Earnings tumble for News Corp’s news media division
News Corp saw earnings tumble by 28% in its news media division, as it battled lower revenues, inflationary pressures on newsprint costs, and a number of digital investments – including TalkTV.
Revenues dropped by US$157 million (A$241m) for fiscal year 2023, down 6%. Within the segment, revenues at News Corp Australia dropped by 8%, slightly worst than News Corp UK’s 7% drop.
Circulation and subscription revenues decreased $68 million (A$104.3m), or 6%, compared to the prior year.
Advertising revenues decreased US$98 million (A$150.5m), or 10% “driven by a 7%, negative impact from foreign currency fluctuations, lower print advertising at News UK, the absence of the additional week in the prior year and lower digital and print advertising at News Corp Australia, partially offset by growth in digital advertising at News UK.”
Earnings before taxes dropped by 28% (US$61 million, A$93.7m) for the news media segment – which the company credits to “lower revenues, the impact of inflationary pressures on costs, primarily in newsprint, and higher costs related to TalkTV and other digital investments, primarily at News Corp Australia.”
The decline was partially offset by “cost savings initiatives across the businesses, particularly News Corp Australia and News UK.”
News Corp’s overall FY23 results are summarised below.
“For the first time, digital accounted for over 50% of News Corp’s revenues for the full year, marking a profound transformation during the past decade,” said News Corp chief Robert Thomson.
“That momentum is surely gathering pace in the age of generative AI, which we believe presents a remarkable opportunity to create a new stream of revenues, while allowing us to reduce costs across the business. We are already in active negotiations to establish a value for our unique content sets and IP that will play a crucial role in the future of AI.”
While this 50% tipping point is a “profound” one, as Thomson notes, the print publications on which the empire was built are slower to erode.
Digital revenues only represented 36% of the News Media segment revenues in the most recent quarter, climbing just 1% in the last twelve months. Digital represented just 34% of the combined revenues of the newspaper mastheads.
Closing digital subscribers across all News Corp Australia’s publications (as of June 30) sat at 1,059,000 — with 943,000 for news mastheads — compared to 964,000 (882,000 for news mastheads) in the prior year.
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Nathan Jolly is the Deputy Editor of Mumbrella. He joined the team in July, 2023.
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