Total revenue for Rupert Murdoch’s media empire falls for fourth straight quarter so chief executive says it will save money across its masthead titles

This article is more than 4 years old

This article is more than 4 years old

News Corp is cutting costs at its Australian and British newspapers after a strong second quarter performance from its digital real estate business failed to offset lower advertising revenue from the news division.

Total revenue at Rupert Murdoch’s media giant fell for a fourth straight quarter and its chief executive, Robert Thomson, said on Friday the group aimed to save money across its masthead titles, which include the Australian, the Daily Telegraph and the Herald Sun.

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Revenue from news in the three months to 31 December fell 8.1% to US$1.4bn (A$1.95bn), compared with US$1.52bn in the corresponding period last year.

Total revenue declined 4.3% to US$2.16bn, although the company said that would have been a 2% increase had it not been for fluctuating exchange rates.

News declined as a proportion of revenue from 67.4% to 64.8%.

“For our Australian mastheads, it was clearly a difficult quarter in advertising and to that extent we’ve clearly embarked on a cost-cutting program,” Thomson told investors.

“Cost cutting has a short-term cost and a long-term benefit.”

The chief financial officer, Bedi Singh, said the savings would be seen in the third quarter, but neither he nor Thomson said whether jobs were at risk.

“We are particularly focused on cost reductions and sharing services around News Corp to streamline operations at the newspapers in Australia and the UK,” Thomson said.

Earnings before interest, tax, depreciation and amortisation at the newspaper division, which also includes the Times and the Sun in the UK and the New York Post in the US, slipped 27% to US$158m.

Total earnings fell 20.5% to US$280m compared with US$352m for the previous corresponding period.

Earnings from News Corp’s book publishing and cable network units dropped 26% and 28% respectively, but some of the declines were offset by a 28% increase in earnings from the digital property listings business to US$73m.



That includes REA, the company behind realestate.com.au, which increased its first half profit by 28% to A$121m in the six months to 31 December. Revenue in its Australian operations rose 22% because of improved property listing products, it said.

Foxtel is in line to show full year earnings growth, with News Corp promoting the amount of content available via its Australian pay-TV service compared with streaming services such as Netflix.

“Clearly there’s a lot of competition in the market at the moment when you look at Netflix and others, but what you need to understand is that Netflix in the US is very different to Netflix in Australia,” Thomson said.

“The Australian offering has quantitatively and qualitatively a far lesser offering. You might puckishly call it not Netflix, but Notflix.”

News Corp’s first half earnings have declined 18.5% compared with the first half of the previous financial year, dropping from US$546m to US$445m.