Foxtel, Australian newspapers financial millstones in News Corp accounts

Books: good. Digital real estate: better. Wall Street: yummy.

But the rest of News Corp’s assets (Australian and UK newspapers and the floundering Foxtel) were financial millstones in the September quarter as the Murdoch family’s media group reported a much stronger start to the new 2020-21 financial year than it started 2019-20.

Foxtel and the Australian newspapers’ revenues fell. The Australian papers saw a 20% slump in revenues for the quarter, according to the News Corp report.

Revenues fell 10% to US$2.12 billion, primarily driven by the sale of News America Marketing, a revenue drop of 2% from the restructuring of the Australian suburban and regional newspapers and lower revenues at 65%-owned Foxtel.

Total segment earnings before interest, tax depreciation and amortisation (EBITDA — a Murdoch company measure of earnings from operations) was US$268 million.

The company benefitted from better contributions from its US real estate businesses, favourable currency gains, growth in digital real estate services, Dow Jones subscription growth and book publishing growth.

Foxtel saw a 4% dip in revenue and 4% dip in segment EBITDA despite a rise in subscriber numbers thanks to the resumption of live sport in Australia.

It lifted total subscriber numbers to more than 3.2 million, but that included more than 1.2 million from Kayo sports streaming, Foxtel Now and Binge.

Now the NRL and AFL seasons have ended, Kayo numbers will fall.

Residential subscriber numbers fell to 1.8 million and commercial subscriber numbers rose to just over 200,000 as more pubs and clubs opened up.

News media — dominated by the Australian newspapers and including the UK papers — revenues fell US$280 million, or 37% compared to the previous year.

In this morning’s briefing call, not a question or comment on the US election results and how they may impact News from the analysts or the News Corp executives, CEO Robert Thomson and CFO Susan Panuccio.