FOX (NASDAQ:FOX) Chief Operating Officer John Nallen said the company has seen strong momentum over the past 12 months, driven by ratings gains at Fox News, record-breaking revenue at FOX Sports, the launch of its FOX One digital distribution product, improving results from Tubi, and new entertainment programming on the broadcast network.
Speaking in a fireside chat, Nallen pointed to what he called a healthy advertising market and “constructive trends” in affiliate subscribers, while emphasizing confidence heading into the back half of fiscal 2026 and into fiscal 2027. He also highlighted Fox’s balance sheet and cash flow generation, describing capital allocation discipline as a “hallmark” since the 2019 spin.
Subscriber trends and upcoming affiliate renewals
He also said the improvement is not yet being driven by “skinny bundles,” describing that innovation as still early in its adoption. Fox expects further product innovations from distributors to become an additional tailwind over time, even as the overall subscriber base remains in decline.
On affiliate renewals, Nallen said Fox renewed about 25% of its affiliate “book” in fiscal 2026 and is “basically done” with major renewals for the June fiscal year-end, describing the process as quiet and successful. He said renewal activity increases beginning in 2027 and that the next cycle will involve “breaking new ground” on rates and packaging. He argued Fox’s focused portfolio—without a large tail of underperforming channels—supports its position in negotiations, characterizing Fox’s key channels as “must-have” in both large and skinny bundles.
Advertising market, Fox News pricing, and political cycle setup
Nallen said advertising trends across Fox remain healthy, particularly on the national side, and noted seven consecutive quarters of advertising growth. He said nine of Fox’s top 10 ad categories are growing, led by finance, pharma, and tech, with entertainment as the lone category down due to theatrical release schedules. He added that scatter pricing is up and that cancellations from upfront commitments have been “quite low.”
For Fox News, Nallen said the network has continued to gain market share amid a heavy news cycle. As an example, he cited 9 million viewers for the State of the Union, which he said represented 70% of cable news market share that night. He also said Fox News is underpriced versus broadcast by about 50% across comparable dayparts, describing that as an opportunity to close the gap over time. Nallen said Fox News has seen high single-digit increases in national ad rates and mid-single-digit increases in direct response (DR) rates, while attracting additional advertisers across both linear and digital.
Looking ahead to the 2026 midterms, Nallen said expectations are for a record-breaking political advertising market, citing estimates of $11 billion or more across all media. He said Fox expects to benefit primarily through local stations, with Tubi positioned to reach “cordless” audiences that aren’t accessible through linear TV. He said Fox News typically receives little midterm political advertising because it is a national channel, but benefits indirectly from increased viewing that lifts advertising demand.
FOX One: growth, churn, and positioning
Nallen said FOX One, launched roughly seven months earlier, is a digital platform that offers Fox’s linear channels in an interactive way and is not a traditional subscription streaming (SVOD) service. He said subscriber growth has been better than expected and that Fox has not seen evidence FOX One is cannibalizing pay-TV subscribers. Instead, he said it is attracting customers from the “cordless community.”
Nallen said Fox has avoided marketing FOX One to pay-TV subscribers, including not advertising it during NFL and college football telecasts, and said subscribers have been “digitally sourced.” He described viewing patterns as shifting seasonally: during football season, about two-thirds of viewing was sports, but after the seasons ended, viewing shifted toward news, with about two-thirds of viewing now in news. He said churn has been better than expected, but Fox is still a couple of months away from fully understanding the churn profile as renewal cycles play out. He added that investment levels in FOX One have been in line with expectations and not comparable to the “billions” spent in some streaming launches.
Nallen said the company expects the FIFA Men’s World Cup this summer to be a subscriber catalyst for FOX One, similar to lifts seen at the start of other sports seasons, and noted Fox’s ability to retain subscribers may be supported by programming that follows, including baseball and then college football.
Tubi profitability, margin goals, and digital investment levels
Nallen said Tubi reached profitability two quarters earlier and has continued to show strong performance. He cited the most recent reported quarter as including 19% revenue growth and a 27% to 28% increase in “TVT,” which he described as an engagement underpinning. He said Tubi has become an EBITDA contributor and that the year-over-year improvement was substantial because Fox had been investing heavily in Tubi a year earlier.
On Tubi’s path toward a long-term 20% to 25% margin target, Nallen said he still views that range as achievable. He said Fox continues investing in what he called the largest content library in the market and is experimenting with original content informed by its algorithm, including Gen Z female-skewing content that he said pulls down the median age of viewers. He said costs for content and marketing do not need to rise at the same rate as revenue growth because the library is already large, allowing top-line growth to outpace cost growth.
More broadly, Nallen said Fox targeted about $350 million of EBITDA investment this fiscal year into growth initiatives, led by FOX One and FOX Latin America (principally Mexico), and expects to invest less than that amount due to better-than-expected performance. He said Fox invested about $300 million of EBITDA in fiscal 2025, with roughly 90% of that tied to Tubi.
Sports rights, World Cup scale, and capital returns
Addressing market discussion around potential early NFL media rights talks, Nallen emphasized Fox’s long-standing relationship with the league and said Fox has four years remaining on its current deal before an opt-out year in 2029. He said any discussion about extending the relationship would be evaluated for shareholder impact, and argued that rights increases are typically monetized through a broader ecosystem rather than flowing solely to the league.
For the World Cup, Nallen said the upcoming event differs meaningfully from past cycles, noting it is in North America and will span Fox’s fourth fiscal quarter and first quarter (June and July). He said Fox will have 40 more matches than in prior cycles, with 70 matches on broadcast TV, and a small simulcast component on Tubi early in the tournament. He said advertiser interest is strong, including from FIFA partners already promoting the event.
On capital allocation, Nallen said Fox focuses on three areas: organic investment, capital returns, and M&A. He said the company has returned over $10 billion to shareholders through buybacks and dividends since 2019 and still has capacity under its repurchase authorization. He said Fox completed a $1.5 billion accelerated share repurchase (ASR) announced in September and is currently buying stock in the market. While Fox continues to evaluate M&A opportunities, Nallen said none have met the company’s discipline threshold to “fundamentally” extend the business. He cited the acquisition of Tubi—about a $500 million investment—as the largest recent deal, and also discussed Red Seat Ventures as a profitable platform in podcasting that Fox has been augmenting through smaller acquisitions of podcasters and related businesses.
Nallen also addressed Fox’s non-consolidated sports betting investments, saying he believes Fox does not receive full credit in its stock price for its holdings, including an 18.6% stake in FanDuel and an investment in Flutter-related entities. He said he does not view prediction markets as a threat that will “unseat” online sports betting operators, and suggested nationally licensed prediction markets could pressure states to open online sports gambling, potentially expanding the total addressable market.
About FOX (NASDAQ:FOX)
Fox Corporation (NASDAQ:FOX) is a U.S.-based media company that operates television broadcast, news and sports businesses. The company traces its contemporary structure to the 2019 reorganization that followed the sale of certain entertainment assets to The Walt Disney Company; Fox Corporation retained a portfolio centered on the Fox Broadcasting Company, Fox Television Stations, Fox News Media and Fox Sports. Over time the company has expanded its digital footprint through acquisitions and direct-to-consumer services, building a mix of linear and streaming distribution.
FOX’s core activities include the creation, aggregation and distribution of television programming and live sports, the operation of national cable news and business networks, and the ownership and operation of local broadcast stations.
