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Fox shares tumble 3.32% after Bank of America downgrade raises concerns about NFL media rights risks, with trading volume soaring to $280M and ranking 467th

Fox shares tumble 3.32% after Bank of America downgrade raises concerns about NFL media rights risks, with trading volume soaring to $280M and ranking 467th

101 finance101 finance2026/02/26 00:54
By:101 finance

Market Overview

On February 25, 2026, Fox Corporation (FOXA) experienced a notable drop, ending the day down 3.32% as investors responded to increased scrutiny. Trading activity was robust, with volume soaring to $280 million—an 85.7% jump compared to the previous session—ranking the stock 467th in daily turnover. Despite this heightened activity, the share price remained weak, trading beneath both its 50-day ($69.00) and 200-day ($64.58) moving averages. This latest decline extends a 27% slide since the start of January, bringing the stock close to its 12-month low of $46.42. Large institutional investors continue to hold a majority stake, with hedge funds and similar entities owning 52.52% of shares. However, recent insider transactions, including a significant 45.38% reduction by executive Adam Ciongoli, have raised concerns about confidence within the company.

Main Factors Behind the Decline

The primary trigger for Fox’s downturn was Bank of America’s decision to downgrade the stock from “Buy” to “Underperform.” In a note released on February 25, the bank sharply reduced its price target from $80 to $45—a 56.25% cut—citing growing worries about Fox’s vulnerability in the upcoming National Football League (NFL) media rights negotiations. Analyst Jessica Reif Ehrlich described Fox as the company most at risk in her coverage, given its heavy dependence on sports programming for both revenue and audience engagement. According to BofA, Fox could see its FY27E EBITDA fall by as much as 22% if the NFL increases its media rights fees under a “1.5x AAV step-up” scenario, which would likely squeeze profit margins and earnings potential.

This downgrade came amid a broader transformation in the media industry. Bank of America pointed out that traditional broadcasters like Fox are facing a deteriorating negotiating position as well-funded tech companies and digital-first competitors enter the race for premium live sports content. The influx of new bidders is expected to drive up the cost of acquiring rights, while making it harder to generate returns through advertising and subscriptions. Ehrlich cautioned that even in the most favorable outcome for the NFL renewal, the overall repricing of media rights would weaken earnings for media firms, with Fox being particularly exposed due to its focus on sports and news. Reflecting this uncertainty, BofA also lowered Fox’s valuation multiple from 10x to 6x, signaling a more cautious outlook for future growth.

Market volatility further intensified the impact of the downgrade. Fox’s stock had already lost 27% since January, and BofA noted that while some of this decline had been anticipated, additional downward pressure was likely until the NFL’s new agreement is finalized. The bank’s analysis suggested that Fox’s profitability could be squeezed if the NFL negotiates higher fees or less favorable terms, such as bundled packages that reduce advertising income. Although Fox’s latest earnings report surpassed expectations with $0.82 in earnings per share and $5.18 billion in revenue, these results did little to ease concerns about the company’s long-term risks. Other analysts, including those at Morgan Stanley and Arete Research, have also adjusted their ratings, resulting in seven “Buy,” nine “Hold,” and one “Sell” recommendation. However, Bank of America’s negative outlook stands out as the only “Sell” rating, heightening market skepticism.

Looking Ahead: NFL Negotiations and Investor Sentiment

The upcoming renegotiation of the NFL’s $110 billion broadcast and streaming contracts is a pivotal event for Fox. Bank of America emphasized that Fox’s competitive strength relies on maintaining its exclusive Sunday NFL broadcasts, which are central to its prime-time lineup and advertising revenue. Losing or weakening this partnership would significantly undermine Fox’s position on both traditional and digital platforms. While rivals like Disney and Comcast may be better equipped to handle similar risks due to their diversified operations, Fox’s reliance on sports makes it especially vulnerable. This risk is magnified by the rising value and viewership of major sports, which has strengthened the NFL’s bargaining power.

Recent moves by institutional and insider investors have reinforced the cautious outlook. While firms like Private Trust Co. NA and Brown Brothers Harriman & Co. increased their holdings in Fox during the fourth quarter, these purchases were offset by the large insider sale from Ciongoli. The mixed signals—from cautious buying to strategic selling—underscore the uncertainty surrounding Fox’s ability to navigate the upcoming NFL negotiations. Technical indicators, including an oversold condition and a low beta of 0.51, suggest limited potential for a short-term rebound, in line with Bank of America’s bearish perspective. Until there is greater clarity on the NFL’s next steps, Fox’s shares are likely to remain under pressure.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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