Company: FOX
Filing Date: 2025-08-06
Form Type: 10-K
Source: 0001628280-25-038077
Chunk: 107

Company: Fox Corp
Filing Date: 2025-08-06
Form: 10-K
Item: Item 7
Chunk 107
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 to disposed businesses using the relative fair value method.

Carrying values of goodwill and intangible assets with indefinite lives are reviewed at least annually for possible impairment. The Company’s impairment review is based on a discounted cash flow analysis and market-based valuation approach that requires significant management judgment. The Company uses its judgment in assessing whether assets may have become impaired between annual valuations. Indicators such as unexpected adverse economic factors, unanticipated technological changes or competitive activities, loss of key personnel and acts by governments and courts, may signal that an asset has become impaired and require the Company to perform an interim impairment test.

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The direct valuation method used for FCC licenses requires, among other inputs, the use of published industry data that is based on subjective judgments about future advertising revenues in the markets where the Company owns television stations. This method also involves the use of management’s judgment in estimating appropriate terminal growth rates, operating margins and discount rates reflecting the risk of a market participant in the broadcast industry. The resulting fair values for FCC licenses are sensitive to these long-term assumptions and any adverse changes to such assumptions could result in an impairment to existing carrying values in future periods and such impairment could be material.

During fiscal 2025, the Company recorded a non-cash impairment charge for intangible assets of approximately $70 million primarily related to FCC licenses in Restructuring, impairment and other corporate matters in the accompanying Consolidated Statements of Operations within the Television segment. Based on the Company’s annual assessment, the carrying value of FCC licenses in certain markets exceeded their fair value primarily as a result of updated market data, including lower expected future advertising revenue. Additionally, the fair value of FCC licenses in certain markets exceeded their respective carrying value by less than 10% as of June 30, 2025. An increase to the discount rate of 0.5 percentage points, or a decrease to the terminal growth rate of 0.5 percentage points, assuming no changes to other long-term assumptions, would cause the aggregate fair value of FCC licenses to fall below the aggregate carrying value by approximately $80 million and $50 million, respectively. Further adverse changes in market conditions may result in additional non-cash impairment charges.

During fiscal 2025, the Company determined that the goodwill included in the accompanying Consolidated Balance Sheets as of June 30, 2025 was not impaired based on the Company’s annual assessment and there are no reporting units at risk of impairment. While the Company believes its judgments represent reasonably possible outcomes based on available facts and circumstances, adverse changes to the assumptions