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Fox (FOXA) Brings Roseanne Barr Onboard for a Comedy Show

Zacks Equity Research
·4 min read

Fox Corporation FOXA recently signed Roseanne Barr for a comedy show named A Roseanne Comedy Special, which will be exclusively available on Fox Nation from early 2023.

Roseanne is a comedy icon in America. Roseanne’s extraordinary career spanning decades has won her four Emmy Awards, three Golden Globe Awards and a prestigious Peabody Award for her sitcom Roseanne that aired on ABC.

The one-hour comedy special, launching on Fox Nation, will be Roseanne’s first stand-up special in 16 years.

Nation, News & Sports Aids Fox’s Prospects

Fox Nation, which is an entertainment streaming service designed to complement the Fox News Channel ("FNC"), is further expanding its portfolio with original content like Duck Family Treasure, Sharon Osbourne: To Hell & Back (to be streamed on Sep 26) and the upcoming Yellowstone: One-Fifty with Kevin Costner.

The Fox News Channel has been benefiting from Fox Nation as it increased FNC’s subscriber base by approximately 80% in fiscal 2022. The conversion rate of trialists to paid subscribers has been high and retention rates were above industry averages.

Fox News Channel once again closed August as the best-performing news brand for 18 consecutive months as it reached more than 2.9 billion total multiplatform minutes, 1.5 billion total multiplatform views and 77 million multiplatform unique visitors, per Comscore data.

Fox Corporation Price and Consensus

Fox Corporation Price and Consensus
Fox Corporation Price and Consensus

Fox Corporation price-consensus-chart | Fox Corporation Quote

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Along with this, Fox Business is also driving its user base as it achieved 151 million multiplatform views as of last month. Fox Business surpassed CNN Business and Comcast’s CMCSA MSNBC in multiplatform views for the fifth straight month.

Fox sports division also leads the upfront market as it sold more NFL Sunday advertising in the current upfront market than it did across Sunday and Thursday combined in the prior year's market.

Moreover, Fox Sports has gained exclusive rights to broadcast certain premier MLB content, including the World Series and All-Star Game, through the 2028 MLB season. The company also ventured into sports betting through the launch of FOX Bet in 2020.

What Lies Ahead for FOXA?

Fox’s shares have declined 7.2% year to date compared with Warner Bros. Discovery WBD and Comcast, which fell by 43.9% and 32.7%, respectively, for the same period. The Zacks Consumer & Discretionary Sector declined 34.1% over the same time frame.

Warner Bros. Discovery’s CNN Group is losing subscribers and prime-time viewers primarily due to cord-cutting.

WBD shut down its CNN+ streaming news service less than a month after it went live as the company failed to acquire subscribers. Per the Verge, CNN had expected two million subscribers by the end of this year. However, it managed to gain only 150K in the first two weeks it went live.

Comcast’s MSNBC lost 19% of prime-time viewers in the first half of 2022. Per Nielsen data, their ratings have plummeted ever since The Rachel Maddow show shifted to a once-per-week format from four times per week.

However, Fox’s cable TV business faces a serious threat from OTT platforms due to cord-cutting and changing consumer preferences. This cord-cutting does not bode well for Fox as it hurts growth.

In the fourth-quarter fiscal 2022, Cable Network Programming EBITDA decreased 6.8% year over year to $628 million. EBITDA margin contracted 520 bps to 43%.

Fox also faces competition for ad dollars, which forms its main source of revenue. This is further intensified by offerings from tech giants like Meta Platform’s META Facebook, Twitter, Google, YouTube and Amazon, as they too have been fighting for ad dollars.

Meta benefits from increasing mobile ad revenues and growing adoption of stories by advertisers across Instagram.

However, Fox, which currently has a Zacks Rank #3 (Hold), remains confident about fiscal 2023 as the financial tailwinds from Super Bowl 57, the early exit of Thursday Night Football, the momentum heading into November's midterm elections and the start of its next major distribution cycle are expected to deliver record revenues and EBITDA.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


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