FOX CEO Delivers Dismal Assessment of WWE’s SmackDown Deal
November 3, 2023
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The FOX ($NASDAQ:FOXA) Corporation, one of the world’s largest media organizations, recently received a dismal assessment from their CEO, Lachlan Murdoch, in regard to their deal with World Wrestling Entertainment (WWE). Murdoch expressed his disappointment with the terms of the deal in an earnings call, saying that FOX had paid too much for the company’s popular SmackDown show. It owns and operates the FOX Broadcasting Company, FOX Sports, and several other digital media properties. It also has relationships with major sports leagues like Major League Baseball and the National Football League. Murdoch stated that the deal was ultimately too much of a financial risk for the company, citing that WWE’s television ratings had begun to decline shortly after the deal was signed.
He went on to say that he expected to receive better terms on the deal, considering WWE’s current financial situation and the fact that other networks had expressed interest in the show. Despite this, FOX remains committed to airing SmackDown and continues to promote it as one of its flagship programs. While it may not be the best financial decision, FOX has stated that it will honor the terms of the contract and continues to invest in WWE programming.
Market Price
On Thursday, FOX CORPORATION CEO Lachlan Murdoch delivered a dismal assessment of the newly acquired five-year contract with WWE’s SmackDown Live show. Murdoch stated that the deal was likely to produce little to no profit in its first year, and that it would be a drain on resources. Due to this, he also noted that the company would have to make careful decisions on how to allocate their funds. The news had a noticeable effect on FOX’s stock prices as well. Opening at $29.1, it closed at $31.0, up 1.6% from its prior closing price of 30.5.
This indicates that the market is not as concerned as the CEO and investors are with the long-term implications of the SmackDown deal. Murdoch also noted that FOX CORPORATION would look at other long-term investments in order to offset the costs of the deal. Overall, while the short-term outlook for the SmackDown contract is not promising, it appears that investors are hopeful for the company’s long-term prospects. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Fox Corporation. More…
| Total Revenues | Net Income | Net Margin |
| 14.91k | 1.24k | 8.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Fox Corporation. More…
| Operations | Investing | Financing |
| 1.8k | -438 | -2.29k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Fox Corporation. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 21.87k | 11.42k | 20.57 |
Key Ratios Snapshot
Some of the financial key ratios for Fox Corporation are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 6.6% | 3.4% | 13.1% |
| FCF Margin | ROE | ROA |
| 9.7% | 11.9% | 5.6% |
Analysis
We have conducted an analysis of FOX CORPORATION‘s fundamentals using our GoodWhale Star Chart. According to our results, FOX CORPORATION is classified as a ‘rhino’, meaning that it has achieved moderate revenue or earnings growth. In terms of attractiveness to investors, FOX CORPORATION is strong in asset and medium in dividend, growth and profitability. Furthermore, FOX CORPORATION has a high health score of 8/10 with regard to its cashflows and debt, indicating that it is capable to safely ride out any crisis without the risk of bankruptcy. Therefore, FOX CORPORATION may be an attractive investment for those willing to take on moderate risk in exchange for a steady return. It is also an ideal option for investors who prefer to pay out dividends and still hold on to their assets over a long period of time. More…
Peers
Fox Corporation is an American broadcasting company headquartered in New York City. The company was founded in 1985 and is the owner of Fox News, Fox Business Network, and Fox Sports. Fox Corporation competes with Sinclair Broadcast Group, Nexstar Media Group, and DISH Network Corporation.
– Sinclair Broadcast Group Inc ($NASDAQ:SBGI)
Sinclair Broadcast Group is one of the largest television broadcasters in the United States. The company owns or operates 193 television stations in 89 markets, reaching over 40 million households. Sinclair is dedicated to providing quality programming and broadcasting services to its viewers. The company’s return on equity is one of the highest in the industry, at 404.93%. This demonstrates Sinclair’s commitment to shareholder value and its efficient use of capital.
– Nexstar Media Group Inc ($NASDAQ:NXST)
Nexstar Media Group is one of the largest broadcasters in the United States. It owns, operates, or provides services to 171 television stations and 4,842 digital channels in 100 markets. The company also produces and distributes content through its various subsidiaries. Nexstar Media Group is headquartered in Irving, Texas.
– DISH Network Corp ($NASDAQ:DISH)
DISH Network Corporation is a holding company that offers pay-television services under the DISH brand and Sling brand in the United States. The company also provides broadband Internet, voice, and other data services to residential and commercial customers in the United States. As of December 31, 2020, DISH Network Corporation had approximately 13.3 million pay-television subscribers.
The company has a market cap of 7.39B as of 2022 and a Return on Equity of 13.13%. DISH Network Corporation is a holding company that offers pay-television services under the DISH brand and Sling brand in the United States. The company also provides broadband Internet, voice, and other data services to residential and commercial customers in the United States.
Summary
Investing in FOX Corporation is a risky proposition. Recently, FOX CEO Lachlan Murdoch gave a damning verdict on the company’s deal with WWE SmackDown, citing concerns over profitability and the lack of return on investment. This is indicative of the company’s overall attitude towards risk and potential investments.
It is recommended that investors assess their risk appetite when considering FOX Corporation, as the company’s leadership appears to be conservative with their investment decisions. It is also important to consider the volatility of the company’s stock price and potential macroeconomic conditions before investing.
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