A 15% rise in cable network revenue – including a 10% increase in domestic ad sales – helped fuel strong overall results at 21st Century Fox in the fiscal first quarter.
Overall revenue was up 12% to $7.89 billion at the parent of Fox News Channel and FX Network in the period. Operating income at the media conglomerate grew by 10% to $1.78 billion in the period, again pumped up by its cable, filmed entertainment and satellite TV segments.
“Our strong earnings and revenue growth in the quarter were driven by continued momentum at our Cable Network Programming and Filmed Entertainment segments, reflecting sustained increases in affiliate fees as well as the global box office success of Dawn of the Planet of the Apes and The Fault in Our Stars,” said 21st Century Fox chairman and CEO Rupert Murdoch in a statement. “Additionally, we continued our focus on driving long-term value through our planned investments in a number of our growing brands, most notably our new channels FXX, Fox Sports 1 and STAR Sports.”
Cable Network revenue was up 15% to $3.2 billion and operating income before depreciation and amortization (OIBDA) increased 5% to $1.04 billion. Fox said the revenue gain was partially offset by a 21% increase in segment expenses, nearly half of which reflected the combined impact of the planned investments in new sports channels launched in the prior year, coupled with the consolidation of the Yankees Entertainment and Sports Network (the “YES Network”). The expense growth at the new sports channels mainly reflected increased rights fees for the India vs. England cricket series at STAR Sports and the broadcast of regular season Major League Baseball games at Fox Sports 1.
Increased programming and marketing costs at the FX Networks were incurred for original programming like The Strain , Tyrant and Sons of Anarchy at FX and for the exclusive cable rights to air all 552 episodes of The Simpsons at FXX.
Domestic affiliate revenue increased 18%, reflecting the combination of sustained growth at its regional sports networks, FX Networks and Fox News Channel, the contribution from Fox Sports 1, as well as the consolidation of the YES Network. International affiliate revenue increased 8% in the period.
Domestic advertising revenue at the cable segment grew 10% in the quarter over the prior year period driven by the consolidation of the YES Network and solid growth at the FX Networks and Fox News Channel. Growth at Fox News and the RSNs helped drive a 15% increase in OIBDA at the domestic channels in the period.