Fox’s $2,000+ bonuses may seem generous — but maybe not so much
By Matt Collins Article may include affiliate links
The company CEO, Lachlan Murdoch, who is the son of News Corp. founder Rupert Murdoch, trumpeted the payments as a “thank you” for employees during a busy and challenging year, but also likely saw the value in the positive PR such a gesture might make.
However, giving a few thousand dollars to every employee isn’t exactly as impactful as you might think — and it also likely cost a pittance compared to what the company made in profit.
Assuming all of the estimated 9,000 people the company employs got the minimum of $2,000 (even though the company’s announcement indicated some will receive more), the bonus would have cost Fox Corp. about $18 million as a one time expenditure — at minimum.
It’s unknown how much each employee actually took home — and it’s also likely that some higher paid staffers received significantly higher bonuses, perhaps even in addition to ones they already would have received based on their contracts.
That (extreme low end) estimate of $18 million nothing to sneeze out — but pales at the estimated $12.3 billion in revenue the company booked in 2020 despite a challenging year due to the coronavirus pandemic, according to public financial records.
The company booked just shy of $1 billion in net income in 2020. Many of its units were affected by the downturn in advertising revenue, but it still raked in millions in fees from TV providers, the company reported.
Fox also ended up saving some money as expenses such as sports rights fees were reduced or eliminated due to the pandemic, according to public filings.
Put another way, Fox could have given each of its employees $50,000 bonuses and still potentially netted about half a billion dollars — though this calculation simplifies things a bit such as the complexities of corporate accounting, debt, shareholder considerations and other factors.
All of these bonuses would be subject to federal and state income tax, just like any other form of payroll payment, but lower level Fox employees aren’t likely to have access to accounting and legal pros that can make that liability disappear.
Higher paid execs and talent are much more likely to be able to take advantage of these techniques, meaning their likely already higher bonuses could effectively be taxed at a significantly lower rate — in addition to potentially getting more to begin with.
$2,000 is also typically just a fraction of what Fox’s right leaning cable channel gets for 30 seconds of ad time during some of its top rated shows. In other words, employees getting the minimum bonus amount go what was essentially the value of a few seconds of time during “Hannity.”