Fox Corp Is A Television And Media Empire On The Cheap

Core Insights - The article highlights Fox Corp (FOXA) as a strong investment opportunity due to its market leadership in cable broadcasting, particularly in live sports and news, which attract significant advertising revenue [3][8][12]. Business Segments - Fox operates two main segments: cable network programming and television, with cable network programming revenue projected to grow from $5.0 billion in fiscal 2018 to $6.9 billion in fiscal 2025, reflecting a 5% annual growth rate [4][5]. - The television segment, which includes the FOX broadcast network and Tubi, is expected to see revenue increase from $5.1 billion in fiscal 2018 to $9.3 billion in fiscal 2025, representing a 9% annual growth rate [6]. Market Position - Fox is the largest cable TV broadcaster in the U.S., with FOX News being the top-rated national cable news channel for over 20 years [9][11]. - In July 2025, FOX News averaged 2.4 million viewers in primetime, capturing 63% of the cable news share [17]. Live Sports and Events - Live sports events remain crucial for advertisers, with FOX holding rights to major events like the Super Bowl and FIFA World Cup, which attract massive viewership [12][13][14]. - The Super Bowl LVII in February 2023 had an estimated 113 million viewers, while Super Bowl LIX in February 2025 set a record with 128 million viewers [13]. Digital Distribution - Fox is expanding its digital offerings, including Tubi, which has 100 million monthly active users and a 2.2% market share of all television viewing [21]. - The recently launched FOX One service aims to attract "cordless" consumers by providing access to live events and entertainment without undercutting existing cable subscribers [22]. Financial Performance - Since fiscal 2020, Fox has achieved a 6% annual growth in revenue and a 5% growth in net operating profit after tax (NOPAT) [24]. - The company's NOPAT margin slightly decreased from 16% in 2020 to 15% in 2025, while its return on invested capital (ROIC) improved from 17% to 19% [25]. Shareholder Returns - Fox has returned $1.8 billion in dividends and repurchased $6.6 billion in shares since fiscal 2020, with a new authorization for an additional $5 billion in share repurchases [28][30]. - The combined yield from dividends and share repurchases could reach 4.7% [30]. Balance Sheet Strength - Fox reduced its total debt from $8.5 billion in fiscal 2020 to $7.6 billion in fiscal 2025, while increasing cash and equivalents from $4.6 billion to $5.4 billion [36]. - The adjusted debt net of cash fell from $3.5 billion to $1.4 billion over the same period, indicating a strong financial position [36]. Market Valuation - At a current price of $59/share, the market implies a permanent decline of 20% in NOPAT, which may be overly pessimistic given Fox's historical growth rates [41]. - If NOPAT grows at a modest rate of 1% annually, the stock could see a 39% upside to $82/share [43].