Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
One conservative television empire is — unsurprisingly — thriving in the age of President Donald Trump. Can a second find similar success?
Hoping to replicate, if not challenge, Fox Corporation, Newsmax went public this week. The Trump-friendly cable TV network raised $75mn. On Tuesday, its shares surged from its listing price of $10 to $233, implying a market capitalisation of $30bn.
That day-one bump gave Newsmax an enterprise value roughly in line with that of Fox Corporation, which owns the long-standing conservative network Fox News. Yet Fox generated $14bn of revenue in its fiscal 2024. Newsmax, by contrast, had 2024 calendar year revenue of just $170mn.
Various Trump-affiliated projects — from the Truth Social app to cryptocurrencies — have experienced some element of meme phenomenon. Newsmax’s shares are no exception. But do not discount the network’s influence in right-wing circles and the resulting opportunity to build a meaningful business over time.
Newsmax is already beamed into 50mn households and has several highly rated shows that stack up well against Fox News. The difference between the two now-rivals: Newsmax has barely made a start on monetising its subscribers.
Pay-TV networks are businesses in secular decline. In a decade, total households subscribing to satellite and cable have drifted down from around 100mn in the US to under 60mn. But the sector still generates a lot of cash via advertising and subscriptions.
On the latter front, Newsmax notes that the likes of Fox News, CNN and MSNBC charge between $0.83 cent and $2.50 per month per subscriber, among the priciest networks available. Newsmax has not disclosed its exact rate but is estimated at only a dime or two.
As a result, at Fox, total affiliate fees — think customer subscriptions rerouted to the media company via the pay-TV distributor — across all its broadcast networks netted more than $7bn, while advertising generated just $5bn.
Affiliate fees in 2024 at Newsmax were just 16 per cent of revenue, with the company relying on ad bucks for the rest. Expect Newsmax to begin charging distributors a sum that is more in line with its own ratings and that of the peers it is already challenging in viewership figures.
Newsmax is building a streaming platform too, which has a subscription tier that charges $4.99 each month. But the company admits that most of its viewers are above age 45 and still glued to traditional television. Various Fox personalities have now migrated to Newsmax. For the first time, the legacy conservative brand has to fight for its core audience.
The sensational Newsmax valuation will no doubt recede in the coming weeks. In early trading on Wednesday its shares were down some 40 per cent. But what remains is one of the most interesting entrepreneurial bets of the Trump era. Newsmax is not a tech disrupter. Neither is it taking advantage of a booming sector. Its now billionaire founder Christopher Ruddy is simply wagering that even a dying industry can support a new entrant, if it produces content people want.
sujeet.indap@ft.com
