News Corp recovers from horror year with $445m profit

Rupert Murdoch’s News Corp says confidential content deals with Google and Facebook will significantly boost revenue

Rupert Murdoch’s News Corp has swung back into profit this year after a horror loss last year driven by the plunging value of its troubled Foxtel pay TV business and falling newspaper revenue.

The company declared a profit of US$330m (A$445m) for the year to the end of June, compared to a loss of US$1.26bn last year.

Chief executive Robert Thomson said content deals struck with Google and Facebook would significantly boost News’ revenue.

“These deals, which are confidential, will add revenue annually into nine figures and are a profoundly positive sign of the ongoing transformation of the news landscape,” he said.

News said revenue was up 4% for the year, fuelled by a 31% increase in revenue from real estate ads – it owns US property sites including realtor.com and a majority stake in REA Group, the operator of Australia’s realestate.com.au – and a 10% increase from higher subscriptions to streaming services including sports offering Kayo.

The streaming service had struggled last year as sports were cancelled around the world due to the pandemic.

However, revenue from the company’s news media division, which includes Australian newspapers such as Sydney’s Daily Telegraph and Melbourne’s Herald Sun, plunged by 21%, from about US$2.8bn to about US$2.2bn.

Much of this was due to the sale of News Corp’s US catalogue insert business, but Australian newspaper ad revenue fell by $90m because News closed a string of regional and suburban papers and due to “continued weakness in the print advertising market, exacerbated by Covid-19,” the company said.

It said subscription revenue across the newspaper group, which also includes the New York Post, was up 11%, or US$104m as readers shifted online and away from buying papers at newsagents.

News said it had 810,000 subscribers to its Australian mastheads, up from 647,600 the previous year.

Thomson said it was “the most profitable year since we created the new News Corp in 2013”.

He talked up growth in streaming services at Foxtel, saying “paid streaming subscribers reached over 2 million, an increase year-on-year of 155%,” but did not provide figures for subscriptions to its traditional pay TV service, which is in long-term decline.

The company said pay TV subscriptions were “lower” than last year but did not provide any details.

Thomson said the “sterling performance” of the streaming services “has clearly given us much optionality as we consider Foxtel’s future, which is certainly bright, given that revenues rose 33% in the fourth quarter”.

Contributor

Ben Butler

The GuardianTramp

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