Fox Corp profit drops nearly 33% on higher expenses, ad slowdown

By Juby Babu

(Reuters) -Fox Corp reported a near 33% drop in first-quarter profit on Thursday due to a slowdown in political advertising and higher expenses stemming from the broadcast of the women's soccer World Cup as well as investments in its digital platform.

The results are the first from Fox since Rupert Murdoch stepped down as chairman, solidifying his son Lachlan's role as the leader of the media empire.

The owner of Fox News, Fox Sports and the Fox broadcast network posted quarterly net profit of $407 million, or 82 cents per share, compared with $605 million, or $1.10 per share, a year earlier.

Operating expenses rose more than 12% during the reported period on higher production costs and the renewed National Football League contract. Fox renewed the contract with the league in 2021 and is paying more than $2 billion annually for the 11-year deal, according to media reports.

The company's advertising revenue fell 2% as FOX Television Stations earned lower political ad dollars, offsetting the boost from the broadcast of FIFA Women's World Cup at its sports network and continued growth at its Tubi streaming platform.

Fox saw a 2% rise in affiliate fee revenue, driven by higher rates at stations owned as well as operated by the company and third-party FOX affiliates.

"We saw increased engagement at FOX Sports, driven by our broadcast of the FIFA Women's World Cup and the start of college football," Executive Chair and CEO Lachlan Murdoch said.

Fox posted a small overall rise in quarterly revenue to $3.21 billion, compared with analysts' average estimate of $3.18 billion, according LSEG data.

(Reporting by Juby Babu in Bengaluru;Editing by Vinay Dwivedi)