15 Biggest Media Companies in the World

13. FOX (NASDAQ: FOX)

Revenue: $11.7 B

Market Cap: $17.28 B

Assets: $20.5 B

Number of employees: 7,700

Country: United States

Fox Corp. is providing compelling news, sports, and entertainment content thru FOX News Media, FOX Sports, FOX Entertainment, and FOX Television Stations. 

In an article, Silver Ring Value Partners mentioned that:

“Fox Corporation was created following the sale of a portion of the business to Disney. What remains is the Fox News network, FOX broadcast network and major-market TV stations, as well as the national sports cable networks. Of all the assets, Fox News is by far the most important, contributing approximately 75% of normalized profitability. It is also the one that has the strongest sustainable competitive advantage. Almost half of the country perceives it as a must-have network, and it therefore enjoys very inelastic demand. I consider the business to be of Excellent quality. The management team is experienced and has a good track record of value creation. They have recently shown restraint in not bidding to recoup the regional sports network business that the predecessor company sold to Disney and that the latter was forced to divest. Finally, the balance sheet is in solid shape, with net Debt/EBITDA at under 2.5x.

My range of values is between $20 and $107, with a base case of $56. This is driven by a business that I believe has normalized EPS/FCF of $2.75-$3.00 in a few years that is growing in the midsingle digits. The company also has a number of excess assets that are worth close to $10/share. The largest of these is a sizable NOL which allows it to reduce its cash taxes for many years, as well as a stake in Roku and a valuable studio lot. I purchased the stock at ~ $35/share, or around 11x forward 12 months normalized EPS excluding excess assets. I sized the investment as a small, 5%, position because 1) the downside is > 35% and 2) this investment has meaningful correlation of long-term business outcomes with our Discovery investment. I do believe that the two companies are complementary, and both are positioned to avoid the competitive fiction content market. Longer-term it wouldn’t surprise me if Discovery and Fox merge as this would give them even more scale and make their combined offering even more must-have.”