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The Bottom Line Upfront 💡
Fox Corporation $FOXA ( ▼ 1.77% ) is a contrarian's dream in the media apocalypse. While everyone declares traditional TV dead, Fox doubled down on the content that actually matters: live sports, breaking news, and appointment television that loses its magic if you watch it later. Trading at $64.65 with a fair value range of $99-$211 per share, Fox offers 54-226% upside potential. The company generates $16.3 billion in revenue from three pillars: dominant cable networks (FOX News reigns supreme), broadcast television with NFL crown jewels, and the fast-growing Tubi streaming service. With 19.8% operating margins, $5.4 billion in cash, and sports rights locked through 2033, Fox has built a fortress around live content while others chase the streaming dragon. The risk? Cord-cutting could accelerate faster than Fox can adapt. The opportunity? The market may be overly pessimistic about a company that owns the content people actually want to watch live.
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Strata Layers Chart
Layer 1: The Business Model 🏛️
Think of Fox Corporation as the scrappy younger sibling who got the best toys when the family split up. When Disney bought most of Twenty-First Century Fox in 2019, Fox kept the crown jewels: FOX News, FOX Sports, the FOX broadcast network, and a bunch of local TV stations. It's like they said, "You can have the movie studios and international stuff – we'll take the parts that print money every day."
What Fox Actually Does 💼
Fox operates like a three-legged stool, but instead of legs, it has revenue streams:
1. Cable Network Programming (43% of revenue) 📡 This is where FOX News lives – you know, the channel your uncle watches religiously. They also run FOX Business, FS1, FS2, and the Big Ten Network. These channels get paid twice: once by cable companies for the right to carry them (affiliate fees), and again by advertisers who want to reach their audiences.
2. Television Broadcasting (57% of revenue) 📺 The FOX broadcast network that airs everything from NFL games to The Simpsons, plus 29 owned TV stations in major markets. They also own Tubi, the free streaming service that's basically Netflix's scrappy cousin who doesn't charge admission but shows you ads instead.
3. Other Stuff 🏢 They own the historic FOX Studio Lot in LA (which they rent to Disney – talk about awkward family dinners), plus Credible, a financial services marketplace that helps people find loans.
Key metrics:
The Production Playbook 🎬
Fox doesn't just buy content – they make it too. FOX Entertainment Studios produces shows for their own networks and sells content to streaming services like Netflix and Amazon Prime. It's like being a restaurant that also caters parties – you maximize your kitchen's potential.
They've locked up long-term sports rights that would make other networks weep:
These aren't just programming – they're moats. Try launching a sports network without NFL games. Good luck with that.
Layer 2: Category Position 🏆
The Competitive Landscape 🥊
Fox operates in three distinct arenas, and they're throwing punches in all of them:
Cable News: The Undisputed Champion 👑 FOX News has been the #1 cable news network for over 20 consecutive years. They don't just win – they dominate. In fiscal 2025, FOX News was the top-rated cable network in primetime among ALL cable networks, not just news. CNN and MSNBC are basically fighting for second place while Fox counts money.
Sports Broadcasting: The Heavyweight Division 🥊 This is where things get interesting. Fox competes with ESPN (the 800-pound gorilla), NBC Sports, CBS Sports, and increasingly, streaming platforms like Amazon Prime Video and Apple TV+. The competition is fierce because sports rights are finite and expensive. Fox's strategy? Keep the crown jewel NFL rights and be selective about everything else.
Broadcast Television: The Streaming Wars Refugee 📺 ABC, NBC, and CBS are Fox's traditional competitors, but the real threat comes from streaming services that have fundamentally changed how people consume entertainment. Fox's response? Focus on live, appointment-based programming that streaming can't replicate effectively.
Layer 3: Show Me The Money! 📈
Revenue Breakdown: The Three-Headed Monster 🐲
Fox generated $16.3 billion in fiscal 2025 ↗️ (up 17%), split across three main buckets:
Affiliate Fees: 47% ($7.7B) 💳 This is the subscription revenue of traditional TV. Cable and satellite companies pay Fox monthly fees for each subscriber who gets their channels. It's like a gym membership, but for TV channels. The beauty? These fees grow over time through rate increases, even as subscriber counts decline.
Advertising: 42% ($6.9B) 📺 The classic TV business model – sell eyeballs to advertisers. Fox's secret sauce is live programming that people actually watch in real-time, making their ad inventory more valuable than on-demand content.
Other Revenue: 11% ($1.8B) 🎯 Content licensing, production services, and digital subscriptions. Think of this as the side hustles that add up.
Layer 4: Long-Term Valuation (DCF Model) 💰
The DCF Deep Dive 🔍
Based on our discounted cash flow analysis, Fox Corporation appears significantly undervalued at current levels. Here's what the numbers tell us:
Current Stock Price: $64.65 (as of 11.05.025)
Fair Value Range: $99 - $211 per share
Conservative Scenario: $99 per share (54% upside) 📈
Key Assumptions:
Revenue growth decelerating from 8% to 3.5% over 5 years
Operating margins declining slightly from 19.5% to 17.5% (industry maturation)
Terminal growth rate of 2.5% (in line with GDP growth)
WACC of 6.69%
This scenario assumes Fox faces continued pressure from cord-cutting and streaming competition, leading to modest margin compression over time.
Optimistic Scenario: $211 per share (226% upside) 🚀
Key Assumptions:
Same revenue trajectory but improving operational efficiency
Operating margins expanding from 20.0% to 22.0% (operational leverage)
Terminal growth rate of 3.5% (premium for quality franchise)
WACC of 6.33%
This scenario assumes Fox successfully navigates the streaming transition while maintaining pricing power in live content.
Layer 5: What Do We Have to Believe? 📚
The Bull Case: Betting on Live Content 🐂
For Fox to succeed long-term, you need to believe:
Live content remains king 👑 Sports, news, and event programming will continue to command premium pricing even as viewing habits fragment. People will always want to watch the Super Bowl live, not three days later.
Tubi can scale meaningfully 📱 The free, ad-supported streaming model can capture cord-cutters and younger audiences, creating a new growth engine. With 13% viewing growth, they're on the right track.
Pricing power persists 💪 Fox's must-have content (NFL, breaking news) gives them negotiating leverage with distributors and advertisers, allowing them to offset subscriber declines with rate increases.
Digital transformation succeeds 🔄 The upcoming FOX One streaming service and other digital initiatives can create direct consumer relationships while maintaining traditional distribution partnerships.
The Bear Case: The Cord-Cutting Apocalypse 🐻
The pessimistic view requires believing:
Cord-cutting accelerates ✂️ Traditional TV subscriptions collapse faster than Fox can raise rates or transition to digital, crushing affiliate fee revenue.
Advertising shifts permanently 📱 Digital advertising continues to fragment, reducing the value of traditional TV advertising and pressuring Fox's second-largest revenue stream.
Legal and regulatory risks ⚖️ Ongoing defamation lawsuits (like the $2.7B Smartmatic case) create material financial exposure and reputational damage.
The Verdict: A Contrarian's Dream 🎯
Fox Corporation is essentially a bet against the "traditional media is dead" narrative. While that narrative has merit, it may be overblown for companies with Fox's specific assets.
The risk/reward setup looks attractive: The market is pricing in a lot of pessimism, but Fox's focus on live, appointment-based content provides more defensive characteristics than generic media companies.
Bottom line: If you believe that live sports and news will remain valuable in a fragmented media landscape, Fox offers compelling value at current prices. Just don't expect it to be a smooth ride – media stocks are not for the faint of heart.
The company's strong cash generation, shareholder-friendly capital allocation (they just authorized another $5B in buybacks), and strategic focus on their core strengths suggest management understands the challenges and is positioning for long-term success.
AI-written, human-approved
Disclaimer: This guide is for informational purposes only and does not constitute financial advice, investment recommendations, or an offer or solicitation to buy or sell any securities. The information contained in this report has been obtained from sources believed to be reliable, but StrataFinance does not guarantee its accuracy, completeness, or timeliness.