 earnings conference call. Thank you.

Executives
    • Gabrielle Brown
      Gabrielle Brown
      Head of Investor Relations
    • Lachlan Murdoch
      Lachlan Murdoch
      Executive Chair and CEO
    • Steve Tomsic
      Steve Tomsic
      CFO
Analysts
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