News Corp reported $539 million in pro-forma revenue for its pay-TV arm in the first three months of the financial year, down 13 per cent compared to the same period last year. Loading Losing the ABC payment would represent a modest annual cut. It comes at a time when the business is facing competitive pressure from streaming services such as Netflix. Ending the retransmission agreement with Foxtel was one of the recommendations in a 2014 efficiency review of the ABC and SBS. A portion of the $4 million payment to host the ABC's services on Foxtel is paid to third parties, such as satellite providers, sources close to News Corp said.

The ABC is facing cuts totalling about $84 million as part of an indexation pause introduced by the Turnbull government in the 2018 Federal budget. In a scenario where the inflation rate is 3 per cent, this would mean cuts to expected funding of $15 million in the first year, $28 million in the second and $41 million in the third. The Foxtel arrangement for satellite with the ABC is similar to payments made to the pay-TV platform by free-to-air broadcasters Nine Entertainment Co (owner of this masthead), Seven West Media and Network Ten. Mr Anderson has been discussing how to reduce the cost with Foxtel since the end of 2018 and is looking to get rid of the fee entirely. He is also looking at efficiencies by combining more back-end operations with SBS, he said at the meeting.

Seeking savings with 'minimal impact' The ABC hopes to slash the Foxtel payment in a bid to minimise savings that affect content creation or staff. However, such a decision would still impact how Australians access the public broadcaster's programming. As it stands, premium Foxtel subscribers are able to watch programs such as The World and The Drum from their set-top-box. But ABC News content is not available on cheaper packages such as Foxtel Now. An ABC spokesman said the broadcaster was considering "various savings measures to meet funding cuts with minimal impact to our content, services and staff, in accordance with our ongoing obligation to find efficiencies". "We are currently in discussions with Foxtel regarding the costs associated with the retransmission of ABC services," he said.

A Foxtel spokesman confirmed the discussions are ongoing. ABC message boards plastered with EBA-related posters. "We are making good progress but those discussions have some way to go and it's not appropriate to comment at this stage," the spokesman said. An SBS spokeswoman said that as its model was "hybrid-funded" with both taxpayer funding and advertising revenue, it had a different relationship with Foxtel. "We continue to work with Foxtel to retransmit our channels," she said.

Pay stoush The ABC is also under financial pressure as union representatives and management negotiate a new enterprise bargaining agreement. The union is pushing for a 2 per cent pay rise, however ABC management has offered 1.7 per cent. Some staff have asked senior management to consider forfeiting their bonuses as part of the negotiations. Posters put up in the ABC building over the past few weeks have described management's 1.7 per cent one-year offer as "offensively low" and slammed "$2 million in bonuses for senior executives".

The issue of executive pay was raised during the staff meetings, with Mr Anderson revealing he had received around $232,000 in bonuses as part of the management team. The majority of this was a "retention bonus" set by the ABC board for staying on while former managing director Michelle Guthrie transitioned into her role, while the remainder was related to the performance targets set out in Mr Anderson's contract. His new role as managing director does not have a bonus attached, Mr Anderson told staff. ABC management advised employees on Thursday that it wished to take a 1.7 per cent pay rise to a staff vote. The unions representing journalists and public sector workers rejected the figure.