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19 Aug 2018 10:39
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  •   Home > News > International

    News Corporation chalks up $1.9bn loss as Foxtel's value written down by another billion

    News Corporation posts a $1.9 billion full year loss, following last year's $870 million loss as its Foxtel investment swamps the media giant's results in red ink.

    Global media giant News Corporation has suffered another nasty full year loss of $US1.4 billion ($1.9 billion) as it continues to write down the value of its Australian pay-TV subsidiary, Foxtel.

    The big full year loss follows last year's $US643 million ($870 million) loss where the value of a range of newspapers and TV platforms were slashed.

    Foxtel and Fox Sports saw their value cut by $US998 million ($1,354 million) as part of their consolidation into a single company, with News owning 65 per cent of the business and Telstra controlling the other 35 per cent.

    The transaction also incurred further costs to the bottom line of almost $800 million, which included tax.

    The previous year's result was also affected by a $1.4 billion write-down at Foxtel.

    "News Corp is now a more substantial company after the Foxtel transaction, with a much higher percentage of recurring, subscription-based revenues, which should help offset a volatile advertising environment," News chief executive Robert Thomson said.

    The better news was an overall rise in full year revenues across the company, up 11 per cent to $US9.02 billion ($12.2 billion).

    While the digital real estate and book publishing divisions were solid contributors, they were offset by lower print advertising sales and a 6 per cent revenue decline in News the America Marketing division.

    'Absolute focus' on Foxtel

    News Corporation Australia — which includes The Daily Telegraph in Sydney, Melbourne's Herald Sun and The Australian — reported a 1 per cent increase in revenues on the prior year.

    Foxtel's revenues were flat with the positive impact from foreign currency fluctuations offset by falling subscription numbers and lower advertising revenues.

    Pre-tax earnings at Foxtel fell by 22 per cent, or $208 million, primarily due to AFL and NRL rights driving up sports programming costs by $120 million.

    Mr Thomson told an analyst briefing the "absolute focus" of the company in Australia would be the integration of Foxtel and Fox Sports, rather looking to buy a new business.

    Mr Thomson's comments pour cold water on speculation that News would become active in further consolidation in the Australian media landscape in the wake of the proposed merger of Nine and Fairfax.

    "That combination [Foxtel and Fox Sports] we want to make more than a sum of the parts," Mr Thomson said.

    "There is no doubt Foxtel has the best portfolio of programs and sports right, and there is no doubt the Australian audience are prepared to pay far greater than previously presumed," he said.

    The bright spot in Australia was the company's 62 per cent stake in real estate portal, REA.

    REA's profit jumped 23 per cent to $252.8 million last year, despite the real estate market softening.

    © 2018 ABC Australian Broadcasting Corporation. All rights reserved

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