Fox News (“Judas”) reports earnings next week and there could be a lot to talk about. In fact, the outlook provided may be so bleak that it could actually generate a bit of news, as they are currently in the midst of a massive ratings slump.
Standard disclosure: There is NOTHING in this post about any recommendation to trade in the security. Do so at your peril.
Prior to its betrayal, FoxNews greatest asset was its reach. It was broadcast into over 80 million American homes and #1 network of all cable networks from Monday to Friday in total day viewing among Adults 25-54, according to Nielsen. Based on data from Statistica, FoxNews ratings for its news programs was 3.7 million in Q4.
According to the latest rating figures, after Biden took office, Fox News regained its No. 1 ranking in Monday-Sunday primetime total viewers, averaging an audience of 2.521 million, a drop of 33% as compared to the Q4 ratings. During the Monday-Friday primetime slot, meanwhile, Fox is just behind MSNBC with 2.940 million viewers overall. Fox is also second in the 25-54 demographic in both Monday-to-Sunday and Monday-to-Friday primetime.
However, the further downstream impact may be felt in other media properties which were associated with FoxNews brand. With an overwhelming majority of their viewers still supportive of former President Donald Trump, the question would be whether the drop in ratings also spilled over to other parts of its segment, such as its (“FoxSports”) FS1 network which broadcast sports programming such as WWE and NASCAR races.
Our view is that the entire network may be in jeopardy as Fox News had positioned itself as the voice of the Deplorables, in an age when the media networks were dominated by Fake News and mad-leftists disguised as journalists. In fact, there was no need to even go out on a limb and pretend that a straight reporting the facts WAS required to go against the collective notions held by the audience. After all, we even had pictures of ballots appearing from under tables and a simple examination of voter count tabulation would reveal updates with negative incremental counts.
Nonetheless, the media executives at Fox decided it was best to toe the CNN Pravda narrative and betrayed their viewership base in a multitude of ways.
Our focus will now shift on how this was possibly the best example of the following headline sourced from another Fake News outlet.
First some qualifications. The Fake News outlet from which the headline was sourced offers a completely different explanation as to the nature of the ‘self-inflicted wound.’ They present the view that it was because Fox News had incubated a right-wing echo chamber mindset through its programming, which made it impossible to pivot away when the “so-called” reality differed from the views espoused aka. “Biden won fair and square” , which we consider as factually accurate as the “Cow jumping over the moon“.
However, the point here is not to debate whether “Biden won fair and square” , or whether a heifer actually did clear Mons Agnes in a single leap.
It is to debate the media strategy chosen by Fox on and after its coverage of the Election 2020 and how it is the example of a company deciding to take a fully loaded revolver to its head and play Russian roulette with itself.
This is because the fundamental selling point of Foxnews was its vast reaches into Deplorable country, far away from the urban centers in the United States. Deplorable country and the urban centers can be practically divided into different nations. Any business man, with or without an MBA, will tell you, ‘You serve the market in which you rely upon.‘
Even though these 2 demographics belong to the same country, for practical purposes they are completely different entities. They do not share the same faith, the same values, the same political ideologies or in this case, media preferences. In fact, this is evident by the choice of the programming Fox Sports carries, “Deplorable friendly” programming such as WWE, NASCAR, National Hotrod Association and Premier Boxing.
By betraying them, they risk dismantling the entire premise of the Fox franchise, which was to provide an alternative media network to these deplorables who were unserved by the rabid left wing programing.
We want to further underscore the above point by looking at something most Fake News outlets do not do – the financials.
Pardon the pun, we mean the Credit ratings as part of the Ratings Ladder of Doom
As can be shown, Fox News credit ratings is currently BBB at SP and Baa2 at Moodys. This means that Fox News is just one rating notch downgrade away of falling into ‘Sub-Investment grade purgatory“.
We need to look at that in consideration of FoxNews commitments.
While FoxNews debt matures mostly after 5 years, it has tethered itself to massive capital outlays precisely for its Sports Programming rights. If they lose the Deplorable audience on Fox Sports 1 and 2 , this will massively affect their financial stability as these contracts may not be able to be renegotiated.
Sports programming rights
- Under the Company’s contracts with the National Football League (“NFL”), the remaining future minimum payments for program rights to broadcast certain football games are payable over the remaining term of the contract through the 2022 NFL season.
- The Company’s contract with Major League Baseball (“MLB”) gives the Company rights to broadcast certain regular season and post-season games, as well as exclusive rights to broadcast MLB’s World Series and All-Star Game throughthe 2028 MLB season.
- The Company’s contracts with the National Association of Stock Car Auto Racing (“NASCAR”) give the Company rights to broadcast certain races and ancillary content through calendar year 2024.
- The Company’s contract with WWE gives the Company rights to broadcast WWE Friday Night SmackDown through September 2024.
So if deplorables stop watching NFL (“Anti American sport”), MLB (“just to spite Fox”) and NASCAR (“act of mourning and self-denial”) then they can torpedo this Judas to financial oblivion as they have already signed multi-year contracts with the respective franchises.
The question would be posed whether their deplorable audience, whom they sneer at, managed to do the basic arithmetic they network’s executives probably thought them incapable of, and come to the conclusion that the hated FoxNews and Fox Sports 1 or 2 , actually belong to the same entity and should be treated in the same manner.