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 3% 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.