News Corp posts US$1.5bn loss driven by sharp declines in newspaper revenue

Revenue collapses by 16% in Australia and 13% in the UK, while Foxtel loses 12% of its subscribers in Australia

News Corp has posted a US$1.5bn loss, with its Australian and United Kingdom newspaper businesses suffering sharp declines in revenue and its Foxtel pay-TV business in Australia bleeding subscribers, new financial results for 2019-20 show.

The global media giant released its financial results for 2019/20 on Thursday in the US. The reports paint a grim picture across the last quarter and year, with the exception of its Dow Jones business.

News Corp Australia and News UK revenue declined 16% and 13% respectively across the year.

In the last quarter, as Covid-19 hit, revenue declined 31% at News Corp Australia and 22% at News UK.

The results come in a tumultuous week for News Corp, after James Murdoch resigned from the board on Saturday, citing “disagreements” over editorial content.

The company’s report to the US Securities and Exchange Commission made no mention of James but directly thanked Rupert and Lachlan, saying the successes of the company would not be possible without their leadership .

One of the few positives for News Corp was the performance of its Dow Jones business, which incorporates the Wall Street Journal and other financial wire services and publications

For the first time, the company reported separate figures for Dow Jones, a move the company said “better highlights its growth and value”. It managed to post a 13% profit, despite the crisis.

The picture was less rosy across the rest of its business.

Total revenues were down by 11% over the year, from $US10.07bn to $US9.01bn. Advertising revenues in July at the newspaper mastheads declined 25 to 30%.

Covid-19 has also hit advertising and single-copy sales revenues, the company said.

“The ultimate impact of the Covid-19 pandemic, including the extent of adverse impacts on the company’s business, results of operations and financial condition, is highly uncertain and cannot be predicted,” News Corp said.

The company said it was cost-cutting and reducing shared functions to try and offset the declines. Chief executive Robert Thomson said those measures were expected to “appreciably cut costs and expect it to have a materially positive impact on our bottom line”.

Thomson pointed to the company’s decision to shutter, merge, or shift to online only at 112 local and regional papers across Australia as evidence of its willingness to be “decisive”.

“The closure in Australia of many of our storied print editions and the renewed emphasis on digital was evidence of our willingness to be decisive at a historic inflection point,” he said. “One result of our candid approach on costs was that, despite the Covid-19 impact, our cash position strengthened to $1.5 billion from $1.3 billion as of December 31st.”

The company said its digital offering “continued to see strong growth”, both in Australia and at the Times and Sunday Times.

Foxtel continued to experience declines in subscribers.

Foxtel had about 2.77m paid subscribers as of June 30. That is 12% lower than the year prior. The company blamed the loss on lower residential and commercial broadcast subscribers and less customers for its Foxtel Now streaming business.

Growth at Kayo, the company’s sports streaming service, and Binge, its newer streaming offering, have partially offset the losses, the company said.

Kayo subscribers were up to 465,000 from 382,000 the year prior.

Binge had 217,000 subscribers as of 4 August. It only launched in May.


Christopher Knaus

The GuardianTramp

Related Content

Article image
News Corp posts $817m loss after falls in value of newspaper and pay TV assets
Revenue of $8.14bn is down 2% from $8.29bn last year due to lower print advertising revenue and foreign currency fluctuations

Amanda Meade

11, Aug, 2017 @5:08 AM

Article image
News Corp to suspend print editions of 60 local newspapers as advertising revenue slumps
Manly Daily, Wentworth Courier, Brisbane News and Mornington Peninsula Leader among titles to move online amid coronavirus fallout

Amanda Meade

01, Apr, 2020 @2:47 AM

Article image
Up to 70 News Corp Australia photographers made redundant
Company expected to target production staff, including subeditors and designers, next as newspaper cost-cutting continues

Amanda Meade

15, May, 2017 @3:59 AM

Article image
News Corp Australia posts $60.7m loss as pandemic takes toll on media
Company blames $167m hit to advertising revenues on regional and community closures and digital transitions

Tory Shepherd

08, Nov, 2021 @6:27 AM

Article image
Rupert Murdoch says 'there are no climate change deniers around' News Corp
Murdoch was responding to a question at AGM about time given to ‘climate deniers’ by News Corp outlets in Australia

Graham Readfearn

21, Nov, 2019 @1:47 AM

Article image
Follow the money: how News Corp wields power to defend its interests
In the third part of our series, we examine how Rupert Murdoch’s primary interest in politicians is not always political but often commercial

Anne Davies

21, Sep, 2018 @10:01 PM

Article image
News Corp Australia warns of coronavirus crisis job cuts as smaller regional papers close
Staff at Murdoch newspapers told job cuts inevitable as advertising downturn forces closure of independent rural titles

Amanda Meade

25, Mar, 2020 @6:09 AM

Article image
News Corp taxes David Speers with pro-business roadshow | The Weekly Beast
Business Council locks in News Corp’s support. Plus: Fairfax publishes an epic correction

Amanda Meade

04, May, 2018 @1:22 AM

Article image
News Corp launches offensive against Labor's climate policy amid glowing budget 2019 previews
Murdoch papers label Shorten’s energy plans a ‘lunchbox tax’ and paint Coalition as saviours of Australian ‘workers’

Amanda Meade

02, Apr, 2019 @4:17 AM

Article image
'Gutting': News Corp Australia's newspaper print closures will leave 'thousands of stories' untold
Readers and former staff decry a terrible day for journalism and express grief at job cuts

Naaman Zhou

28, May, 2020 @3:36 AM