FOX CORPORATION 10-K

For the fiscal year ended June 30, 2022

 

 

BUSINESS

 

 

Background

 

Fox Corporation is a news, sports and entertainment company, which manages and reports its businesses in the following segments:

segment : a part of something that is separate from the other parts or can be considered separately / one of the sections of an orange, a lemon, etc.

 

 

 

Cable Network Programming, which produces and licenses news and sports content distributed through traditional cable television systems, direct broadcast satellite operators and telecommunication companies ("traditional MVPDs"), virtual multi-channel video programming distributors ("virtual MVPDs") and other digital platforms, primarily in the U.S.

 

satellite : an electronic device that is sent into space and moves around the earth or another planet. It is used for communicating by radio, television, etc. and for gathering information. / a natural object that moves around a larger natural object in space

 

primarily : mainly

 

 

 

Television, which produces, acquires, markets and distributes programming through the FOX broadcast network, advertising supported video-on-demand ("AVOD") service TUBI, 29 full power broadcast television stations, including 11 duopolies, and other digital platforms, primarily in the U.S. Eighteen of the broadcast television stations are affiliated with the FOX Network, 10 are affiliated with MyNetworkTV and one is an independent station.

 

acquire : to gain something by your own efforts, ability or behaviour / to obtain something by buying or being given it

 

affiliated : closely connected to or controlled by a group or an organization 

 

 

 

Other, Corporate and Eliminations, which principally consists of the FOX Studio Lot, Credible Labs Inc. ("Credible"), corporate overhead costs and intracompany eliminations. The FOX Studio Lot, located in Los Angeles, California, provides television and film production services along with office space, studio operation services and includes all operations of the facility. Credible is a U.S. consumer finance marketplace.

 

principally : mainly

 

overhead : above your head; in the sky

 

 

 

Unless otherwise indicated, references in this Annual Report on Form 10-K (this "Annual Report") for the fiscal year ended June 30, 2022 ("fiscal 2022") to "FOX," the "Company," "we" or "us" mean Fox Corporation and its consolidated subsidiaries. We use the term "MVPDs" to refer collectively to traditional MVPDs and virtual MVPDs.

 

collectively : in a way that is done or shared by all members of a group of people; in a way that involves a whole group or society / in a way that refers to all members of a group

 

 

 

Business Overview

 

FOX produces and delivers compelling news, sports and entertainment content through its primary iconic brands, including FOX News Media, FOX Sports, FOX Entertainment and FOX Television Stations, and leading AVOD service TUBI. The Company, with a simple structure focused on two principal reporting segments, differentiates itself in a crowded media and entertainment marketplace through the leadership positions of the Company's brands and premium programming that focus on live and "appointment-based" content, a significant presence in major markets, and broad distribution of the Company's content across traditional and digital platforms.

 

compelling : that makes you pay attention to it because it is so interesting and exciting / so strong that you cannot resist it

 

differentiate : to recognize or show that two things are not the same / to be the particular thing that shows that things or people are not the same

 

presence : the fact of being in a particular place /  the fact of being in a particular place or thing

 

 

 

Our Competitive Strengths

 

Premium brands that resonate deeply with viewers.

 

resonate : to make a deep, clear sound that continues for a long time / to be filled with sound; to make a sound continue longer / to remind somebody of something; to be similar to what somebody thinks or believes

 

Under the FOX banner, we produce and distribute content through some of the world's leading and most valued brands. Our long track record of challenging the status quo emboldens us to continue making innovative decisions, disrupting competitors and forming deeper relationships with audiences.

 

embolden : to make somebody feel braver or more confident / to make a piece of text appear in bold print

 

disrupt : disrupt something to make it difficult for something to continue in the normal way / disrupt something (business) to cause significant change in an industry or market by means of innovation (= new ideas or methods)

 

 

 

FOX News Media is among the most influential and recognized news brands in the world. FOX Sports has earned a reputation for bold sports programming and, with its far-reaching presence in virtually every U.S.

household, is a leading destination for live sports events and sports commentary.

 

 

 

FOX Entertainment is renowned for its engaging primetime entertainment, including dramas 9-1-1, 9-1-1: Lone Star and new arrival The Cleaning Lady, its longstanding Sunday animation block featuring The Simpsons, Family Guy and Bob's Burgers and unscripted programming such as The Masked Singer and programming starring Gordon Ramsay, including Hell's Kitchen, MasterChef and Next Level Chef. 

 

renowned : famous and respected

 

long-standing : that has existed or lasted for a long time 

 

unscripted : (of a speech, broadcast, etc.) not written or prepared in detail in advance

 

 

 

These brands and others in our portfolio, including our owned and operated local television stations broadcasting under the FOX brand, hold cultural significance with consumers and commercial importance for distributors and advertisers. TUBI, a leading AVOD service, attracts a young, diverse and loyal audience to its over 45,000 programming titles. The quality of our programming and the strength of our brands maximize the value of our content through a combination of affiliate fees and advertising sales.

 

maximize : maximize something to increase something as much as possible / maximize something to make the best use of something

 

affiliate : to link a group, a company or an organization very closely with another, larger one / affiliate (yourself) (with somebody/something) to join, to be connected with, or to work for an organization

 

 

 

Leadership positions across strategically significant programming platforms.

 

FOX enjoys a leadership position across our core news, sports and entertainment businesses. As linear television viewership declines across the industry, "appointment-based" programming that is the FOX hallmark remains resilient.

 

linear : of or in lines / going from one thing to another in a single series of stages / of length

 

 

 

For over 20 consecutive years, FOX News has been the top-rated national cable news channel in both Monday to Friday primetime and total day viewing, according to The Nielsen Company ("Nielsen"). FOX News also finished calendar year 2021 as the #1 cable network in Monday to Friday primetime and total day viewing among total viewers for the sixth consecutive year.

 

consecutive : following one after another in a continuous series

 

 

A leader in marquee live sports broadcasts, FOX Sports programs the National Football League ("NFL"), Major League Baseball's ("MLB") Regular Season, All-Star Game and World Series and other marquee events, including the Fédération Internationale de Football Association ("FIFA") Men's and Women's World Cup and the Super Bowl. FOX Sports programming includes the #1 show on television, America's Game of the Week.

 

marquee : a large tent used at social events / a covered entrance to a theatre, hotel, etc., often with a sign on or above it

 

 

 

FOX Entertainment has delivered the youngest and most diverse audience of the broadcast networks across all programming in primetime for the past two decades. During the 2021-2022 broadcast season, FOX featured leading unscripted hit The Masked Singer, leading scripted Monday dramas 9-1-1 and 9-1-1: Lone Star and four of the top 10 comedies on broadcast television with The Simpsons, Family Guy, Bob's Burgers and Call Me Kat.

 

unscripted : not written or prepared in detail in advance

 

 

 

The FOX Television Stations cover 18 Nielsen-designated market areas ("DMAs"), including 14 of the 15 largest, and was the #1 or #2 rated news provider in the hours of 5 a.m. - 9 a.m. in the majority of the markets in which it operates.

 

 

 

FOX has helped TUBI become one of the most relevant and fastest growing AVOD services in the country in fiscal 2022, with nearly 40% growth in total view time (the total number of hours watched) compared to the prior fiscal year. Taken together, we believe our leadership positions will continue to support strong affiliate fee revenue growth and sustained advertising revenue, while enabling us to nimbly respond to the challenges traditional media companies are facing relating to rapidly evolving technologies and changes in consumer behavior.

 

relevant : closely connected with the subject you are discussing or the situation you are in / the fact of being valuable and useful to people in their lives and work

revenue : the money that a government receives from taxes or that an organization, etc. receives from its business

 

sustained : continuing for a period of time without becoming less

 

nimbly : with quick and easy movements / in a way that shows you are able to think and understand quickly

 

 

 

Significant presence and relevance in major domestic markets.

 

domestic : of or inside a particular country; not foreign or international / used in the home; connected with the home or family

 

 

 

The FOX portfolio combines the range of national cable and broadcast networks with the power of tailored local television. FOX News and FOX Business are available in over 70 million U.S. households and the FOX Network is available in essentially all U.S. households. Additionally, our 29 owned and operated television stations cover 18 DMAs, including 14 of the 15 largest, and maintain duopolies in 11 DMAs, including New York, Los Angeles and Chicago, the three largest.

 

tailored : made to fit well or closely / made for a particular person or purpose

 

 

 

These stations provide balanced content of national interest with programming of note to local communities, producing approximately 1,200 hours of local news coverage each week. TUBI's ubiquitous availability both online and through its app provides broad distribution of films, episodic television programming and live local and national news content.

 

 

 

TUBI carries nearly 100 local station feeds (including feeds of our owned and operated stations), covering 50 DMAs and 24 of the top 25 markets. The breadth and depth of our footprint allows us to produce and distribute our content in a cost-effective manner and share best business practices and models across regions. It also enables us to engage audiences, develop deeper consumer relationships and create more compelling product offerings.

 

 

 

Attractive financial profile, including multiple revenue streams, strong balance sheet and tax asset benefit.

 

We have achieved strong revenue growth and profitability in a complex industry environment over the past several years, led by affiliate fee increases.

 

 

 

Additionally, our strong balance sheet provides us with the financial flexibility to continue to invest across our businesses, allocate resources toward investments in growth initiatives, take advantage of strategic opportunities, including potential acquisitions across the range of media categories in which we operate, and return capital to our stockholders.

 

flexibility : the ability to change to suit new conditions or situations / the ability to bend easily without breaking

 

allocate : to give something officially to somebody/something for a particular purpose 

 

 

 

We also benefit from a tax asset that resulted from the step-up in the tax basis of our assets following the Transaction, which will provide an annual cash tax benefit for many years.

 

 

 

 

(the rest omitted)