Fuji Television Network Faces Major Financial Losses Amid Advertising Pullout Over Nakai Scandal

Fuji Television Network Inc., along with its regional affiliates, is bracing for an anticipated financial hit, expected to be between 1.3 billion to 1.4 billion yen (around $8.35 million to $8.99 million) by March 2025. This situation has arisen due to the fallout from a scandal related to former TV host Masahiro Nakai and allegations of misconduct involving a woman. The network is in turmoil as it seeks a resolution, but signs indicate that further financial deterioration might occur in the coming months.

After holding its initial press conference on January 17, the network experienced a sharp decline in advertising support, with over 70 companies choosing to replace their advertisements with public service messages from the Advertising Council Japan (AC Japan). Many sponsors have terminated their contracts, particularly for the month of February and beyond. In response to this crisis, Fuji TV has decided against charging advertising fees for all replacement and canceled ads. A third-party committee tasked with probing the scandal is expected to deliver its findings by late March, but the network remains without viable strategies to attract back its sponsors.

This controversy has also led Fuji Media Holdings Inc., the parent company of Fuji TV, to adjust its financial projections downward for the fiscal year ending March 31. According to a report from January 30, the company now anticipates a net profit of 9.8 billion yen (approximately $62.92 million), a drastic decrease from a prior estimate of 29 billion yen (around $186 million). This represents a staggering 74% decline compared to the previous fiscal year's net profit of 37 billion yen (approximately $237 million). Fuji Media Holdings is forecasting a shortfall of about 23.3 billion yen (around $149 million) in advertising revenue for Fuji TV, suggesting the network is on track for significant losses.

The repercussions of this scandal are also impacting the 28 regional affiliates of Fuji TV, which are heavily reliant on ad revenue. Many sponsors have shifted their advertising strategies, either choosing to replace ads across the board for programs produced by Fuji TV or canceling contracts with individual local broadcasters. Estimates suggest that these regional affiliates could collectively lose between 1.3 billion to 1.4 billion yen, with an additional projected deficit of 200 million to 300 million yen (approximately $1.29 million to $1.93 million) on the horizon.

Insiders reveal that regional broadcasters rely on advertising for approximately 90% of their revenue, rendering smaller stations particularly susceptible to adverse financial impacts. The 28 affiliated Fuji TV stations typically air content produced by the main network, circulating this programming within their specific service areas and further tying their financial success to the overall health of Fuji Television Network.