Sky bidder Fox falters as film hits and adverts dry up

Profits at 21st Century Fox have fallen as a lack of a big box-office hits and flat cable advertising hurt Rupert Murdoch’s film and TV empire.

Fox revenues rose almost 5% in the first quarter to $7.56 billion (£5.84 billion), helped by demand for advertising during the Superbowl.

But profits dropped 5% to $799 million due to the lack of another hit like Deadpool, which was a surprise success for its film studio in the first quarter last year.

Fox is awaiting Ofcom’s green light to take control of the 51% of Sky it does not own and said it was confident the £14 billion deal will close this year.

Ofcom has been hearing representations by female TV presenters who worked at Fox News about a string of sexual harassment cases brought against the news organisation in the US.

The witnesses are giving testimony as Ofcom considers whether 21st Century Fox is a fit and proper owner of the British broadcaster and broadband company.

Fox has spent about $45 million dealing with the case in the nine months to March but doesn’t expect that number to rise.

Many advertisers deserted the Fox News channel as allegations of sexual harassment and mismanagement flew, leading to the departure of former chairman Roger Ailes and its highest-rated presenter, Bill O’Reilly.

However, executive chairman Lachlan Murdoch said the channel had had record ratings in the first three months.